Credit Risk Management
"Those banks that will firstly survive
the global economic crisis and secondly come out of it in the healthiest
position will need to look at innovative ways to provide both financial
services to their customers as well as manage risk across the spectrum
from individuals, through small businesses to larger corporations."
- Gartner, July 2009.
An upshot of the global economic crisis has been an increasing
need on the part of the banks to develop innovative ways to manage
risk in order to firstly survive and then to maintain or improve
their competitive position as they recover. The implementation of
InSights by a bank is one such innovation in that it enables the
bank to better manage its lending risk to business and personal
customers.
Luminous InSights includes a bank reporting module which enables
banks to instantly generate informative, customisable financial
management or early warning reports for credit departments and relationship
managers.
These sophisticated reports go beyond the traditional behavioural
reports and instead provide further insight into customer's financial
performance, including measurements against loan covenant and generation
of key financial ratios. These reports can be scheduled or delivered
on demand, thus greatly improving efficiencies for the bank. The
information obtained from these reports can assist banks in the
following areas.
Making loans
-
Make lending decisions based on up to date, relevant information
regarding a customer's true financial position
-
Improve the accuracy of this financial information to enable
the bank to make informed lending decisions to those customers
who were previously unable to provide an accurate view of their
financial performance.
Monitoring Loans
Provide scheduled or on demand access to performance reports enabling
banks to achieve the following at a fraction of the existing administration
cost:
-
Early warning where financial performance is below specified
levels allowing the bank to identify risk before other creditors.
-
Earlier identification of loan covenant contravention
-
Access for relationship managers, improving efficiencies in
working with with their customer base and significantly reduces
the administration costs of collecting financial information
from customers.
Luminous equips the bank with groundbreaking tools for managing
and measuring risk by delivering unprecedented insight into a customer's
true financial position.
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