Following the 2008 recession, economic modelling has increased in prominence in credit risk management, as regulators expect financial institutions to be able to predict the impact of an economic downturn on portfolio losses, to ensure they could withstand another recession. In this blog, we compare the pros and cons of traditional modelling methods with non-linear…

In this age of diminishing brand loyalty, the survival of consumer credit providers hinges on two things: their ability to differentiate and to exceed their customer expectations. Data holds the key to both. Creditworthiness assessments are, of course, the starting point for lenders’ use of data. But thanks to the increasing variety of data and…

Annually, thousands of businesses fall victim to fraudulent customers. Footlocker, for example, recently got swindled for 1.8 million Euros by a fake company called Ups Consultancy. This case also involved ING being fined on grounds of negligence in its due diligence of fraud and was widely reported on in the media. So, fraud not only…

The FCA Consultation Paper announcement marks the move from traditional motor finance commission models – which incentivise the dealer/broker to raise customer interest rates in order to get higher commissions – to an approach that provides more positive outcomes to car buyers. As we saw in the report from earlier this year, the FCA want…

Hardly a day passes without there being a new report on shrinking manufacturing output, increasing costs to business and fears of an emerging global recession. UK manufacturing activity is at its lowest level since July 2012; sales to the EU have dipped as European purchasing managers look closer to home in Brexit uncertainty; and US…

The benefits of adopting new technologies, such as artificial intelligence (AI), are not always immediately apparent for businesses in all industries and sectors. But for the risk sector, it is now obvious that there are enormous gains to be made. Its application can serve a wide range of functions – including fraud detection, risk management,…

Let’s talk about representative APRs. Those enticing little percentages that influence a consumer’s decision to apply for one loan product over another. Far too often excitement turns to disappointment when they get down to the fine print and discover that the headline percentage was too good to be true, usually after going through the extensive…

While an increasing focus has been given over to the FCA’s review of motor finance, only limited reference has been given to the escalating regulatory scrutiny of almost all regulated firms by the introduction of the Senior Managers & Certification Regime (SM&CR). SM&CR, which is due to be implemented in the consumer credit sector on…

As far back as 2013, we said in a press release titled ‘Government is letting small to medium size businesses down’ that the Prompt Payment Code needs a complete overhaul as it clearly isn’t fit for purpose. We also said that it needs to be given real powers to be able to act effectively on…

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