Case Study: Banking - Credit Risk and Scoring

Large Financial Institution in the US

The Business Challenge/Situation

Fierce competition within the Banking and Financial Services Industry and huge revenue losses incurred due to the mortgage crisis and increasing defaults led our client, a Bank in the US, to explore the possibility of engaging an offshore knowledge team to build predictive models to improve credit collections and maximize returns.

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Market Equations Role

Market Equations performed the ETL, Strength and feature analysis and built scorecards to meet the objectives and address client business challenge. A scorecard was built using historical data on delinquent accounts. A higher score implied a higher propensity of repayment that implied targeting these accounts for settlement as a priority.

Client Impact:

The Analyses resulted in identifying providing a sustainable and predictive model and help the client take preventive action by identifying individual members who have high probabilities of default. Market Equation met the following objectives.

1. Maximize Recovery-Revenue


2. Minimize Collection Costs


3. Optimize Collection Efforts


4. Identify possible NPA Accounts


5. Identify 'Good'/No Action/Auto-Resolution Accounts


6. Overall Collection Strategies for various Accounts

Large Bank in the US

The Business Challenge/Situation

The client, a large bank in the UK required Analyses of their different businesses in different locations based on profit centers to serve as a purpose of DSS for decision makers. The client required an outsourced knowledge team to work on their loan data marts such as personal loan, education loan, vehicle loan, housing loan etc and run different levels of Analysis on Loan Amount, type of loans, payment schedules, interest rates, defaulter list, penal interest calculations etc.

Market Equations Role

Market Equation worked with the loan data mart and performed the following:

• Created List and Cross Tab Reports


• Implemented Drill-up and Drill-down Paths


• Created new reports as per client Requirement


• Unit Testing of Reports

Our Analyses resulted in:

The client was able to identify profit centers based on hard facts and take strategic decisions.

ME maintain a fantastic relationship with the company and representatives are always eager to provide their references whenever required.

Explore how the Market Equations Consultative Approach to decision making works wonders.