Jun 2020 | Risk Analytics

Commercial portfolio management needs a 360° view

Building this allows you to gain a holistic view of risk and opportunity and enables you to effectively manage your commercial portfolio. Having this view is ever more important during times of unprecedented volatility; it allows you to spot signs of stress or opportunity and take action where needed, to better serve your business customers.

No two lending portfolios will be impacted in the same way, but we can work with you to help build a 360-degree view of SMEs within your portfolio. Using our data and decisioning capabilities, you can drive proactive portfolio management; making the right lending decisions for your business and your customers.

Your internal data

This is your customer data which may include KYC status, time on books, data from originations, reviews, AML cycles or current account data. There’s your single customer view which will allow you to see linked entities and products taken, showing you balances, arrears and asset details. This is a good source of data and allows you to build a picture of what the exposure of risk is, across a lending group of customers.

The internal picture shows how the customer has performed within your business across the product lines you have and provides a snapshot of the health of the cashflow of the organisation. However, the internal picture will differ between organisations and so it’s important to look at other factors to get an all-round view of an SME, enabling you to make an accurate assessment of the risks and opportunities that go with them, appropriate for your portfolio.

The external picture

It’s essential to have the external picture; to enrich the internal data and ultimately to know how a customer is trading and performing. We can work with you to get the most holistic view of SMEs within your portfolio. External data we can provide to help you build this view includes companies house, registry trust, gazette data, sector data and other data points such as trade credit, arrears, credit limits and outstanding balances. We can also look at how this compares with lending data, the SMEs ability to serve the debt and their historical position. Comparing this at a sector level and providing a forward looking view will give you a good understanding of SMEs within your portfolio to allow you to make the right decisions for you and your customers.

Mixing and blending internal and external data will allow you to fully assess and understand where the stresses are, who needs support and triage through the cycle and how the SME compares across the sectors. The introduction of our Experian Commercial Volatility Index has allowed us to bring in comparisons and trends for you to better understand the volatility of that business. This new short-term index enables you to accurately assess the commercial viability of new and existing customers by identifying early signs of stress in a business leading to the potential for payments to be missed or defaulted. Using it with forward looking scores like Commercial Delphi or other Experian risk scores is already proving successful in enabling lenders to make timely, accurate and well-informed decisions when it comes to supporting SMEs.

To find out more about how we can help you please contact us.