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Underwriting and Risk-based Pricing Analysis
Led by the mono-line credit card companies, consumer lending
has rapidly become an analytically intensive and data-driven business.
Other consumer lending industries, including automotive and mortgage,
are also employing sophisticated analytical techniques to improve
understanding their customer base and to identify profit opportunities.
Bates White provides a comprehensive set of services to assist
decision makers with optimizing the financial performance of their
companies. We take a rigorous analytical approach to assessing
portfolio economics, designing products, building predictive models,
and managing credit risk.
Bates White has extensive experience developing pricing, underwriting,
and statistical modeling strategies to enhance the economic performance
of consumer finance businesses. Our professionals have constructed
sophisticated pricing strategies, developed mass customized marketing
campaigns, conducted customer segmentation and profitability analyses,
and devised approaches to combat adverse selection. These strategies
have lead to significant economic returns for our clients.
Led by founding member and world-renowned econometrician Dr.
Halbert White, Bates White has developed proprietary data mining
and analysis tools that provide cutting-edge statistical modeling
solutions to complex problems. Bates White accounts for economic,
regulatory, and data constraints to formulate approaches that
meet strategic business objectives and maximize the effectiveness
of product strategies. We work directly with product and operations
managers, risk managers, financial officers, statisticians, and
attorneys to implement and integrate proposed strategies. These
strategies need to work in conjunction with other business functions
such as risk management, loss forecasting, sales force management,
account management, or servicing.
In addition to supporting business strategies, Bates White has
developed statistical models and tests for complex litigation
disputes, and frequently provides advisory services, litigation
support, and expert testimony to a variety of corporate and legal
clients.
Our Approach to Modeling and Analysis
Based on years of experience developing and managing consumer
finance businesses, Bates White has developed a core set of guiding
principles to provide superior and differentiated services.
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Lending is an annuity business. Profitability
should be measured on a static pool and life cycle basis. |
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Product design is essential to avoiding adverse selection
and achieving superior credit performance. |
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Product design is essential to avoiding adverse selection
and achieving superior credit performance. |
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Superior credit performance is not solely achieved with
a risk model, but through a multi-step defense program. |
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Marketing decisions should be supported by a ROI or NPV
analysis. |
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Capturing data is essential at every stage of the customer
relationship. |
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Customer segmentation strategies must be relevant to
information available at key decision points. |
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Every major decision requires thorough testing and analysis
before wide-scale implementation. |
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Results should be continuously tracked and analyzed for
strategy improvements. |
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Real-world solutions balance analytical sophistication
with ease of implementation. |
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on selected underwriting and risk-based pricing analysis experience.
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