e-Newsletter

A BRIEF COMPARISON OF SCORECARD PREDICTIVE METRICS

Scoring Solutions recently completed a white paper that compares four different scorecard predictive metrics used within the credit scoring industry. These metrics are used to measure how well a scorecard differentiates between two performance categories, i.e. bad and good payers. The white paper contains a table that allows you to look up the value of one metric and obtain an estimate of the value that you should expect for each of the other three metrics. These values were obtained using extensive simulation techniques and enable organizations that are widening their use of predictive metrics to understand the relationship between the four metrics most widely used in the financial services industry. Please contact Scoring Solutions at score.info@scoringsolutions.com or 678-672-5450, ext. 362 if you would like a copy of the white paper.

FEDERAL RESERVE AND OCC INCREASE REQUIREMENTS FOR BANKING ORGANIZATIONS

The Federal Reserve and the OCC issued on April 4, 2011, the Supervisory Guidance on Model Risk Management which is intended for use by banking organizations and supervisors as they assess their organizations' management of model risk. Previous publications issued by the Federal Reserve and OCC focused on model validation. The most recent Guidance on Model Risk Management has expanded the scope to include other important aspects of model risk management including "a sound model development process including: a clear statement of purpose to ensure that the model is developed in line with its intended use; sound design, theory, and logic underlying the model, robust model methodologies and processing components; rigorous assessment of data quality and relevance; and appropriate documentation." Scoring Solutions is now working with banking organizations to ensure their compliance with the management of model risk.

OUR CLIENT LIST CONTINUES TO GROW

Scoring Solutions is very pleased to be assisting several lenders improve their risk management practices with more predictive and effective tools and strategies.

Scoring Solutions will provide nonprime custom models and consulting services for an internet retailer. The supporting services include evaluating alternative data sources and designing decision rules for the purpose of targeting prospects with pre-approved credit offers.

A major captive finance company has selected Scoring Solutions to develop a custom credit scoring system for their consumer and commercial portfolios. Scoring Solutions will analyze consumer credit report, commercial credit report, and financial structure data. Scoring Solutions will utilize their proprietary consumer credit bureau attributes to create highly predictive scorecards.

Another captive finance lender has increased dollars collected by over 10% by deploying improved risk-based collection scorecards and strategies via Score360, Scoring Solutions' scoring and attribute engine.

In the commercial sector, Scoring Solutions is working with an equipment lender to incorporate more predictive attributes in their behavioral scoring models used to prioritize collection activities for their delinquent leases.

We look forward to working with these and other organizations over the coming year and sharing our successes with you.

Visit www.scoringsolutions.com for white papers published by Scoring Solutions.

To learn more about how we can bring value to your organization, call us at 770-988-9264 ext. 382 or e-mail us at score.info@scoringsolutions.com.