One of the most frequently delivered projects by ABC is a complex review of underwriting process in banks. ABC has repeated this exercise in 13 countries across CEE and it is valid topic for majority of newly acquired clients. Typical Underwriting review takes up to 5 weeks and it covers following areas:


Identification of Risk Patterns in Portfolio of Disbursed Loans

It helps to understand risk profile of portfolio and groups of clients bearing the biggest risk. Combining demographics and credit parameters, risk patterns are analyzed.


Profitability of Various Segments

In portfolio examines risk patterns from profitability point of view. It can well determine segments where bank is losing money and those that are profitable.


Process of Loan Approval

The process (acquisition/approval/disbursement) is reviewed in order to identify potential gaps in the process and technical background of loan application.


Fraud Prevention and Detection

A special part of project focused on fraudulent signals and treatment of applications where such suspicion exists. Black list structure, front-line training and general fraud awareness is discussed and reviewed.


Default Type Investigation

A root-cause analysis of loans that are not being re-paid. Analyzing all stages of loan approval process, this activity helps to identify process gaps and the stage of process that most likely caused the default event.

Portfolio data extract is a must for all analyses performed during the project. History of 3-4 years is an ideal basis and majority of the parameters needed are standard data fields available in bank core system. What clients find most helpful is finding out how credit policy works in reality in their organization. Many being surprised to see results which typical monitoring processes are not able to track such as: too high tickets granted to risky clients, highly risky segments not being priced sufficiently, or too high loan-to-value granted in case of mortgage loans.


Once review completed, clients receive results of all analyses performed a list of suggestions for improvement. These can be divided into various areas such as: Credit policy, Fraud measures, Scoring or Process setup.


Being a rather diagnostic type of a project, underwriting review helps our clients to identify areas for improvement. We are pleased to help our clients even after this review project in areas such as application scorecard development or risk-based pricing concept implementation.