Posts by Risk Management

Banking on the living will

  - by Mike Horrocks This week, several key financial institutions will be submitting their “living wills” to Washington as part of the Dodd-Frank legislation.  I have some empathy for how those institutions will feel as they submit these living wills.  I don’t think that anyone would say writing a...read more

A united approach to risk management

- by Mike Horrocks Henry Ford is credited to have said “Coming together is a beginning. Keeping together is progress. Working together is success.”   This is so true with risk management, as you may consider bringing in different business units, policies, etc., into a culture of enterprise...read more

Thankful for Basel

- by Mike Horrocks Earlier this week, my wife and I were discussing the dinner plans for Thanksgiving.  The yams, cranberries, and pumpkin pies were purchased and the secret family recipes were pulled out of the cupboard.  Everything was ready…we thought.  Then the topic of the turkey was brought...read more

Monitoring risk factors – the distinction of risk analysis and data paralysis

-- by Mike Horrocks Have you ever been struck by a turtle or even better burnt by water skies that were on fire?  If you are like me, these are not accidents that I think will ever happen to me and I'm not concerned that my family doctor didn't do a rotation in medical school to specialize in...read more

Risk Segmentation Lessons from the Tub

-- by Mike Horrocks Let’s all admit it, who would not want to be Warren Buffet for a day?  While soaking in the tub, the “Sage of Omaha” came up with the idea to purchase shares of Bank of America and managed to close the deal in under 24 hours (and also make $357 million in one day thanks to an...read more

Continuous-loop Decisioning - What is it?

-- by Mike Horrocks The realities of the new economy and the credit crisis are driving businesses and financial institutions to better integrate new data and analytical techniques into operational decision systems. Adjusting credit risk processes in the wake of new regulations, while also increasing...read more

Calculating the expected business benefits of improved decisioning strategies

--by Roger AhernTo calculate the expected business benefits of making an improvement to your decisioning strategies, you must first identify and prioritize the key metrics you are trying to positively impact.  For example, if one of your key business objectives is improved enterprise risk...read more

Which types of decisions will improve your business benefits?

--by Roger AhernIt’s been proven in practice many times that by optimizing decisions (through improved decisioning strategies, credit risk modeling, risk-based pricing, enhanced scoring models, etc.) you will realize significant business benefits in key metrics, such as net interest margin,...read more

The value of good decisions and the cost of bad decisions

--by Roger Ahern The value of a good decision can generate $150 or more in customer net present value, while the cost of a bad decision can cost you $1,000 or more.  For example, acquiring a new and profitable customer by making good prospecting and approval and pricing decisions and decisioning...read more

Response to "Still on the Fence"

There are a lot of areas covered in your comment: efficiency; credit quality (human side or character in an impersonal environment); and policy adherence.  We define efficiency and effectiveness using these metrics: • Turnaround time from application submission to decision; • Resulting...read more