Risk Management
by kuberfinancial
Having a strong risk management team is the foundation of any successful FinTech or lending portfolio.

There are many types of risk management. Compliance, Enterprise, Infrastructure and Data risk management are so important to today’s banks and consumer-facing lending companies.

However, one often forgotten type of risk management is credit and fraud risk management. Fraud and Credit Risk management are foundations of a healthy consumer lending portfolio. It checks for early defaults and overall charge-offs.

That is to say, fraud and credit risk management govern the initial underwriting approval, pricing and line/amount assignment to new customers.

Although an internal team is massively important to be the gatekeeper of your default rates, an external workforce is always recommended as an additional resource to conduct A/B testing, champion/challenger testing and industry benchmarking.

Credit risk and fraud risk management is the foundation of some of the most successful portfolios we see today. A robust identity verification strategy and custom credit risk model scores are the standard practice if you want to launch and manage a portfolio today. We have the tools, experience and decades of benchmarked models to help you launch your portfolio today.

Risk Management is key to your success

Protection

A full range of Life, Serious Illness, Income Protection, Pension Term, and Unit Linked Comparative Quotes plus Business Assurance reports, and Health Insurance comparisons.

Investments

Product Fact Sheets and a full Comparative study of products covering Unit Linked Bonds, With Profit Bonds, Tracker Bonds, Deposit Products, Guaranteed Bonds and Regular Savings.

Funds

Our Fund Advice section provides Fund Fact Sheets and comparative Fund Performance details based on Fund Price information from the leading supplier of information in this area.

Choose an approach that’s right for you

Fraud vs. Credit Risk

We are often asked how much of our client’s charge off numbers are fraud and how much is related to Credit. In a prime credit space, fraud is about 5-10% of total charge-off, however, in a sub-prime portfolio that number could go as high as 30%. There are a number of tools, techniques, models and reports that can help you manage your Fraud and Credit Risk. Contact us and we love to talk to you about our experiences.

Pricing vs. Loan Amount (Risk-Based Pricing)

Line Assignment, Loan Amount Assignment and Pricing based on consumer or small business’s credit, income and cash flow is the new standard in consumer and small business lending. Banks, Financial Institutions and FinTech startups can’t ignore or put off Risk-Based Pricing any longer. Giving the wrong amount of credit to the worst performing portion of your portfolio could be easily avoided by statistical modeling and risk-based pricing.

Roll Rate vs. Charge-Offs

Have you looked at your latest Roll Rate Analysis lately? How fast are your 30 days past due “DPD” loans rolling to 60 DPD or worst straight to charged off? These analyses are critical in managing your portfolio post origination. These reports can measure the effectiveness of your underwriting strategy, pricing and line assignment algorithms as well as your operations and collections team’s performance.