This paper investigates how to estimate the likelihood of a customer accepting a loan offer as a function of the offer parameters and how to choose the optimal set of parameters for the offer to the applicant in real time. There is no publicly available data set on whether customers accept the...

How to combine varying credit information collected from various sources at difference periods for the purpose of credit assessment is an important issue for some financial companies. In this article, the screening procedures using individual cut and linear cut approaches are proposed to solve...

Relatively there is little empirical research that has been taken to understand how the underlying economy affects customers’ subsequent financial product purchase behaviours. A better understanding of this influence and being able to predict the probability of purchasing are important for...

Purpose – The purpose of this research is to undertake an examination of the impacts of socio-demographic and economic variables on the probability of purchasing financial products. There is relatively little empirical research that has been taken to understand how the underlying economy...

Consumer credit risk assessment involves the use of risk assessment tools to manage a borrower’s account from the time of pre-screening a potential application through to the management of the account during its life and possible write-off. The riskiness of lending to a credit applicant is...

The fact that the Basel Accord formula is based on a corporate credit risk model and the mis-rating of mortgage backed securities which led to the credit crunch have highlighted that developing credit risk models for portfolios of retail loans is far less advanced than the equivalent modelling...

This paper addresses the risk cutoff policies of a retail bank whose objectives are to maximize return on equity for shareholders and live within regulatory capital requirements, such as those of the Basel Capital Accord, to meet unexpected default losses. It investigates the changes that have...

In this article we describe the construction and implementation of a pricing model for a leading UK mortgage lender. The crisis in mortgage lending has highlighted the importance of incorporating default risk into such pricing decisions b y mortgage lenders. In this case the underlying default...

New start-up companies, which are considered to be a vital ingredient in a successful economy, have a different objective than established companies: They want to maximise their chance of long-term survival. We examine the implications for their operating decisions of this different criterion by...

Equipment in the process industry is often subject to decay and requires maintenance, repair and eventual replacement. The challenge of competition and the accompanying regulatory regime requires that actions be integrated and cost effective. Ansell and colleagues in 2001 explored an approach to...