Our client is one of Asia’s most prominent banks with total assets of over US$10 billion. The bank caters to a broad customer demographic group with different credit products – from overdraft loans to MSME and corporate loan products.
With a vast customer base, the bank faced tremendous pressure to keep track of all overdraft accounts and cash credit products on an account-to-account basis.
Our client manually monitored credit limits for Overdraft (OD) accounts to understand the borrower usage to increase or decrease the credit limits based on customers’ credit history. Also, the bank was manually identifying accounts that were not using overdraft limits and allocated them to potential creditworthy borrowers who were exceeding the credit limits.
But the manual allocation, reviewing, and monitoring of accounts was tiresome, error-prone, and held back the bank’s overall loan revenue.
Similarly, the bank faced difﬁculties in validating companies’ credit usage for cash credit products to increase or decrease the credit limits and scrutinize any personal spending from the credit provided.
Lastly, the bank’s risk assessment was solely based on the hands of a branch manager, who evaluates the customer risk appetite based on the income statement, balance sheet, and other collaterals provided. This led to higher default risk.
To overcome these challenges and reduce OD/CC delinquency percentage, boost approval rates and maximize loan-loss adjusted net interest income, the client wanted to transform their current portfolio risk assessment system with a innovative and scalable automation solution.