It helps identify key areas for optimization and serves as a starting point for defining specific improvement levers.Ĭ-Insights. The credit diagnostic benchmarks the quality of end-to-end credit processes (including risk selection and customer excellence) as well as their operational efficiency, against that of peers. These surveys allow clients to benchmark their performance against a group of relevant peers. Our clients can participate anonymously in a wide range of surveys covering all major aspects of credit risk, including organizational effectiveness, credit processes, risk model performance, and portfolio management. We have also developed asset-specific models to assess the value of specific portfolios under different scenarios. We have more than 40 analytical experts in Europe and Asia dedicated to helping clients develop specialized models that can be applied either to individual loans, portfolios of assets, or a bank as a whole.Īmong other projects, we have helped retail banks create behavioral models to drive credit underwriting and monitoring. “ring-fencing,” evaluating, and preparing the sale of large nonperforming loan (NPL) portfoliosīanks increasingly require deep analytical insights to understand the value and risks associated with their credit portfolio, as well as to respond to market fluctuations and regulatory requests (for example, stress testing and capital management).introducing behavioral segmentation and developing differentiated recovery strategies to maximize recoveries on retail and commercial loans.Our projects typically reduce the cost of risk by 10 to 20 percent. When necessary, we also create targeted approaches for asset disposal. We help clients design and implement effective strategies for every stage of the collection process, from early delinquency to work-out. developing best-practice capabilities for SME underwriting by improving processes and creating advanced statistical modelsįinancial institutions must proactively manage potential credit losses to sustain value, especially during volatile economic periods.helping a commercial bank with an end-to-end redesign of credit processes for the retail, small and medium enterprise (SME), and corporate segments.

Examples of our process-optimization work include: Our approach combines a deep understanding of business and credit-related issues with proven lean techniques. We have extensive expertise in optimizing credit processes (origination, underwriting, pricing, administration, monitoring, and management) across all customer segments. Well-designed credit processes can reduce operating expenses by 15 to 20 percent and risk costs by more than 20 percent, while improving customer experience.

optimizing the design of a bank’s credit-portfolio-management unit.

transforming portfolio-level credit guidelines into actionable loan policy.

devising decision criteria to yield profitable growth in a client’s consumer-lending business.helping a client define its risk appetite for large-corporate credit underwriting.We help clients increase revenue and minimize costs by supporting the development of sound credit-risk strategies, organizational structures, and portfolio-management processes.

We help clients maximize returns from their credit operations by applying our expertise in: Credit strategy, organization, and portfolio managementĪt an average commercial bank, credit-related assets produce about 40 percent of total revenues credit-related costs, including provisions and write-offs, account for a significant fraction of expenses. Managing credit risk is always a complex challenge-one that becomes even more complex against a backdrop of market volatility and evolving regulatory guidelines.

Bank loan risk engine