Creating the Credit Risk Output Strategy

2 Tasks

30 mins

Pega Credit Risk Decisioning

Visible to: All users

Beginner

Pega Credit Risk Decisioning

English

Scenario

When a customer applies for a cash loan, the Credit Offers decision strategy generates three key outputs: a credit offer, a credit risk score, and credit eligibility. This strategy relies on external Credit Bureau data, a risk-based pricing model, a scorecard to determine the customer's credit score, and credit policy eligibility rules.

The business would now like to use the Credit Offers Decision strategy to make a final decision, to Approve or Decline the credit offer.

They would like to present the final decision along with the relevant Credit offers, Credit Score and Credit Eligibility Policy information back to the calling Credit Application system.

The following table provides the credentials you need to complete the challenge:

Role	User name	Password
Credit Risk Manager	CreditRiskManager	rules

Your assignment consists of the following tasks:

Task 1: Create the Credit Risk Output strategy

Create a new strategy and import the 3 flows of the Credit Offers decision strategy.

Task 2: Calculate the final decision

Use reference data from the Credit Offers Decision strategy to determine the final decision.

 

You must initiate your own Pega instance to complete this Challenge.

Initialization may take up to 5 minutes so please be patient.

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Challenge Walkthrough

Detailed Tasks

1 Create the Credit Risk Output strategy

1. On the exercise system landing page, click Launch Pega Infinity™ to log in to the Decision Management portal.
2. Log in as a Credit Risk Manager:
   1. In the User name field, enter CreditRiskManager.
   2. In the Password field, enter rules.
3. In the My Worklist section, click Credit risk strategy to open the change request.
4. In the Scope of changes section, click Create > Decision > Strategy.
5. On the Create Strategy landing page, in the Strategy Record Configuration section, in the Describe the purpose for this new record field, enter Credit Risk Output.
6. In the Strategy Results class section, in the first field, select Origination.
7. In the Context section, in the Apply to field, enter Data-CreditRiskCustomer.
8. In the upper-right corner, click Create and open to open the strategy canvas.
9. Right-click the strategy canvas, and then click Sub strategy > External to add a Sub Strategy component to the canvas.
10. Right-click the Sub strategy component, and then click Properties to configure the component:
    1. In the Name field, enter Credit Score.
    2. In the External strategy field, press the Down arrow key, and then select Credit Offers.
    3. Select the checkbox next to Specify a single component within the strategy, and then, in the Component list, select Credit Score.
    4. Click Submit to close the properties dialog box.
11. Right-click the strategy canvas, and then click Sub strategy > External to add a Sub Strategy component to the canvas.
12. Right-click the Sub strategy component, and then click Properties to configure the component:
    1. In the Name field, enter Credit Eligibility.
    2. In the External strategy field, press the Down arrow key, and then select Credit Offers.
    3. Select the checkbox next to Specify a single component within the strategy, and then, in the Component list, select Credit Eligibility.
    4. Click Submit to close the properties dialog box.
13. Right-click the strategy canvas, and then click Sub strategy > External to add a Sub Strategy component to the canvas.
14. Right-click the Sub strategy component, and then click Properties to configure the component:
    1. In the Name field, enter Credit Offers.
    2. In the External strategy field, press the Down arrow key, and then select Credit Offers.
    3. Select the checkbox next to Specify a single component within the strategy, and then, in the Component list, select Prioritized Credit Offers.
    4. Click Submit to close the properties dialog box.
15. Hover over each Sub Strategy component, and then click and drag the grey arrow to connect each one to the Results component.
    
16. In the upper-right corner, click Save.
17. Open the Test run pane to test the strategy:
    1. In the Settings section, select Data set.
    2. In the Data set field, enter or select SimulationSetDDS.
    3. In the Customer ID field, enter or select Customer433.
    4. Click Save & run.
    5. Click each of the Sub strategy components.
       Note: Notice how each Sub Strategy component outputs directly from the relevant output flow of the Credit Offers decision strategy.

2 Calculate a Final Decision

1. Right-click the canvas, and then select Aggregation > Group by to add the component to the canvas.
2. Hover over the Credit Eligibility component, and then click and drag the grey arrow to connect it to the Group By component.
3. Right-click the Group By component, and then click Properties to configure the component:
   1. In the Name field, enter Eligible for Credit.
   2. In the Aggregates section, click Add item.
   3. In the Property field, enter or select .IsEligible, in the aggregation type list, select TRUE IF NONE, and in the Source field enter .pyIsActive.
   4. In the Aggregates section, click Add item.
   5. In the Property field, enter or select .Reason, in the aggregation type list, select CONCAT, in the Source field enter .pyLabel, and in the delimiter field, enter the pipe symbol (|).
   6. In the For remaining properties section, confirm that the Include model results for first radio button is selected.
      
   7. Click Submit to close the properties dialog box.
4. Right-click the canvas, and then select Aggregation > Group by to add the component to the canvas.
5. Hover over the Credit Offers component, and then click and drag the grey arrow to connect it to the Group By component.
6. Right-click the Group By component, and then select Properties to configure the component properties.
   1. In the Name field, enter Eligible Credit Offers.
   2. In the Aggregates section, click Add item.
   3. In the Property field, enter or select . IsThereAlternativeOffers, in the aggregation type list, select TRUE IF ANY, and in the Source field enter .IsAlternativeOffer.
   4. In the Aggregates section, click Add item.
   5. In the Property field, enter or select .IsThereRequestedOffers, in the aggregation type list, select TRUE IF ANY, and in the Source field enter .IsRequestedOffer.
   6. In the For remaining properties section, confirm that the Include model results for first radio button is selected.
      
   7. Click Submit to close the properties dialog box.
7. Right-click the canvas, and then select Business rules > Decision Table to add the component to the canvas.
   
8. Right-click the Decision Table component, and then click Properties to configure the component:
   1. In the Name field, enter Set Final Decision.
   2. In the Defined on section, click Strategy result.
   3. In the Decision table field, enter or select FinalDecisionConsumer.
   4. In the Supply data via section, map the parameters to the following properties:

      Parameters
      IsEligible	EligibleforCredit.IsEligible
      IsThereRequestedOffers	EligibleCreditOffers.IsThereRequestedOffers
      IsThereAlternativeOffers	EligibleCreditOffers.IsThereAlternativeOffers

   5. Click Submit to close the properties dialog box.

9. Right-click the Decision Table component, and then click Open Decision Table to inspect the decision table.
   1. On the Parameters tab, check the three parameters:
      
   2. On the Table tab, check the Conditions and Actions, including the final decision outcomes, and inspect the condition required for an approval.
      
   3. Close the decision table to return to the strategy.
      
10. Right-click the canvas, and then click Enrichment > Set Property to add the component to the canvas.
11. Hover over the Set Final Decision component, and then click and drag the grey arrow to connect it to the Set Property component
12. Hover over the Set Property component, and then click and drag the grey arrow to connect it to the Results component.
13. Right-click the Set Property component, and then select Properties to configure the component:
    1. In the Name field, enter Set Output Properties.
    2. In the Define action, target, and source section, click Add item.
    3. In the Target field, enter .pyName, and then click the Source field and enter .FinalDecision.
       
    4. Click Submit to close the dialog box.
14. Right-click the canvas, and then select Arbitration > Filter to add the component to the canvas.
15. Hover over the Credit Offers component, and then click and drag the grey arrow to connect it to the Filter component.
16. Right-click the Filter component, and then click Properties to configure the component:
    1. In the Name field, enter Suitable Credit Offers.
    2. In the Filter condition field, enter SetOutputProperties.FinalDecision!="DECLINE".
    3. Click Submit to close the properties dialog box.
17. Right-click an arrow pointing to the Results shape, and click Delete to remove it, and then repeat this for all other arrows pointing to the Results shape.
18. Hover over the Set Output Properties component, click and drag the grey arrow to connect it to the Results component, and then repeat this step for the remaining components in the following order:
    1. Suitable Credit Offer
    2. Credit Eligibility
    3. Credit Score
       
19. Test the strategy using the SimulationSetDDS Data Set.
20. In the Customer ID field, enter Customer357, and then click Save & Run.
21. In the Show component level values for list, click Number of decisions.
    
22. In the Results in Credit Risk Output section, click the Next icon to cycle through the different outputs, and check the Business Issue, Group and Name properties.
23. Click the Set Final Decision component and check the Segment property, which reflects the row number of the decision table, and check the Final Decision property.
    Tip: Test the strategy with different customers and notice the number of decisions for the components as you change the customer ID. For customers who are declined for a loan, try to investigate why the customer has been declined a loan.

Confirm your work

1. In the upper-right corner, click the user icon, and then click Switch Portal > Credit Risk portal.
   
2. Agree to switch the display to show the Credit Risk portal.
3. In the navigation pane of the Credit Risk portal, click Create > Sample App to create a new credit risk estimation Case.
   
4. In the Credit Customer section, in the CustomerID field, enter or select Customer11.
5. In the Credit Risk Results section, review the following information:
   1. The Final Decision for the customer.
   2. The requested or alternative Product offer.
   3. The Segment in which the customer is placed.
   4. The Internal Score.
   5. The Credit Bureau Score.
      Note: The application approves the StudentLoan requested by Customer11.

6. In the Credit Customer section, in the Num of Credit History Inquiries 1M field, enter 13, and then in the Credit Risk Results section, click ReDecision.
   Note: The application declines the StudentLoan requested by Customer11 as the result of a Credit History Inquiries Check.

7. In the Credit Customer section, in the CustomerID field, enter or select Customer104, and then click ReDecision.
   Note: The application declines the ConsumerLoan requested by Customer104 but suggests investigating an alternative offer.

8. In the Region Code field, enter 001, and then click ReDecision.
   Note: The application approves the ConsumerLoan requested by Customer104 if he lives in Region 001.

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This Challenge is to practice what you learned in the following Module:

• Creating the Credit Risk Output Strategy v2

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Available in the following mission:

• Credit Risk Decisioning v2