©2015 • Davide Capuzzo• 5/11/2015

Eurisc Analytics

Credit Bureau Analytic solutions

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Agenda

EURISC Analytics: overview What's going on

– Italy– Czech & Slovak Rep.– India– Vietnam– Other countries

Vision

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EU Analytics: overview

Product lines• Credit Bureau scoring, for the

financial and non financial industries (i.e. Telcos and Insurances)

• Credit Bureau new solutions, such as analytic based solutions (i.e. Financial stress Index, Credit Limit, Profiling, Credit Fair Value for risk assessment, No hit scores, ……) and service improvements

• Credit Bureau scoring preselling, with analytics development and case studies that show the benefits of using credit bureau scores and data

• Eurisc Italy• CB Czech Rep.• CB Slovak Rep.• CB India (High

Mark)• CB Vietnam

(PCB)• CB Jamaica • CB Indonesia• CB UAE • CB Tajikistan• CB Indonesia• ……..

Clients

Product management

Providers• Product

Analytics Italy• CRIF India• ……..

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What’s going on in ItalyPerform 2.0

• Developed in 2014• Live from July 2015• Economic impact analysis design• One to one meetings based on

customized analysis: over 15 meetings already managed;

Perform Telecom• Custom version realized for H3G

Perform Zone Consumer• In progress

Perform Zone Business• Kick Off within the year

Inserting EURISC in internal banks’ processes (POC on BPER, BPM)

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What’s going on in Czeck & Slovack Rep.CCB

• Promotion of Finantial Stress Index live from October 2014

SCB• Third generation of consumer credit bureau

score on banking and non banking bureau was developed in the first mid of 2015 and it is live form mid of June

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What’s going on in VietnamPCB GLocal validation

• Market education started in 2013• PCB has approved in July 2015• Kick Off done in July 2015• Go live for the end of 2015

PCB Credit Bureau score• The first custom version of the PCB

credit bureau score is forecasted for the end of 1016

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What’s going on in IndiaHigh Mark

• MFI Credit Bureau Score delivered in July 2015, will be in production within 2015

• Zone score development in progress

• No Hit Score development in progress

• Commercial Credit Bureau score development in progress

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What’s going on in other countriesUAE

• Al Ethiad Credit Bureau score will be developed starting from September 2015

Azerbaijan

• GLocal validation completed

Jamaica

• GLocal validation in stand-by

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General Considerations Credit Bureau Solutions are becoming more and more crucial to defend the

value of data In some case they could represent the marginality not reachable with the

simple data selling Having the solutions often is not enough: it is necessary to show that they

bring real economic benefit They will allow to integrate the new available information sources and tools

So we work to improve

…. but we are ready to fly

The Sprint Proposition

An ecosystem for the credit valuation

(and more …)

©2015 • Marco Ponzoni • 5/11/2015

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©2015 • Marco Ponzoni • 5/11/2015

Sprint: overview Online (web based) solution for risk assessment on credit applications SaaS platform (multi bank) hosted by CRIF

Real time access to the most important data sources: Public data (Protest, Court Judgments) Credit Bureau & Credit Bureau Scoring (Eurisc) Chamber of Commerce information (sole traders, companies) Financial Statements data (SME – limited companies)

Overall evaluation through scoring models and strategies according to customers’ credit policies

Wide possibilities of customizations at all levels: business process, scoring models, strategies

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©2015 • Marco Ponzoni • 5/11/201512

Responding needsLOW START UP COSTS No IT investment (hardware & software) required for banks No internal structures for the ongoing maintenance of the system Variable (linked to the business) rather than fixed cost

QUICK TIME TO MARKET Can be used as a “ready to go” solution to automate credit granting process

BEST PRACTICE ORIGINATION SOLUTION Best in class processes for evaluating consumers and businesses Standard scoring models developed on aggregate data Pre-defined credit strategies

©2015 • Marco Ponzoni • 5/11/201513

2014 figures: customers & volumesCUSTOMERS About 300 (banks and financial institutions) > 80% Credit Unions & Small Banks New players: telcos & utilities (prospects)

VOLUMES More than 2 million transactions 185.000 monthly average (9.000 daily) 80 % Consumer - 20% Companies

©2015 • Marco Ponzoni • 5/11/201514

Sprint ComponentsThe CRIF solution leverages on software components that have proven to be successful in building loan origination systems

Flexible and innovative Business Process Management Suite which provides: Authentication and authorization module Web front end for user interaction Integration with data sources and information providers Workflow engine Data storage

Decision Support System and scoring engine to implement and execute: risk assessment algorithms (scoring modules) credit strategies

©2015 • Marco Ponzoni • 5/11/201515

Foreign countries: localization aspectsMAIN LOCALIZATION ELEMENTS Language front end – Web User Interfaces Currency in many cases origination processes have to support multiple currencies Data Sources connection to the most relevant information provider such as Credit Bureau Input screens to collect country specific data or allow manual acquisition of external data Legal restrictions (e.g. data protection and storage)

CRIF SUPPORT FOR PROCESS LOCALIZATION Consultancy based on the experience matured in several projects Project Methodology based on internally developed templates to facilitate configuration and

maintenance Training Services on CreditFlow and StrategyOne Project Management throughout all the implementation phase On going support to guarantee maintenance and future evolutions of the system

©2015 • Marco Ponzoni • 5/11/201516

Timeline: a look back at 2015 EVOLUTIONS Sprint Consumer: streamlined and improved process Sprint Business: upgrade for “renewals management” (both Web and A2A channels) Sprint Reporting: new standard version ‘’base’’ (included in the Federcasse framework

agreement)

NEW PERFORM 2.0 2 versions (base & advanced); 27 models Sprint scoring models and credit strategies adjustment (standard & custom)

TECHNOLOGICAL UPGRADES Migration to CreditFlow Java to exploit new features (Es. revamping) Upgrage to Windows 2008 (completion) and Oracle 11

2015

©2015 • Marco Ponzoni • 5/11/201517

Timeline: a look ahead to 2016 EVOLUTIONS Sprint Consumer: model completion (leasing, independent contractor) Sprint Business: new rating models for company (unrated roughly to zero!) Sprint Utilities: a brand new process (dedicated customer) Sprint Collection: a brand new process (remember how many customer we have …)

EXTEND THE ECOSYSTEM Sprint Batch: a new approach to manage the portfolio Sprint Reporting: a management dashboard Management Score: to handle startup companies P2P Solution: a new reality is emerging

GLOBAL PERSPECTIVE A Sprint solution for foreign countries (a new "Star"?)

2016

©2015 • Luigi Mingotti • 5/11/2015

CB Big Data Solution

An Intelligent Data Mining Journey

Warning

With Big Data

Comes Great Responsibility

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We are here

The expected journey

New tool New methodology

Existing CB data

Find new data relations

or patterns

Build new services for customers

Existing CB and new data

Find additional

data relations or patterns

Build even better

services for customers

Area of Great Responsibilities

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The tool

3rd Party Technology platform provider

The BDA product used is MANTICA, running on Hadoop framework

Usage of artificial neural network to perform intelligent data mining

Currently used features:– SOM alghoritm– Graphs

What is an Artificial Neural Network?

Computer programs implementing sophisticated pattern detection and machine learning algorithms on a

computer to build predictive models from large historical databases

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Methodology driven by the tool: SOM Algorithm The SOM algorithm (Self-

Organizing Map) works on data samples

It aggregates the samples in clusters (codebooks) whitin a map, upon a “training” phase

It allows a quicker / easier analysis of data patterns or behaviors

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Methodology driven by the tool: Graphs We’re using two type of

graphs:– Of records– Of variables

The graphs represents the items, grouped by the strength (weight) of their relations

It allows the identifications of hidden groups of relations

It allows to show also sub level of links (MRG)

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What’s next

Maturity of the tool

WW

CC1

know

ledg

e of

tool

/ m

etho

dolo

gy

Quick wins

Patterns identified

Services to customers

New product still evolving (e.g. enhancement in progress for supervised analysis)

No shortcuts: clear definition of the business problem and understanding of data are key

It’s not a disruption vs. traditional methods to analyze data, it’s rather an evolution based on:– knowledge– curiosity– objectives– cooperation– patience

Repetable models

Alternative analysis

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Grazie perl’attenzione