For years, fraud and credit have operated in separate silos. But Zions Bancorporation’s recent $50 million charge-off — tied to suspected fraud and borrower misrepresentation — is a clear sign that those boundaries are disappearing. Fraud isn’t just a compliance problem anymore – it’s a credit quality problem. Managing credit risk starts with managing truth.

Mitigating credit risk is vital to managing credit portfolios. Key strategies include credit analysis and underwriting, diversification, collateral, credit limits, monitoring, credit risk transfer, and stress testing. These help reduce the likelihood and impact of borrower defaults. There is no one-size-fits-all approach—strategies should be tailored to the portfolio’s specific needs.

Managing credit risk is like crafting the perfect dog biscuit—balance high-quality loans, diversification, and risk for a healthy portfolio.

Here's a step-by-step explanation of how bootstrapping works in scorecard development.

Monitor the credit risk cycle to reduce losses and maintain a healthy credit portfolio with effective risk management measures.

In this blog, we will discuss the concept of reject inference and how it is used in scorecard development.

Explore the essential role of application scorecards in credit risk management, focusing on accuracy and reliability.

Explore the nuanced debate on Debt to Income vs. Uncommitted Monthly Income assessments in banking.

Discover how recovery curves can improve collection and write-off management, boost financial health, and enhance organisation's processes.

Markov Chains are a powerful mathematical framework that plays a crucial role in credit risk management.

We explore what factors influence the choice of sample size and how to strike the right balance to ensure a robust and reliable method.

The future of credit scorecards lies at the intersection of traditional logistic regression models and AI.

The Phillips Unemployment and Inflation Curve is a valuable tool in credit risk management.

As businesses and financial institutions face a growing number of climate-related challenges, it’s imperative to ask the question: should...

Lenders and financial institutions use different methods to evaluate a borrower's creditworthiness.

Understanding the importance of the three C's in credit risk management and how they're used to assess the creditworthiness of entities.