Scoring Specialist/Analyst Jobs

Role Overview

Credit risk is assessed in several different ways. One of the newest, and an increasingly widespread way of assessing risk is to use a ‘scorecard’.

A scorecard is an automated program, developed by a financial institution to follow a set of pre-determined rules designed to assess whether to lend money or credit to a company or individual. It can be programmed to accept or reject applications for credit according to criteria set by the lender, for example in its most simple format it may be programmed to decline credit to people who’s income is less than the monthly repayments on a loan.
 
In reality scorecards are more complex programs, as someone who would traditionally be considered a credit risk by a lender can actually be much more profitable over the long term than someone who poses a limited risk.

For example a university student may pose a credit risk initially, but given that they are likely to secure a decent job in the future, it may be worthwhile for the lender to accept the initial risk with a view to charging a lot of interest payments over the long term and with the assumption that the student will earn sufficient money later in life to re-pay the loan.  The student will also be likely to get a mortgage later in life and therefore it will benefit the lender to retain their custom. Therefore the lender’s profit can be enhanced by accepting the risk of the customer defaulting / getting into further debt.

The acceptance of this risk can be linked into the marketing of other products – if a customer is a potential credit risk, it may be worthwhile for the lender to grant that customer credit, with a view to selling other products to that customer over the lifecycle of the loan. For example someone who runs up large credit card debts will be a likely customer for a consolidation loan in the future.

All these factors / criteria can be programmed into a scorecard.

Risk / Scoring analysts monitor the actions of the scorecards and analyse how they are performing. If necessary they change the rules that govern the scorecard so that the lender’s profitability is enhanced over the long or short term and conversely they can make the lending criteria stricter to minimise the risk to the institution and to ensure that some of the debt is recouped. They also analyse how best to utilise each customer to help with the cross selling of products and they monitor the profitability of each customer to ensure the lender is maximising the potential of the lending portfolio. Analysis of customer behaviour and product performance is a large part of the role.

Scorecard Developers are responsible for designing and building new scorecards that are then put into use. Most lending products are designed for different sets of customers and therefore require different rules. There is no one scorecard that fits all products. 

Day to day, roles in this area involve:
• Analysing customer acquisition and identifying opportunities to maximise take up rates
• Developing & maintaining scorecards and scoring models to support customer management
• Helping understand customer contact behaviour
• Providing assistance in the development of strategies to improve the quality of lending decisions
• Conducting analysis to determine eligibility and limits for personal lending
• Performing analysis to help improve customer marketing selection strategies

Qualifications, Skills and Experience

Completion of a degree in statistics, mathematics or other numerate subject is essential. While a Masters is preferred, candidates with a good first degree will be accepted.

Candidates ideally must possess advanced programming skills and have a working knowledge of SAS/SPSS/SQL/ Excel systems.

They must also have strong report writing skills, advanced analytical skills and be able to work effectively as part of a team.

For an entry-level role, graduates with 12 months analytical experience are preferred, however exceptional graduates with knowledge of relevant software packages will be considered.

Career Progression Path

From entry level, analysts can expect to progress to senior analyst  level within 2-3 years. From there progression can take the form of further technical specialisation, or taking responsibility for a team of analysts. Further promotions can lead to a role heading up a department / portfolio. And from there exceptional and commercially aware candidates can expect to progress ultimately to a Head Of role or even a Board level position. 

This information has been provided by PSD Group Plc, click on their logo to view all of their jobs.

Useful Scoring Links

Institute of Credit Management
The Association of Credit Professionals
Credit Services Association
British Bankers Association