Tag: Oliver Wyman

Today, Experian and Oliver Wyman launched the Ascend Portfolio Loss ForecasterTM, a solution built to help lenders make better decisions – during COVID-19 and beyond – with customized forecasts and macroeconomic data. Phrases like “the new normal,” “unprecedented times,” and “extreme economic volatility” have flooded not only media for the last few months, but also financial institutions’ strategic discussions regarding plans to move forward. What has largely been crisis response is quickly shifting to an urgent need to answer the many questions around “Will we survive this crisis?,” let alone “What’s next?” And arguably, we’ve entered a new era of loss forecasting. After the longest period of economic growth in post-war U.S. history, previously built models are not sufficient for the unprecedented and sudden changes in economic conditions due to COVID-19. Lenders need instant insights to assess impact and losses to their portfolios. The Ascend Portfolio Loss Forecaster combines advanced modeling from Oliver Wyman,  pandemic-specific insights and macroeconomic scenarios from Oxford Economics, and Experian’s quality data to analyze and produce accurate loan loss forecasts. Additionally, all of the data, including the forecasts and models, are regularly updated as macroeconomic conditions change. “Experian’s agility and innovative technologies allow us to help lenders make informed decisions in real time to mitigate future risk,” said Greg Wright, chief product officer of Experian’s Consumer Information Services, in a recent press release. “We’re proud to work with our partners, Oxford Economics and Oliver Wyman, to bring lenders a product powered by machine learning, comprehensive data and macroeconomic forecast scenarios.” Built using advanced modeling and expert scenarios, the web-based application maximizes the more than 15 years of Experian’s loan-level data, including VantageScore® credit score, bankruptcy scores and customer-level attributes.  Financial institutions can gauge loan portfolio performance under various scenarios. “It is important that the banks take into account the evolving credit behaviors due to the COVID-19 pandemic, in addition to the robust modeling technique for their loss forecasting and strategic decisioning,” said Anshul Verma, senior director of products at Oliver Wyman, also in the release. “With the Ascend Portfolio Loss Forecaster, lenders get robust models that work in the current conditions and take into account evolving consumer behaviors,” Verma said. To watch Experian’s webinar on portfolio loss forecasting, please click here and to learn more about the Ascend Portfolio Loss Forecaster, click the button below. Learn More

Today, Experian and Oliver Wyman announced the launch of Ascend CECL ForecasterTM, a solution built to help financial institutions of all sizes more quickly and accurately forecast lifetime credit losses. The Financial Accounting Standards Board’s current expected credit loss (CECL) model has been a hot discussion topic throughout the financial services industry - first when it was announced (and considered one of the most significant accounting changes in decades), and most recently with the FASB’s delay for implementation for smaller lenders. As the compliance deadlines approach, Experian and Oliver Wyman have joined forces to help financial institutions adhere their loan portfolios to the new guidelines. Delivered through Experian’s Ascend Technology PlatformTM, Ascend CECL Forecaster is a new user-friendly, web-based application that combines Experian’s vast loan-level data and Premier AttributesSM, third-party macroeconomic data, valuation data and Oliver Wyman’s industry-leading CECL modeling methodology to accurately calculate potential losses over the life of a loan. “Ascend CECL Forecaster is a critical capability needed urgently by all lending and financial institutions,” said Ash Gupta, a Senior Advisor to Oliver Wyman and former Chief Risk Officer for American Express, in a press release. “The collaboration between Experian and Oliver Wyman allows a frictionless synthesis of industry data, capabilities and experience to serve customers in both first and second line of defense.” The premise behind the model, which will need access to more data than that used to calculate reserves under the incurred loss model, Allowance for Loan and Lease Losses (ALLL), is for financial institutions to estimate the expected loss over the life of a loan by using historical information, current conditions and reasonable forecasts. Built using advanced machine learning and statistical techniques, the web-based application maximizes the more than 15 years of historical credit data spanning previous economic cycles to help financial institutions gauge loan portfolio performance under various scenarios. Ascend CECL Forecaster does not require additional data nor does it require a secondary integration from the financial institution and enables organizations to more quickly test their portfolios under different economic factors. Moreover, financial institutions receive guidance from industry experts to assist with implementation and strategy. Additionally, Experian and Oliver Wyman will host a webinar to help financial institutions better understand and prepare for the upcoming CECL standards. Register today! Read the Press Release Register for Webinar

Credit card balances grew to $786.6 billion at the end of 2017, a 6.7% increase to the previous year and the largest outstanding balance in over a decade. And while the delinquency rate increased slightly to 2.26%, it is significantly lower than the 4.73% delinquency rate in 2008 when outstanding balances were $737 billion. The increase in credit card balances combined with the slight growth in delinquencies points to a positive credit environment. Stay up to date on the latest credit trends to maximize your lending strategies and capitalize on areas of opportunity. Get more credit trends and insights at our webinar on March 8. Register here

There has been a lot of discussion around the auto loan market regarding delinquency rates in the past year. It is a topic Experian is asked about frequently from clients in regard to what particular economic market behaviors mean for the overall consumer lending. To understand this issue more clearly, I ran a deeper dive on the data from our Q3 Experian-Oliver Wyman Market Intelligence report. There are some interesting, and perhaps concerning, trends in the data for automotive loans and leases. Want Insights on the latest consumer credit trends? Register for our 2016 year-end review webinar. Register now Auto loan delinquency rates are at their highest mark since 2008 The findings indicate that the performance of the most recent loans opened from Q4 2015 are now performing as poorly as the loans from the credit crisis back in 2008. In fact, you have to go back to 2008, and in some cases, 2007, to see loan default rates as poorly as the Q4 2015 auto loans originated in the last year. Below we have the auto loan vintage performance for loans originated in Q4 of the last 8 years — going back to 2008. The lines on the chart each represent 60 days late or more (60+) delinquency rates over specific time period grades. For these charts, I analyzed the first three, six, and nine months from the loan origination date. As you can see, the rates of delinquency have steadily increased in recent years, with the increase in the Q4 2015 loans opened equaling or even surpassing 2008 levels. The above chart reflects all credit grades, so one might think that this change is a result of the change in the credit origination mix. By digging a little deeper into the data, we can control for the VantageScore® credit score at the loan opening, or origination date, and review performance by looking at two different score segments separately. Is there concern for Superprime and Prime consumers auto loans? In the chart immediately below, the same analysis as above has been conducted, but only for trades originated by Superprime and Prime consumers at the time of origination. You can see that although the trend is not as pronounced as when all grades are considered, even these tiers of consumers are showing significant increases in their 60+ days past due (DPD) rates in recent vintages. Separately, looking at the Subprime and Deep Subprime segments, you can really see the dramatic changes that have occurred in the performance of recent auto vintages. Holding score segments constant, the data indicates a rate of credit deterioration in the Subprime and Deep Subprime segments that we have not observed since at least 2008 — back to when we started tracking this data. What’s concerning here is not only the absolute values of the vintage delinquencies but also the trend, which is moving upward for all three time periods. Where does the risk fall? Now that we see the evidence of the deterioration of credit performance across the credit spectrum, one might ask – who is bearing the risk in these recent vintages? Taking a closer look at the chart below, you can see the significant increase in the volumes of loans across lender type, but particularly interesting to me is the increase in 2016 for the Captive Auto lenders and Credit Unions, who are hitting highs in their lending volumes in recent quarters. If the above trend holds and the trajectory continues, this suggests exposure issues for those lenders with higher volumes in recent months. What does this mean for your business? Speak to Experian's global consulting practice to learn more. Learn more Just to be thorough, let's continue and look at the relative amounts of loans going to the different score segments by each of the lender types. Comparing the lender type and the score segments (below) reveals that finance lenders have a greater than average exposure to the Subprime and Deep Subprime segments. To summarize, although auto lending has recently been viewed as a segment where loan performance is good, relative to historical levels, I believe, the above data signals a striking change in that perspective. Recent loan performance has weakened to a point where comparing the 2008 vintage with 2015 vintage, one might not be able to distinguish between the two. // <![CDATA[ var elems={'winWidth':window.innerWidth,'winTol':600,'rotTol':800,'hgtTol':1500}, updRes=function(){var xAxislabelSize=function(){if(elems.winWidth<elems.winTol){return'12px'}else{return'14px'}},xAxislabelRotation=function(){if(elems.winWidth<elems.rotTol){return-90}else{return 0}},seriesLabelSize=function(){if(elems.winWidth<elems.winTol){return'12px'}else{return'16px'}},legenLabelSize=function(){if(elems.winWidth<elems.winTol){return'12px'}else{return'16px'}},chartHeight=function(){if(elems.winWidth<elems.rotTol){return 600}else{return 400}},labelInside=function(){if(elems.winWidth<elems.rotTol){return false}else{return true}},chartStack=function(){if(elems.winWidth<elems.rotTol){return null}else{return'normal'}};this.sourceRef=function(){return['Source: Experian.com']};this.seriesColor=function(){return['#982881','#0d6eb6','#26478D','#d72b80','#575756','#b02383']};this.chartFontFamily=function(){return'"Roboto",Helvetica,Arial,sans-serif'};this.xAxislabelSize=function(){return xAxislabelSize()};this.xAxislabelOverflow=function(){return'none'};this.xAxislabelRotation=function(){return xAxislabelRotation()};this.seriesLabelSize=function(){return seriesLabelSize()};this.legenLabelSize=function(){return legenLabelSize()};this.chartHeight=function(){return chartHeight()};this.labelInside=function(){return labelInside()};this.chartStack=function(){return chartStack()}}(), updY=function(chart){var points=chart.series[0].points;for(var i=0;i elems.rotTol){if(thisWidth<20){var y=points[i].dataLabel.y;y-=10;points[i].dataLabel.css({color:'#575756'}).attr({y:y-thisWidth})}}}},updX=function(chart){var points=chart.series[0].points;for(var i=0;i elems.rotTol){if(thisWidth

According to the latest Experian-Oliver Wyman Market Intelligence Report, mortgage originations for Q2 2015 increased 56% over Q2 2014 — $547 billion versus $350 billion.

According to the latest Experian-Oliver Wyman Market Intelligence Report, mortgage originations increased 25% year over year in Q1 2015 to $316 billion.

According to the latest Experian-Oliver Wyman Market Intelligence Report, HELOC originations increased 21% year over year, moving from $25.6 billion in Q1 2014 to $31 billion in Q1 2015.

Credit trends from the most recent Experian–Oliver Wyman Market Intelligence Report point to a steady economic recovery. Bankcard charge-offs decreased 13 percent year over year (4.5 percent versus 3.9 percent) and delinquent dollars for the 90–180 day past due delinquencies decreased 17.5 percent for the same timeframe (1.6 percent to 1.3 percent). These trends are a positive sign for overall economic recovery and evidence that the current growth in bankcard originations is not coming at the expense of increased delinquencies. Sign up to attend our upcoming Webinar on Q3 credit trends and take a closer look at the impact of consumer behavior on the economic recovery. Source: Data for this article was sourced from Experian’s IntelliViewSM, a Web-based data query, analysis and reporting tool.

Mortgage origination volumes increased to $427 billion in Q4 2011 – a 31 percent quarterly gain. However, overall 2011 originations of $1.35 trillion were 16 percent lower than 2010 volumes. Sign up to attend our upcoming Webinar, which will focus on current credit trends and feature a closer look at the overleveraged consumer. Source: Experian-Oliver Wyman Market Intelligence Reports.

The average bankcard balance per consumer rose to $4,359 in Q1 2012 – an 8 percent increase from the previous quarter. The increase resulted primarily from balance increases to VantageScore® A and B segments, which increased 31 percent and 11 percent, respectively. Download the latest Experian industry white papers. VantageScore® is owned by VantageScore Solutions, LLC.

The strongest growth in new bankcard accounts is occurring in the near-prime and subprime segments of VantageScore® credit score C, D and F. Year-over-year (Q1 2011 over Q1 2010) growth rates of 20 percent, 46 percent and 53 percent were observed for each of the respective tiers. Listen to our recent webinar featuring bankcard credit trends Source: Experian-Oliver Wyman Market Intelligence Reports

Even as interest rates remain at near-record lows, mortgage originations declined for the second quarter in a row in Q2 2011 to $268 billion, a 19 percent decline over the previous quarter. Refinance activity that spurred originations in 2010 has not been as prevalent this year. Listen to our recent Webinar on consumer credit trends and retail spending. Source: Experian-Oliver Wyman Market Intelligence Reports.  

In Q3 2011, $143 billion – or nearly 44 percent of the $327 billion in new mortgage originations – was generated by VantageScore® A tier consumers. This represents an increase of 35 percent for VantageScore A tier consumers when compared with originations for the quarter before ($106 billion, or 39 percent of total originations). Watch Experian's Webinar for a detailed look at the current state of strategic default in mortgage and an update on consumer credit trends from the Q4 2011 Experian-Oliver Wyman Market Intelligence Reports Source: Experian-Oliver Wyman Market Intelligence Reports. VantageScore® is owned by VantageScore Solutions, LLC.

While retail card utilization rates decreased slightly in Q3 2011, retail card delinquency rates increased for all performance bands (30-59, 60-89 and 90-180 days past due) in Q3 2011 after reaching multiyear lows the previous quarter. Listen to our recent Webinar on consumer credit trends and retail spending. Source: Experian-Oliver Wyman Market Intelligence Reports