Cadence of model build
Cadence of model build: A lender that can build scorecards faster can better respond to changing market dynamics. The ability to better address changing risks and capitalise on pockets of opportunity will inevitably lead to the ability to outperform their peers.
#automation #competitive advantage
Innovative sources of data
In the continuous search for improvements in model performance, lenders are investigating both new sources of data as well as effective feature engineering on existing data.
#feature_engineering #data
Model validation
The cadence of independent model validation is vital both in response to regulator pressure as well as to gain comfort that decision-making is sound. Often the second line validation function is under resourced and lacks specialist capacity for scorecard review. This is where partnering with an external firm of specialists can add tremendous value.
#fit_for_purpose #second_line_of_defence #no_delays #model_risk
Scorecard monitoring
Active monitoring of scorecard performance ensures that any deterioration in performance is quickly flagged for interrogation and, when necessary, remediation like recalibration or rebuilding.
#early_warning #measurement #red_flag
Micro-segmentation
As the pace of scorecard development increases leading lenders are investigating the development of segment-specific scorecards to increase lift.
#segmentation #lift #competitive advantage