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Marginalen Bank: from reactive to proactive risk modelling

Tieto’s powerful credit decision engine helps Marginalen Bank compete to attract new borrowers

Per Dahlqvist

Head of Business Development & Analytics Products, Credit Solutions and Services

The challenge

In a constantly moving loan market, Marginalen Bank saw the need for a more advanced decision engine that could test and deploy changes to business logic quickly.

The solution

Tieto’s Credit Business Rules (cBR) is a flexible and scalable decision engine used by banks and other financial institutes to determine if an applicant should receive a loan, a card or a lease, and the terms of the contract. The powerful software pulls data from a range of sources and uses machine learning to offer more accurate pricing and improved customer acquisition costs at speed.

More about the solution

About the customer

Founded in 2010, Marginalen Bank offers competitive and straight forward financial services to private customers and corporates, including unsecured loans.

More about Marginalen Bank

Respond to changes in the loan market by running tests and implementing changes at speed.

Speed and agility

Respond to changes in the loan market by running tests and implementing changes at speed.

Built specifically for the credit market, the solution features an intuitive and visual interface that requires little training to use.

Simple to use

Built specifically for the credit market, the solution features an intuitive and visual interface that requires little training to use.

Lower your risk with a model that uses up-to-date data and machine learning to find the best customers for your products.

Better business decisions

Lower your risk with a model that uses up-to-date data and machine learning to find the best customers for your products.

Marginalen Bank offers loans to consumers and businesses. When the loan market became even more competitive the bank needed to find a way to stand out from other lenders.

Not that long ago, consumers would go directly to their bank to borrow money. However, the growth of aggregators that trawl lenders to find the best offer, means consumers today no longer base their decisions on loyalty. Instead they choose lenders according to price or contract terms.

Active risk models

In this fast-moving loan market, lenders like Marginalen Bank must work actively with their risk models on a daily basis to frequently adjust their pricing, scoring and terms to keep their competitive edge and, ultimately, attract new borrowers. However, not all solutions facilitate this approach.

Previously, when Marginalen Bank wanted to change their logic, they needed to submit a request to their vendor and wait for it to be coded.

The bank needed a solution that worked faster. So, they turned to their long-term partner, Tieto and their highly-automated Credit Business Rules (cBR) solution.

Automated solution

This decision engine combines risk scoring, lending thresholds and business rules to determine if an applicant should be offered a loan and the terms of a contract. It can handle a high volume of data, both single parameters, such as income, and more complex variables like pricing matrix.

“When we want to make a change to our logic, we input our calculation into cBR and run a test case, in fact sometimes we run thousands of test cases. Then we can tweak parameters, such as age or income to see what impact it would have. It’s so easy to use that I go in almost every day to try out new scenarios.”

Mohammad Ali

Data Analyst, Marginalen Bank

Now Marginalen Bank can input new risk strategies into the software, see the outcome almost instantly and, if wanted, deploy the logic straight away. This means they can react faster to the changing market and make sure their offers are attractive to customers.

“In a highly competitive market, cBR has helped Marginalen Bank become more agile and react to changing conditions quickly. The solution can also reduce customer acquisition costs and find new customers, that you may not have previously considered.”

Per Dahlqvist

Head of Business Development & Analytics Products, Credit Solutions & Services, Tieto

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