February 2009

Tired of conducting tiresome affordability studies and administrating the endless paperwork of credit applications?

Compuscan now offers a total solution for making the best possible business decisions by automating it all for you.

We have combined a credit bureau score, decision matrix and a credit application processing system, giving you as the credit provider complete peace of mind in terms of your credit risk decisions.

Our Credit Bureau Score - CompuScore:

CompuScore is our company’s advanced credit bureau score that was developed in partnership with Score Sharp, one of the leading credit scoring and analytical consultancy companies in SA.

It provides you with a score or number, typically between 0 and 900, indicating the level of risk associated with an individual credit applicant.

• Please Note: From the image above, that the score is prominently displayed in the top left side of the image and adjacent thereto, the risk level in which the score falls is displayed.
• Below the score and the risk level (i.e. in the middle of the image) are the five risk levels and corresponding score ranges.
• The black bar indicates the actual score.
• At the bottom of the image are the reasons for decline, based on a specific set of bureau rules developed by ScoreSharp to give the credit provider an even better indication of the particular risk level for a specific credit applicant.
• The Declined Reasons that is generated by CompuScore includes the following:

•  
  • Negative Information
  • Poor Payment behaviour for Previous Loans
  • Poor Behaviour reported by Branch
  • Limited Loans History
  • Poor Recent behaviour on Previous Loans
  • Poor Recent behaviour on CPA accounts
  • Limited Accounts history
  • Limited History

• Working on a score of 595, which falls into the high risk level, there are a number of actions which can be taken i.e. either reject the application; or charge higher interest rates; and/or limit the loan terms; and/or apply intensive loan repayment monitoring to the account.

A high score indicates low risk, while a low score indicates high risk. The model slots borrowers into groups which indicate the likelihood of a loan being repaid.

CompuScore was developed using statistical techniques, analysis and the historical credit information sourced from data on Compuscan’s credit bureau database. It was developed across various loan terms based on a sample of over 500,000 consumers.

Multiple types of data were utilised including CPA, NLR and micro lending specific credit information. Good and bad repayment behavioural trends were modeled, using the latest statistical techniques, which led to the development of a set of highly predictive scores that can be applied across all your loan products.

The score drives your lending decisions, and can be complimented with additional bureau rules to ensure that you acquire profitable business. By using this product you can also decrease your credit risk, increase your customer retention and have the ability to come up with risk based lending strategies.

Our Decision Matrix (Codix)

When conducting a creditworthiness check for a credit applicant, you as a credit provider will always look at credit bureau information (do a Credit Check) as part of your evaluation process to find out what the associated credit risk per applicant is for a specific loan product. Each loan product will have different requirements or 'bureau rules' that need to be taken into account when looking at the credit bureau information.

Your 'decline rules' or 'bureau rules set' for a specific loan product might include some of the following rules:

• CPA Data more than 3 accounts with worst arrears > 6 months
• Credit Score (CompuScore) > 400
• Two or more judgements
• Admin order
• Identity Theft/Fraud
• Debt Counselling Notice
• Dispute Logged
• NLR Data Adverse Last 12 months
• CompuScan Collection Data > 1

As a credit report provides you with a large amount of credit information on an individual credit applicant, the manual process of filtering through this credit information to check the above rules can be a tedious and time-consuming task.

This affects your bottom line as you are not able to spend the most of your time on the credit worthy clients due to the time spent on the manual evaluation process.

CompuScan has developed a smart rules based decision matrix, called Codix, already integrated into your Credit Check Application (i.e. CompuScan’s Credit Check) that eliminates this time-consuming manual task.

Once Codix is set-up into your Credit Check Application it automates your credit decisions by:

• Taking your specific 'bureau rules set' for each loan product into account
• Automatically filtering through all the credit bureau information
  
  
  • The credit data that it uses for mapping includes: 
    
    
    • CompuScan Micro Lending Credit Information
    • NLR data
    • CPA data
    • SAFPS fraud data
    • Judgement data
      
      
• Displaying a concise summary as part of your credit report that provides you with the recommended actions for each loan product in your loan portfolio.

Please see an example below of a screenshot of Codix and the recommended actions and decline reasons per loan product that will be part of your Credit Report:

The loan products that are approved are marked with a green tick and the loan products that are not approved for the specific applicant are marked with a red cross. It also indicates the reasons for the decline.

After you have looked at the risk recommendations generated by Codix you can continue with your affordability study based on the rest of your credit policy and business rules.

We at Compuscan will monitor your chosen rules sets on a continual basis and give advice where we think we can improve to automate your credit decisions. You can also choose to incorporate credit scoring models like CompuScore into Codix for more predictable results. We will help you to decide what the best option is for your business.

More reasons why you should consider setting-up Codix with your Credit Check Application:

• Significant time and cost savings, both of which can also increase competitiveness.
• Codix leads to reduced staffing requirements associated with performing credit reference checks.
• Your credit decisions will be more consistent by adhering to specific bureau rules per loan product.
• Codix speeds the approval process, allowing your business representatives to provide even greater levels of customer service.
• A customer can perform a credit check from any linked branch and it can be scored, processed and underwritten.
• Codix improves the consistency, relevancy, speed and precision of customer decisions, deriving more value from every customer interaction.
• Your credit decisions can be customised to meet specific product needs.
• Codix is NCA compliant.

Our Credit Application Processing System - Xcellerator

You, as a credit provider receive a large amount of credit applications each day.

Applications are usually paper based and it leads to a large number of forms that needs to be approved and filed. Checking the creditworthiness of each individual applicant and conducting affordability studies based on your unique business rules and credit policy is a time-consuming task.

This affects your bottom line as you are not able to spend the most of your time on the credit worthy applicants due to the time you have to spend on the evaluation process and administration thereof.

In other words, the application process is one big administration headache.

Compuscan has developed a smart credit application processing system, called XCellerator that eliminates the above problems and permits you to spend your time on the good applications and reduce the time that you spend on applications that are not likely to be approved.

It uses your unique business rules for an individual loan product to make automatic credit decisions about the credit worthiness of your credit applicants. It also automates the whole credit application process ranging from the moment the applicant applies for the loan to the moment the applicant signs the credit agreement.

To make use of this advanced functionality, you can simply send us your unique business rules and credit policy for each of your individual loan products and we will develop a customised system for your specific credit assessment needs.

The Automated Application Process supported by Xcellerator:

1. Once a credit applicant submits his/her application form, your credit staff can capture the applicant's necessary data electronically on your business computer on a customised computerised loan application form.

2. Xcellerator will start by checking if there is any existing information on the applicant on your current company database by linking to your loan administration system e.g. Proloan. For example: if the applicant has applied for a loan before or not and if he/she has any bad records with your company.

3. Once Xcellerator have finished checking internally, an external credit check is conducted by linking with an external credit bureau, like Compuscan.

4. Once the credit check is completed Xcellerator automatically links to Codix (our credit decision engine) and then calculates the creditworthiness of the applicant based on your specific business rules and the specific scorecard (i.e. CompuScore) for each loan product.  

5. Once you have made a decision Xcellerator will print the pre-agreement documentation as well as the final credit agreement for signature.

More Reasons to use XCellerator:

• Reduces application turnaround time by automating key processing steps such as calculation of credit scores; request, retrieval, and interpretation of credit bureau reports; preparation of application logs and periodic status reports; and automatic tickler queuing of pending applications for management attention.
• Facilitates efficient portfolio growth by enabling more applications to be processed with current staff levels, and offers the ability to rapidly introduce new products.
• Our credit application processing system is provided on a fully managed platform.
• Collects applicant data and makes credit decisions based on customisable business and credit policy rules.
• Reduce application processing time
• Reduces operational costs
• Improves accuracy
• Increases process adherence
• Drives revenue

Summary of Xcellerator Features:

• Application Workflow Processing: The most critical feature of our system is its Application Workflow Processing, which allows an application to be initiated, routed to the appropriate staff in a pre-defined sequence, processed, tracked, and eventually completed and filed. When this workflow capability is used, a structured process without the inefficiencies of paper cramp is resulted. Paper applications will not lie on someone’s desk waiting for processing nor will they be lost among a pile.

• The following processes are built in:
  
  • Indexing & Data Entry: Application requirements are keyed into our system together with some basic application information.
  • Data Verification: Data entered are verified, preferably by different staff, to ensure completeness and correctness.
  • Negative File Check: It enables you to find out if your applicants have any bad records.
  • External Credit Check Interface: Our system will send requests to external agents (such as Compuscan or other credit bureaus) for an outside credit check.
  • Decision Engine Interface (Codix): Our system will calculate the credit worthiness of credit applicants based on the business rules or specific scorecard for each of the loan products.
  • Credit Approval: The system enables you to capture information needed for credit approval. Credit approval and the assignment of a credit limit or facility is done with limited input from users, thereby minimizing human error.
  • Management Review: Management may review selected applications based on specified criteria.
  • Supports many lending products.
  • Tailor credit policies and business rules to each distinct product offered.
  • Offer institutions the option of controlling functions such as data entry, decisioning, document preparation, and booking through centralised/decentralised application processing, regardless of the number of processing sites.
  • Allow customer-focused product selection capabilities using business rules to determine alternative product offering(s) for the customer.