Vous êtes sur la page 1sur 6

Overview

Generating FINANCIAL SERVICES Impact

Auto finance analytics


overview

In today’s environment, Auto finance lending markets continue to experience


tremendous change in terms of credit performance and risk assessment for
different types of borrowers. To navigate profitably through these challenging
financial times and with the new Federal Regulations on credit providers, auto
lenders have to take a fresh look at products, operations, business processes,
systems and controls. New and innovative strategies are required to align
lenders for future success and growth.

PROCESS • ANALYTICS • TECHNOLOGY


Today, the economy is going through a sea change Detailed due diligence of dealers and large
and financial institutions in particular are facing corporates approaching for New, Used and Leased
increasingly complex challenges with greater car floor plan and other commercial vehicle
focus on Risk Management at an enterprise level. financing. Key activities include:
It has now become imperative to focus on end-
to-end customer lifecycle management, starting • Manufacturer’s operating statement analysis
from acquisition to recovery, with an emphasis on – calculation of key operating performance
reducing bad debt, lowering costs, improving cash indicators
flows and retaining customers, while operating • Extensive financial due diligence: Comparison of
within the purview of regulatory requirements. It operating statements with tax returns, account
is critical for organizations to transform traditional schedules, audited statements and external data
approaches into more sophisticated data driven evidences
strategies to accomplish: • Extensive financial due diligence: Comparison of
• Constant and accurate monitoring of portfolios on operating statements with tax returns, account
key performance metrics schedules, audited statements and external data
evidences
• Dynamic and innovative scorecards/strategies to
drive smart growth while managing losses • Analysis to derive adjusted net cash, net worth
and net working capital
• Recalibration and regular refresh of customer
segments, risk tiers and models • Analysis of Guarantor’s financial commitment

• Business and domain consulting • Collateral analysis – computation of Loan To


Value (LTV); Assessing impact of cross collateral,
At Genpact Analytics, we provide credit risk and priority and sub-ordination agreements
collections solutions across various stages of • Derive risk ratings (for comprehensive and interim
automotive retail (consumer) and commercial reviews) using pre-defined scorecards; identify
(Auto dealer) lending, for traditional and leasing triggers and offer rationale on recommendations
businesses across US, Latin America, Europe and
APAC. Genpact‘s key solutions focusing on Auto Retail Dealers line of credit – Underwriting and
lending business are: Credit Reviews

• Effective origination scorecards and risk based Detailed due diligence of dealers and large
pricing corporates approaching for New, Used and Leased
• Credit and Risk Assessment through robust car floor plan and other commercial vehicle
underwriting practices for dealer credit review financing. Key activities include:

• Portfolio management and monitoring • Quick review of dealership’s financial position


• Risk and collections scorecards and modeling for • Comprehensive KYC process
consumer and commercial portfolios • Recommendation on fund based and non-fund
• Collections & Customer Service operations based lines of credit
analytics
Dealer portfolio administration
• Auto reposition and Recovery analytics
• Follow up for Insurance certificates, business
Service offerings license through email / phone calls with dealers /
insurance agents / state and county offices
Wholesale
• Payment Administration: Identify and alert check
Wholesale floor plan financing – Underwriting and return transactions of dealers
credit reviews
GENPACT | Overview
• End to end UCC / lien filings (New, Amendments, • Retail loss forecasting models with stress
Continuation): Identify the event, prepare scenarios
documentation, file lien document and follow up • Lease residual loss and recovery forecasting
for state certificates
• Management of risk exposure to meet capital &
• Customer account management support including reserve requirements
setting up a new account, password reset, profile
• Economic capital allocation
modification etc.
• Deep dive analysis to identify new areas of
• KYC – periodic searches on the dealer portfolio
loss reduction, incremental sales, and profit
using secondary information to establish
enhancement
authenticity of the customer base including
corporate name search, DnB search, OFAC search, Collections and operations analytics
etc.
• Monitoring Policy compliance – Identify and report Advanced collections strategies to gain a strategic
exceptions breaching routine administrative advantage over competition by accepting riskier
compliance and driving items to closure customers without corresponding increases in
delinquencies or losses.
Retail
• Build custom collections models with productivity,
Consumer acquisition and pricing analytics collections efficiency and loss avoidance
objectives
• Bureau and application data based origination risk
scorecard development to predict loss, first pay • Risk and custom score based champion challenger
default, fraud, Bankruptcy, etc. collections strategies to address, pre-delinquency,
early stage delinquency, repossession timing and
• Reject inference models to improve origination profitability
models
• Automated extensions, renewal and repossession
• Risk based consumer loan pricing strategy decision strategies
development
• In-depth assessment of impact of new regulations
• Risk based auto approve/decline decision on portfolio profitability and required counter-
strategies strategies
Account management analytics • Recovery models and strategy development -
account placement & settlement strategies
Post-acquisition analytics to identify changes in
• Forecast delinquency, repossessions and skip
risk measures and devise corrective or preventive
trends
actions for loss mitigation.
• Capacity planning for dialer, manual collections
• Fraud avoidance strategies, dealer fraud, based on seasonal inbound outbound volume
consumer fraud tool development
• Portfolio analytics to drive origination teams to
• Account management & risk behavior scorecard strengthen underwriting criteria
development for retail and lease portfolios based
• Building collector goals and performance
on blended data
management scorecard to drive right behavior and
• Portfolio diagnostic analysis & asset management collections objectives
• Early warning signals to mitigate losses • Performance measurement for external repo and
• Identification of opportunities/leakages through recovery agencies for work load assignment
trend analysis & design of experiments

GENPACT | Overview
MIS and reporting • Credit Risk modeling solutions at any stage of
Basel adoption
• Customized reporting solutions for Auto -
measuring volume for auto originations, rejects, • Increase accuracy of Risk Weighted Asset (RWA)
bookings, credit levels by loan products, regions. calculation in an Advanced Internal Rating Based
(AIRB) framework through:
• Development of comprehensive and insightful
Executive Decision Support to monitor trends and - Estimation: Develop modeling framework to
understand portfolio performance indicators for estimate Probability of Default (PD), Loss given
delinquency, FPD, EPD, repossessions, extensions, default (LGD) and Exposure at default (EAD) for
renewals, skips and losses. calculating RWA

• Build, maintain and standardize Risk, Compliance - Validation: Assist in ongoing validation of model
and Underwriting Reporting accuracy, risk parameters and rating systems

• Tracking key portfolio indicators including sales, - Regulatory Reporting: Conceptualize and
balance build, losses, costs and risk adjusted develop monitoring dashboards as part of
returns across risk segments Basel II internal credit risk control and pillar
3 disclosure for both internal and regulatory
Regulatory compliance & basel reporting
- Stress testing against multiple dimensions
Risk Management services from Genpact Analytics
incorporating macroeconomic scenarios
are designed to assist financial institutions meet the
Regulatory requirements in accordance with Basel - Extensive documentation meeting Basel II
guidelines with specific focus on Credit Risk and guidelines for Internal and External Governance
Regulatory Capital Requirements under the accord. - Risk Exposure Monitoring, E-Capital
The credit risk offering addresses both the foundation Management, Securitization reporting
and advanced internal rating-based approaches.

Wholesale
Broad customer base across
Retail
finance & finance

Experience with auto End-2-end services across the financing cycle


finance companies across
the lending spectrum
$
Originations Underwriting & Wholesale Retail portfolio Collections & Recovery &
funding floorplan management servicing liquidation
A top premium auto captive management
finance company
• 150+ Analysts with advanced degrees & certifications in finance, marketing, statistics
Two of the largest mainstream
and management
auto captive finance units
• Average experience of ~3 years in the Auto Finance Risk Management practice
• Unparalleled combination of deep domain expertise & diverse experience with advanced
The largest pure play auto finance
tools & techniques
company in North America, Latin
America & Europe

USA Canada Germany UK Benelux Italy Portugal Spain Austria Croatia France Sweden Lithuania Romania Others

Supporting more than 20 countries in North America, Latin America & Europe

GENPACT | Overview
Driving customer impact through $
• Comprehensive & periodic credit reviews
• Policy & regulatory compliance management End-2-end …..From
• Data & operational support originations to recoveries
• Process optimisation & re-engineering
• Decision support & research services
• Statistical & quantitative modelling

Delivered an estimated $6 million impact on More than $3.5 million Impact Built new custom origination
collections cost & loss reduction via pre- within 6 months via Repossessions models that resulted into 5%
delinquency & risk based collections strategy prioritisation and work out incremental originations with
development strategy reduced risk levels

Genpact value proposition Tools and Techniques:

We believe that Genpact uniquely provides Genpact has vast experience in using advanced
the relevant skills and experience, scale, global statistical techniques and tools for data mining in the
presence, information security and quality control risk and collections domain. Some of the statistical
management procedures that can meet the high- techniques like Logistic/Linear Regression, Survival
level goals and the detailed requirements. Analysis, Generalized Additive Models, CHAID/
CART based segmentation, Genetic Algorithm/
Our unique strengths as a leading provider of Basel LP based optimization and others are extensively
II risk management services, risk modeling services used in various projects. Some of the prominent
and advanced analytics services are outlined below: tools that our analysts use include SAS, SAS Miner,
SAS Enterprise Guide, Knowledge Seeker, Business
Highly Educated and Skilled Resource Pool with
Objects, Cognos, Crystal Reports, Qlikview, OBIEE,
relevant experience:
Tibco Spotfire and many others. Genpact’s in-house
We have 100+ experts working on PD, LGD and team, called the Smart Decision Lab, is dedicated to
Economic Capital models for global fortune 500 providing insights on the latest tools and techniques
companies for the last 10+ years with advanced in the market; thereby upgrading the analyst skillsets.
degrees/doctorates in mathematics, statistics,
Commitment to Process Excellence:
engineering, economics and other quantitative
disciplines from top universities in India and US Genpact has Six Sigma rigor in project management
and analytics processes. We have robust statistical
Deep Domain Expertise and Vast Experience:
analysis and modeling processes proven through
Genpact has 1000+ professionals focused on the successful solutions we have delivered and
various aspects of Risk Management for Financial generated business impact for our customers.
Services clients. Our experience of working with We have used Lean/Six Sigma methodologies in
different risk data sources, platforms, geographies process automations / Lean initiatives with a view
and products helps us develop customized solutions to enhancing our productivity e.g. Automation of
based on portfolio nuances and objectives. Our segmentation testing through macros, Automation
capabilities have evolved through 13 years of of LGD performance metrics and Automation of
strategic partnership with over 40 leading financial Bivariate Plotting macros, etc. We have also worked
institutions, which include 3 ‘top 10’ US financial with our customers on larger quality initiatives
services majors, 2 top UK banks, 5 Global Auto to reduce cycle-time and improve the quality of
finance majors and 2 leading US co-branded /credit deliverables.
card issuers.
GENPACT | Overview
Best Practices in Data Security: Option to choose from multiple engagement
models:
Genpact follows best practices in Data Security and
Audit Requirements to ensure regulatory compliance Genpact offers various forms of engagement model
and the safety of client’s data. Genpact applies its to suit the varying customer need. We offer partial
deep regulatory knowledge and follows strict data to fully dedicated on – shore resources for shorter
privacy and information security regulations to assignments or pilot projects providing solutions
ensure safety of our client’s data. We go beyond consultancy to fully dedicated team operating as
conventional metrics, and build systems and process an extension of the client. Genpact also operates
to ensure “zero surprises.” We conform and comply in project model with additional need based surge
with key requirements pertaining to privacy laws as requirements.
applicable to the client domicile state jurisdiction,
for example OCC and OTS in US and the Model EU
clauses on data privacy in Europe.

About Genpact
Genpact Limited (NYSE: G) is a global leader in transforming and running business processes and operations. We help clients become
more competitive by making their enterprises more intelligent: more adaptive, innovative, globally effective and connected. Genpact stands
for Generating Impact for hundreds of clients including over 100 of the Fortune Global 500. We offer an unbiased combination of smarter
processes, analytics and technology through our 62,000+ employees in 24 countries, with key management based in New York City. Behind
Genpact’s passion for process and operational excellence is the Lean and Six Sigma heritage of a former General Electric division that has
served GE businesses for 15+ years.
For more information, contact, analytics.marketing@genpact.com and visit www.genpact.com/home/solutions/analytics-research/financial-
services-analytics
Follow Genpact on Twitter, Facebook and LinkedIn.
© 2014 Copyright Genpact. All Rights Reserved.