Replies to This Discussion

Permalink Reply by Blair on August 18, 2008 at 3:43pm

From my point of view, traditional Risk Management focuses on credit underwriting risk (credit risk modeling) and loss forecasting. In the current environment of origination FTE cuts across the country there are likely many resources available. However, the Default Strategy analytic resources are likely to be in huge demand as delinquency rates are rising rapidly. The smartest lenders will beef up their default strategy departments with resources being added to dialing strategy, workforce management, collection and recovery modeling and segmentation, etc. Risk loss forecasting is important but loss mitigation strategy is more important at this time.

Permalink Reply by JJ Hornblass on August 18, 2008 at 4:10pm

Thanks, Blair. Do you think there are enough people to fill those default strategy departments?

Blair said:

From my point of view, traditional Risk Management focuses on credit underwriting risk (credit risk modeling) and loss forecasting. In the current environment of origination FTE cuts across the country there are likely many resources available. However, the Default Strategy analytic resources are likely to be in huge demand as delinquency rates are rising rapidly. The smartest lenders will beef up their default strategy departments with resources being added to dialing strategy, workforce management, collection and recovery modeling and segmentation, etc. Risk loss forecasting is important but loss mitigation strategy is more important at this time.

Permalink Reply by Blair on August 22, 2008 at 2:56pm

I think there are not enough experienced default strategy people to fill the entire need. However, companies can probably get some good talent from reductions in force which are occuring on the credit originations side of firms and then cross train the former credit analysts with existing operation analysts. I believe firms which act quickly in strengthening their default strategy / operations analysis staffs will have a competitive advantage over their peers.

Permalink Reply by JJ Hornblass on August 26, 2008 at 6:15pm

How long do you see that cross-training taking these days, Blair?

Blair said:

I think there are not enough experienced default strategy people to fill the entire need. However, companies can probably get some good talent from reductions in force which are occuring on the credit originations side of firms and then cross train the former credit analysts with existing operation analysts. I believe firms which act quickly in strengthening their default strategy / operations analysis staffs will have a competitive advantage over their peers.

Permalink Reply by Hazurasingh B Siviya on October 14, 2009 at 4:08pm

Blair,
Do you see work load optimization taking place by increasing automation (induction and fine tuning of rules engine on the collection side, both for forecasting defaulting behavior pattern based on various parameters and also providing data to model these behaviors ) and thus extracting more work out of these analysts.
Cheers
S.Hazurasingh

Blair said:

I think there are not enough experienced default strategy people to fill the entire need. However, companies can probably get some good talent from reductions in force which are occuring on the credit originations side of firms and then cross train the former credit analysts with existing operation analysts. I believe firms which act quickly in strengthening their default strategy / operations analysis staffs will have a competitive advantage over their peers.