Obstacles to Credit Risk Management

Obstacles to Credit Risk Management- Credit risk modeling poses different challenges to banks and Fintech companies. A solution can lay in a modeling platform that caters to both. With the global financial crisis still recent, credit risk management is still the focus of intense regulatory scrutiny. While stricter credit requirements as a “top-down” approach have helped mitigate some economic risk, it has left many companies struggling to overhaul their approach to credit risk assessment.
In the scramble to implement risk strategies to improve overall performance and secure a competitive advantage, a company must overcome significant credit risk management challenges, such as:

Inefficient Data Management

Credit risk management solutions require the ability to securely store, categorize, and search data based on a variety of criteria. Any database needs to be updated in real-time to avoid potentially outdated information, as well as be keyword optimized to ensure the easy location of information.

Limited Group-Wide Risk Modeling Infrastructure

Sometimes it’s not sufficient to examine the risk characteristics modeled by a single entity—a broad, comprehensive view of all risk dimensions as seen from above is key to explaining the risk posed by a new borrower to the group. Robust stress-testing capabilities and model management that spans the entire modeling life cycle is key to securing accurate risk assessment.

Lacking Risk Tools

Identifying portfolio concentrations or re-grade portfolios is required to ensure you’re viewing the big picture. A comprehensive risk evaluation scorecard should be able to quickly and clearly recognize the health and weaknesses associated with a loan.

Less-than-intuitive Reporting and Visualization

Overlook cumbersome spreadsheet-based methods—to discover the most valuable insights, data and study must be displayed in an intuitive, clean, and clearly reflected way. Stripping away irrelevant data that overburden analysts and IT can further zero in on the most appropriate information. The credit risk management software extended by GDS Link is state of the art and provides the most accurate assessment of risk possible.