Scorecard Reviews
Reviewing the impact that a scoring solution has on business operations is an essential part of the automated solution. This may be in the form of, a scorecard validation that takes place when an organization is considering implementing a scorecard, or a regular monitoring exercise conducted after the implementation of the scorecard. Both involve taking an extract of data from a client’s database of credit applications and analyzing this data to ensure that the expected results are achieved.
Validation Exercise
A validation exercise is undertaken when an organization is considering implementing a scoring solution. The purpose of the validation is to determine whether the scorecard would be an effective tool to use for assessing the risk of applicant and making automated decisions for the organization. This is usually done when an organization is purchasing a generic (off the shelf scorecard), or intending to utilize an existing scorecard on another portfolio.
Monitoring Exercise
A monitoring exercise is undertaken when an organization has implemented a scoring solution. They are completed on a regular (often quarterly) basis with the purpose of the exercise being to determine whether the scorecard is providing an effective tool for making automated decisions for that organization.