Improving customer bankruptcy forecast to reduce reserve requirements
Improving customer bankruptcy forecast to reduce reserve requirements
1 Pages© ExlService Holdings, Inc. 2006-2013 Client Major credit card issuer Challenge A major U.S. credit card issuer provisions reserve funds to cover defaults by cardholders who declare bankruptcy. Overestimating customer bankruptcies leads to cash reserves lying idle; underestimating leads to borrowing by the credit card issuer. EXL’s client wanted to predict the relationship between macroeconomic forces and bankruptcy in order to improve t
