Policy Rules Implementation

Policy Rules are implemented directly into ADEPT Decisions, using a comprehensive and user editable rule library.

Most Loan Origination Systems will enable the implementation of basic rules, but do not allow for continuous modification by business users.

This feature of ADEPT Decisions ensures that the credit risk team’s time is spent on the things that matter, rather than justifying the need to allocate precious IT resource on reasonably straightforward and simple changes.

Traditional Scoring and Adverse Actions

Traditional scorecards can be easily implemented using ADEPT Decisions, and Adverse Actions can be used to provide feedback to your frontline team regarding the reasons why an application may have been declined. Complex calculations can be configured directly in ADEPT Decisions to derive scorecard characteristics.

Most Loan Origination Systems can only implement limited versions of this type of model, and often lack the ability to generate characteristics or adverse actions.

Non-Traditional Model implementation

One of the most important aspects of building a new model is the actual  implementation of the model. ADEPT Decisions makes this easy by providing two key model operationalisation options. Simpler models, such as logistic regression can be implemented directly through the Scoring Function, whilst more complex Ensemble Models such as Random Forests or XGBoost Models can be implemented by calling an external service.

Most Loan Origination Systems cannot implement any models other than traditional scorecards.

Complex Segmentation Tools

ADEPT Decisions enables segmentation of applications into treatment groups using decision trees and matrices. These tools enable business users to perform a granular level of grouping, whilst keeping the strategies visual.

A typical Loan Origination System provides for simple score-based cut-offs for making Accept/Decline and credit offer sizing.

However a Loan Origination System does not have the capacity for complex strategies that optimise approval decisions, exposure setting and pricing.

Flexible Decision Process

ADEPT Decisions has a flexible strategy process. As part of the solution configuration, the ADEPT Decisions project team works with the client to define the sequence and type of each process step required to fully assess an application.

This enables ADEPT Decisions to deliver a wide variety of decisioning outcomes, including not only the Accept/Decline decision and loan size, but any other decisions that the subscriber may wish to make at the same time. This could include pricing terms, maximum and minimum loan tenure, ancillary products to be offered, etc. By adding these additional levers into the application assessment, organisations can have a far greater control over their own profitability.

Loan Origination Systems typically do not have this flexibility. The decisioning that they offer is rigid and limited to simple risk assessment and loan/limit assignment.

What-if Analysis

When credit risk managers and business professionals make changes to strategies, it is best practice to analyse those changes to understand what the combined impact is likely to be on the portfolio. This should be done before releasing the strategy into production.

ADEPT Decisions provides built-in What-if analysis capability, enabling business users to easily run historic application data through strategies to measure their expected impact. The system creates side-by-side comparison reports between the existing and new strategies, which show the business user the expected changes in the relevant metrics.

Loan Origination Systems do not typically provide this functionality, meaning that changes to strategies cannot be easily evaluated before being released.

A/B Testing

ADEPT Decisions provides business users with the ability to simultaneously assign multiple decision strategies to the applications. A/B testing is then conducted on a random allocation of applications in each different strategy.

ADEPT Decisions assigns a test number to each application that is received. Strategies can be assigned to percentages of the base, meaning that not only can new strategies be tested on a random selection of applications, but also that business users can select what percentage of applications each strategy receives.

Applications can be monitored by the strategy that is assigned in order to determine which strategy is the most profitable to the business.

This ability to A/B test different strategies is paramount to controlled credit risk management and cannot usually be found outside decision engines.

Real Time Dashboards

ADEPT Decisions includes a real-time updated dashboard that can be accessed by business users at any time to track credit decisioning KPIs. These dashboards make it possible for the credit team to track trends in acceptance rates, scores, limit allocation etc.

Dashboards can be filtered by date range, credit portfolio and also by strategy. Filtering by strategy provides continually updating feedback on the performance of A/B Testing strategies. These tools are critical to the credit risk management team to ensure that they capitalise on changes in the market.

Typical Loan Origination System reporting tends to be operational and is related to the entire application process and does not provide a detailed view of the credit decisions being taken.