Credit Risk2020-07-31T13:51:45-07:00

Credit risk

Credit risk: predict risk and prevent credit delinquency with AI

Credit delinquency and debt levels are trending up—posing an increasing risk for lenders. These trends set off alarms, but credit delinquency can be predicted and prevented. What if you could predict credit risks before a default or even the first missed payment?

You can protect yourself and your customers. By using artificial intelligence (AI), data can be automatically updated in real time, giving lenders the earliest possible opportunity to intervene.

Assess today’s credit risk and prevent tomorrow’s delinquency: a concise guide

Download the Ebook to learn how to:

  • Identify the loans and credit at highest risk of default
  • Prevent the high costs and low chances of collection
  • Increase profits through customer retention

Use case: credit risk

Challenge

U.S. consumer debt hit $14.3 trillion in Q1 2020, according to the New York Federal Reserve, topping the pre-recession high of $12.7 trillion in Q3 2008.

Credit card debt also hit a record high, increasing in the last quarter of 2019 by $46 billion to $930 billion. Unfortunately, that was accompanied by increased delinquency of 5.3 percent. Notably, U.S. household debt has risen consistently for the past five years.

The Federal Reserve cited that 5.25 percent of Americans were at least 90 days behind on their credit payments at the end of Q1 2020 (averaged over all debt categories).

Creditors suffer huge losses, either selling debt to collection agencies (often at great losses) or investing in their own collections staff. Either way, they need to identify potential credit delinquencies before they occur.

Solution

By leveraging the ability to evaluate data from multiple sources, lenders can gain greater insight and real-time profiling to determine whether an account will go delinquent in the near future or not. Brighterion AI creates a proactive, two-step approach:

Step 1: Predict when a customer becomes a delinquency risk, based on multiple data points; such as:

  • Transaction and payment history
  • Current activity
  • Account events

Step 2: Optimize an early treatment strategy:

  • Reduce credit lines
  • Offer alternative payment and re-payment methods/plans
  • Send reminders to customers to help them stay on track
76%
Using Brighterion AI, one global bank reduced default losses by 76%.
Results

Brighterion AI monitors each account to provide highly predictive, real-time analysis that learns each customer’s behavior on a transaction-by-transaction basis. The outcome is superior credit risk assessment, dramatic delinquency reduction, and less pressure for new customer acquisitions.

With just 6-8 weeks from data extraction to results, Brighterion AI delivers almost instant value. One global bank reduced its default-related losses up to 76% by using Brighterion AI.

Key benefits


Reduce default losses,
even as debt levels rise


Make informed decisions


Help customers pay on
time and build trust


Have peace of mind with a stable
and experienced AI partner

“Credit risk is gaining prominence across the globe, given the current economic climate. Any marginal improvement in terms of modeling or accuracy can result in significant gains because there’s a reduction in credit losses.”

Amyn Dhala

Vice President Global Product Management, AI Express, Mastercard

Request a demo to learn how you can go from data to intelligence in 6-8 weeks

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