Dexia Bank Uses SAS® for Fast and Accurate Credit Scoring
Dexia Bank receives up to 700 requests for consumer loans a day, which is why the bank relies on an automated risk assessment tool. Thanks to the end-to-end use of SAS technology – from model building and data extraction to analytics for decision support – 85 percent of loan requests are processed automatically. Scoring parameters can be easily adjusted based on new legislation, market evolutions or litigation rates. As a result, the productivity of the Risk Management Department is on the rise, while the improved risk position benefits the bank's overall financial health.
With a broad offering of banking and insurance products and services, Dexia is Belgium's second largest financial group. Like many other financial institutions, Dexia Bank uses a credit scoring procedure to assess the risk of granting a loan to a customer. The sheer number of parameters involved makes this a time-consuming exercise.
Assessing Expected Default
"Our credit scoring method based on expected default analyzes all the information we have on existing customers," explains Sophie Labenne, risk manager at Dexia Bank. "The more we know about the applicant, the better we can assess their ability to pay back the loan. In addition, we must take into account the requirements set out by the Basel II legislation regarding the amount of capital and reserves a bank must keep to cover loan risks."
SAS Scores High
Dexia Bank chose to build their scorecard with SAS. "We had been using SAS technology since the late 1980s for data-gathering purposes," notes Labenne. "Over the years, we added complementary SAS tools to exploit data and produce reports. With the recent addition of modules to develop, model, and monitor scoring systems, we now rely on an end-to-end SAS credit scoring solution that meets all of our requirements perfectly."
From Raw Data to Decision Support
To assess the risk related to each customer, Dexia Bank has developed the so-called ERIC (Evaluation Risk Client) application. The ERIC reports are generated using SAS. Depending on the scoring model, ERIC generates an automatic response: yes, no, or undetermined. In the latter case, the request is forwarded to a classical system based on a product scorecard or to an expert analyst. The target is to limit the number of undetermined cases in order to increase automation. At the same time, Dexia needs to maximize the acceptance rate while minimizing recovery litigation.
Rapid Adjustment to Changing Demands
Preparing the Ground for Marketing Campaigns
"With over 2.2 million Dexia customers, many of whom have several cards and accounts, you can imagine the quantity of information our marketing department has to deal with," stresses Labenne. "SAS predictive analytics helps us identify which of these customers are likely to be interested in a specific product. This significantly increases the success rate of our marketing campaigns, and prevents us from alienating customers that have no interest in certain products or services."
Optimal Balance Between Risks and Available Funds
The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.
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Automate risk assessment
SAS Credit Scoring improves risk and asset positions
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