Credit Underwriting & Risk Profile Assessment
This page explains implementing the use case of credit underwriting using a combination of Finscale micro-services.
Summary: Credit Underwriting are the basic practices of assessing the credit worthiness of an individual or a collection of borrowers. With Finscale, most of Credit underwriting is an automated use case with few exceptions of flagged cases requiring manual approval or rejections.
CREDIT SCORING, PRICING and RISK RATINGS:
Component | Feature | Description | Secondary Description |
Credit Scoring Engine | Credit Scoring automation | Determine chances a borrower will fail to make a payment on a loan and identity credit risk, credit score | Ability to generate a credit score based on business rules |
Pricing Engine | Pricing with Interest | Determine a loan offer for an eligible borrower based on dynamic Risk category, explicit Interest, Principal Range, amortization structure | Ability to create a loan offer based on configured System Administration |
Pricing Engine | Pricing with Charges | Ability to post, reconcile or map fees to loan offers at entry point from LMS | Ability to associate Fees with Loan offer based on configured System Administration |
Risk Rating | Risk classification framework automatiom | Determine lending risk buckets associations with loan portfolio distributions | Ability to tag Risk buckets based on configured dynamic Risk categories in System Administration |
UNDERWRITING RULES:
Feature | Description |
Run workflows to automatically underwrite and verify applications | Ability to run workflow scenarios based on System Administration mappings |
CREDIT UNDERWRITING MEMO:
Component | Feature | Description | Secondary Description |
CREDIT UNDERWRITING MEMO | Loan Underwriting: Dynamic Risk Assessment | Determines if a borrower's unique loan application is an acceptable risk. | Underwriters assess the borrower's ability to repay the loan based on an analysis of their credit, capacity, and collateral. |
System Administration: Dynamic Score Card Generator:
Design and Setup Score card components for Credit underwriting and underlying risk categories |
Ability to create, delete, update and read Eligibility Index, based on multiple factors |
Ability to create, delete, update and read Stability Index, based on employment tenure & employment type factors |
Ability to create, delete, update and read Affordability Index, based on income factors such as DTI, existing loan liabilities, LTV etc |
Ability to update and read External Credit Reporting System Data such as Experian, CRIF etc. |
Ability to create, delete, update and read Character Index: Social Capital |
Ability to create, delete, update and read Character Index: Social Media |
Ability to create, delete, update and read Alternative Assessment Index: Expense Assessment & Spend analysis:Spend management by tracking spending patterns of individuals, with saving suggestions and financial advice for ROI |
Ability to create, delete, update and read Alternative Assessment Index: Income Tax Assessment |
Ability to create, delete, update and read Alternative Assessment Index: Financial Statement Assessment |
Ability to create, delete, update and read Historical Behaviour Index: Repayment Behaviour for Reschedule and Refinance |
System Administration: Business Rules for Lending:
Workflow Components of Loan Products Lifecycle Events other than standard events such as Approval, Underwriting, Disbursal, Closure |
Ability to create, delete, update and read loan lifecycle events and branches of loan lifecycle events |
Screening and filtering criteria based business rules for Loan Underwriting: Pre Screening or Eligibility Analysis |
Ability to create, read, update and delete screening business rules in a graphical approach |
Ability to create, read, update and delete weightage to different screening criteria |
Ability to create, read, update and delete validation and restrictions in screening criteria in a graphical approach |
Define Risk Categories for Lending (Risk rating) |
Ability to create, read, update and delete Risk Categories definitions |
Ability to create, read, update and delete Risk Categories mapping to specific Users |
Ability to create, read, update and delete Risk Categories mapping to Loan Products |
Ability to create, read, update and delete Risk Categories mapping to dynamic Score Card |
Ability to create, read, update and delete Risk Categories mapping to Loan Portfolio management |
System Administration: Portfolio's Risk Management |
Definining Segmentation for Portfolio's Risk reporting, compliance and internalization, identification of Risk drivers, triggers |
Generator for borrowing products including interest rates, maturities, amount, etc. |
Generator for creating sectors or industry types for lending |
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