Controlling increasing delinquency risk
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
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
- Reduce delinquencies by implementing improved lending practices
- Optimize consumer segment mix
- 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’)