Major Regional Bank | Case Study | Delinquency Risks | Straterix
17681
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Major Regional Bank

Controlling increasing delinquency risk

The problem

The bank was concerned about increased delinquencies in retail lending. They needed to: 

  • Quantify the worst case scenarios,  for business as usual, pandemic or other stress environments
  • Define management actions to control  delinquencies levels

THE SOLUTION

Straterix’s analytical solution was applied in less than 2  weeks:

  • Loaded bank-specific data, as well as data from the public domain
  • Analyzed delinquencies’ patterns scenarios
  • Trained the client on interpretation of lending segments behaviors

The business case

  • Reduce  delinquencies by implementing improved lending practices 
  • Optimize consumer segment mix

The results

  • Improved lending practices and reduced exposure to risky segments. The  bank’s overall exposure was reduced by 24% in adverse scenarios
  • Unemployment and credit spreads-dependent triggers were identified, which would trigger management actions (‘early warning signals’)