Monitoring Service

Scoring solutions can give a business a powerful advantage. But to help ensure continued success, it is important to monitor the performance and behaviour of the score after implementation. It is crucial to know how your models are performing and whether they are working as expected—or whether there are problem areas and the score needs to be recalibrated or redeveloped. Scorecard monitoring is also becoming increasingly important for NCA as well as Basel compliance.

In our dynamic environment, many changes can weaken the performance of a score and therefore the performance of your portfolio. Here are a few of the factors monitoring can help you identify and address in adjusting your model:

• Changes on the operational side of the client as well as the impact of these changes
• Any changes in the approval policy of the company
• The take-up rate and the percentage of accounts actively trading
• Any changes in the population since the model was developed
• The significance of the shift in population and how it affects the stability and performance of the scoring solution
• Shifts in risk distributions of the portfolio
• The size distribution of the current quarter’s population on the credit matrix
• The performance of the credit portfolio this quarter
• The performance of the credit portfolio over a period of time
• The delinquent performance of the credit portfolio
• The degree of delinquency and bad rate trends over a period of time
• The seasonal performance of the credit portfolio

Monitoring is conducted in different stages. Within about the first month of implementation, integrity testing is carried out. Thereafter, standard monitoring is conducted monthly, quarterly or ad hoc, depending on the needs of a business.