Client: Leading auto fnance

company
Industry: Financial Services
Business Impact:
Risk-based decision and
pricing strategy
Automatc customer scoring
Performance monitoring
www.blueoceanmi.com
Leveraging risk analytics for improving loan origination
process and managing customers
Business Challenge
Based in the US, the client is a niche auto fnance company providing auto loans
to consumers for pre-owned automobiles. It ofered services across diferent
states in the US. It worked through an extensive network of automobile dealers
to provide its lending products to the consumers. The company approved all
loan applicatons at the originaton stage, however, the decision around risk was
controlled through the variaton in approved loan amount, interest rate and loan
tenure. Also, all the approved loan applicaton did not translate into customers
for the client as the consumer might have other preferred choices available. The
client wanted to build an analytcs-driven soluton across the entre customer
lifecycle for managing risks, proftability and growth.
Soluton
On a broad level, Blueocean Market Intelligence aimed at:
Designing a scientfc approach to credit approval process
Developing dynamic and innovatve scorecards/strategies to drive smart
growth while managing losses
Enabling recalibraton and regular refresh of customer segments, risk ters
and models
Performing constant and accurate monitoring of portolios on key
performance metrics
Case
Study
A step-by-step approach for building a holistc set of
solutons, covering every aspect of the customer lifecycle,
was followed. To make the most of the growth in demand
for loans, business lenders needed this critcal process to run
at the maximum speed and efciency while helping them
determine the right credit terms, manage risk, comply with
a growing body of regulatons, and provide diferentated
customer service. The major steps were:
Data management - Profled, modeled, extracted
and automated data into one repository
Loan originaton process - The following initatves
were taken:
o Risk Score/Risk Segmentaton Statstcal
evaluaton of the borrowers characteristcs
o Risk-based pricing model Based on the
riskiness of the customer
o Real-tme decision making applicaton
Lending portal for monitoring performance,
decision support and automated scoring of
customers
Performance management soluton - Key KPIs and
metrics were tracked to understand how the overall
portolio is doing
Outcome
The overall efciency of the loan management system
improved and a beter management of the entre process
was ensured. The key results were:
Data integraton for originaton and performance
data
Formulaton of risk-based decision and pricing
strategies based on customer risk and propensity to
not to take up the product
Blueocean Market Intelligences lending portal
helped in monitoring performance, decision support
and automated scoring of customers
Improved efciency, compliance and customer
service by boostng lenders visibility into key aspects
of the portolio
2014 Copyright Blueocean Market Intelligence. All Rights Reserved.
About Blueocean Market Intelligence
Blueocean Market Intelligence is a global analytcs
and insights provider that helps corporatons realize
a 360-degree view of their customers through data
integraton and a mult-disciplinary approach that
enables sound, data-driven business decisions.
Since we live in a highly dynamic and mult-
dimensional world, we believe the most efectve
business decisions come from a synthesis of data
streams and not from one-dimensional sources.
Using our 360 Discovery approach, we ensure the
comprehensive use of all available structured and
unstructured data sources, enabling us to bring
the best to bear against each engagement. Strong
decision support is enabled through a combinaton
of analytcs, domain expertse, engineering and
visualizaton skills brought together in harmony.
Leading companies have benefted from our
partnership with fnancial growth, 360 views of their
markets and competton, and improved customer
acquisiton, satsfacton and retenton.
For more informaton or to request a consultaton,
please email info@blueoceanmi.com or visit us
online at www.blueoceanmi.com.
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