Covid-19 has thrown a spanner into the best of business plans. The domino effect of this is on the asset books of banks. Across the spectrum (Commercial, SMEs or Retail), clients are under pressure in all sectors – reduced demand leading to delayed payments leading to larger number of NPAs. With no sector safe from the impact of Covid-19, banks are scrambling to reign in bad debts and maintain a stable asset book. Credit scorecards and processes will change, and portfolios will be reassessed along with their future creditworthiness. The whole credit function may need to be turned on its head.
With digital sales fast becoming the norm, the credit appraisal and approval process needs to keep pace. A digitized loan process with omni-channel, focused approaches – from sales to sanctioning is an important differentiator for banks. Customer credit worthiness models based on segments directly linked to external data and predictive analytics helps banks build a robust sanctioning process. Credit that combines a personal touch and intelligent algorithms enables banks to reduce turnaround time while maintaining a secure book. Robust credit administration processes to track assets throughout their lifecycle, optimized debt management and a coherent collections strategy are equally important for a bank to ensure a holistic view of their credit cycle.
How we add value
- Create and diagnose Credit & Risk Capabilities: Cedar helps clients simplify and strengthen their credit review processes and credit administration processes to drive a positive impact on coverage and enable the effective use of Relationship Manager time. Most importantly it helps clients, whether they are emerging, or large banks figure out their credit and risk management policies, target market approach and collection recovery framework. One size does not fit all anymore.
- Scoring Models: With loan origination moving digital globally, credit scoring models and methods come to the fore. Cedar assists clients segment their customers, evaluate segments on scoring buckets with varied weights, classify scored customers into bands and tiers. These in turn impact the underwriting decisions parameters to form a robust framework.
- 12X58 framework: Cedar conducts detailed evaluations of the clients’ existing credit policy and underwriting framework, in the context of industry and sector reprioritization. Cedar’s proprietary 12X58 framework provides banks with a clear view which sectors to prioritize for lending. Cedar develops a way forward for banks to identify attractive opportunities for lending across key sectors. Due to its global network and vast experience, Cedar also deeply understands the end-user industries that banks lend to.
All of the above expertise is driven with a combination of smart consultants from multi-national companies (and banks) from different countries across the globe. Our leadership team has assisted large and mid-sized banks with multiple engagements covering the entire spectrum of credit lifecycle.