Our news and views relating to Data Analytics, Big Data, Machine Learning, and the world of Credit.
The time is NOW for model validation and adjustment. One of the major premises used in credit scoring is that “the future is like the past”. It’s usually a rational assumption and gives us a reasonable platform on which to build scorecards whether they be application scorecards, behavioural scores, collection scores or financial models. That is reasonable until something unprecedented comes along. You can read about this black swan event in our previous two blogs here and here.
Principa employs a variety of best-practice credit scorecard building techniques including mathematical programming, regression modelling, optimal segmentation-seek genetic algorithms and reject inference parceling, amongst others. Through our credit risk scorecards businesses can look to improving their credit risk decisioning by 5-30%.
“Unprecedented” is a term with which we’ve all become quite familiar over the last few months. COVID-19 has changed our society and our economy quite drastically. In predictive analytics “unprecedented” has far reaching implications – simply put it’s difficult to build models when we do not have data that reflects similar trends to what we will expect moving forward.