Cententia is highly specialized in advanced and contemporary scoring models as well as advanced statistical tools throughout the Credit & Risk Management – from the origination to the collections and recovery process. Cententia has in-depth experience of developing scorecards for many products in numerous markets around the world. More specifically, we provide the following scorecards, as well as NPL evaluation:
- Application Score
- Behavioral Score
- Collection Score
- Recovery Score
- Portfolio Evaluation (NPL evaluation)
Applications Scorecards are developed using the information that is collected during the origination phase. Based on this, Cententia applies a timely dynamic approach, using advanced techniques in order to comprehend and forecast the customers’ future behavior.
A Credit Application Model predicts the probability of an account defaulting – thus, to reach a certain delinquency category – from the origination date. The Application Scorecards may be used to determine the approval or rejection of credit application taking into account the degree of risk an account bares.
Behavioral Score is a credit tool that can be used in various risk areas for the credit and portfolio management procedures overall. It refers to models that can segment customer accounts and portfolios and provide a numerical prediction of the customers’ future behavior taking into account existingcustomers’ recent credit account history, activity and behavior. The former can contribute significantly in the efficient risk management and can also be used for marketing purposes.
Our methodology, always compliant with Basel II regulations, allows developing accurate behavior models that may provide your financial institution with a great number of advantages on multiple business sectors:
- Identify the risky segment of your credit portfolio
- Identify your profitable customers
- Expand your portfolio on your best customers
- Develop effective collection strategies, based on customized approaches
- Increase your recovery ratios
- Minimize collection cost
- Enhance your credit assessment mechanisms for existing customers
- Develop accurate provision techniques always compliant with the local regulations
- Predict your customers’ future behavior and act proactively
- Identify accounts showing indications of financial stress and develop pre-delinquent treatments
Collection score estimates the probability of a debtor making payments for those accounts in collections. More specifically, a collection scorecard statistically estimates the debtor’s ability to pay. Therefore, the collection scorecard may result in identifying what actions should be undertaken to increase payments.
Collection scoring can aid your organization maximize performance regarding collection. Cententia has in-depth experience in the development of Collection Scorecards.
The benefits of the development and application of a collection scorecard are multiple:
- write-offs are decreased and consequently recoveries are increased
- decision-making is facilitated
- debtors are better segmented and prioritized accordingly and targeted on a tailored made basis
- effective collections strategies are developed
- operations costs are decreased
Recovery Scorecards predict the probability of a write off account to partially or totally recover. They constitute a significant tool for the development of a comprehensive recovery strategy.
Cententia Recovery Scorecards are based on advanced techniques and support your organization so as to achieve increased recoverability in the write off portfolio. Cententia’s Recovery Model may be the key to an effective strategy, so as to minimize operational costs and provide your organization with the optimum way to allocate its write off accounts.
Recently, portfolio securitization and asset sale (NPL portfolio) has become common practice in the Banking Sector, as they provide cash flow to financial institutions and disperse the risk to investors.
Although there is high risk – yet calculated – in such investment, the return rates are higher than average rates in the market. Because of the aforementioned advantages, many investment funds, financial and other institutions, as well as private investors decide to invest in NPL portfolios. With regard to the former, the exact calculation of the portfolio securitization is of significant importance.
Cententia offers advice on portfolio evaluation, PD, LGP through the use of contemporary and tested techniques. Our staff’ s over ten years experience on credit risk, portfolio management as well as market analysis offers added value to your investment option.
In specific, the following services are offered:
- Risk Evaluation
- Portfolio Evaluation
- Development of strategy models
- Investigation of other issues related to the investment
- Assistance in the preparation and monitoring of the sale process
- Process definition for the monitoring and control of future cash flows and support for a potential profit sharing agreement