The Credit Risk Sample Application Use Case

The user interface of the Credit Risk sample application effectively presents these integrated results. The what-if page is divided into two main sections: the Credit Customer section and the Credit Risk Results section.

The Credit Customer section displays essential customer information such as CustomerID, the requested product, Date of Birth, Marital Status, Total Income, and Total Expenses. This section helps users understand the customer's financial and personal background.

The Credit Risk Results section presents the outcomes of the Credit Risk Output decision strategy, including the final decision, product information, and credit scores.

These outputs are specific to this sample application. In a real-life credit risk decisioning application, the outputs are fully customizable to meet business requirements.

When you run a new test, the application calls the Credit Risk Output strategy and displays the results.

The financial institution wants a comprehensive strategy which ensures that the loan approval process is precise and based on a thorough evaluation of the customer's financial profile.

The Credit Risk sample application must adhere to a range of business requirements to ensure accurate, compliant, and effective decision-making.

• Product Availability: The application should ensure that only products available in the customer's region are offered, considering local financial practices and customer needs.
  
  
• Internal Scores: Use internal models to calculate credit scores based on customer attributes such as income, employment history, and existing financial obligations.
  
• External Credit Bureau Data: Integrate external scores from credit bureaus like Equifax to complement internal scores. This data provides an external perspective on the customer's creditworthiness, reflecting broader credit behavior and history.
  
• Combined Scoring Approach: Develop a strategy to combine internal and external scores to form a comprehensive risk profile. This combined approach ensures a balanced view of the customer's credit risk, leveraging both internal insights and external benchmarks.
  
• Minimum Income and Financial Stability: Set minimum income thresholds and financial stability requirements based on customer data.
  
• Eligibility rules: Implement rules to check the customer's employment status, and credit history, and ensure that all required documents are valid and up-to-date.
  
• Risk-Based Pricing: Integrate credit scores into the pricing model to adjust the loan terms based on the borrower's risk profile.
  
• Offer Prioritization: Prioritize loan offers based on customer attributes and business criteria such as the loan amount, term, and repayment capacity
  
  .
• Comprehensive Data Aggregation: Aggregate data from multiple sources, including internal databases and external credit bureaus, to form a complete view of the customer's credit profile.
  
• Clear Decision Explanations: Provide clear explanations for final decisions, including reasons for approval or decline.

Meeting these business requirements ensures that the Credit Risk sample application provides precise, compliant, and effective credit decision-making. By integrating regional restrictions, leveraging internal and external scores, applying rigorous eligibility rules, and ensuring transparency, the application can deliver reliable and informed credit evaluations.

In the following modules, you will learn how to build the various parts of the credit risk comprehensive strategy.