Simulation is one of the most neglected yet beneficiary tools in credit risk management, where the outcomes of your decisions lag for 6 to 12 months.

What would today’s credit risk portfolio look like if we acted more conservatively (or aggressively) last year? Depending on data availability (as always), the ability to run alternative decision strategies on your historical credit performance data should be a regular study.

Thanks to advanced versioning capabilities in Mindberg.ai’s decision management platform, you can alter any piece in your past strategy (scorecard threshold, rule edit/add/delete, and alike), re-run your data, and compare the outcomes as Alternative vs. Realized.

Simulation capability is even more critical when managing a lending business. Since there has yet to be any evidence regarding the performance of the target portfolio, it would be wise to start with multiple strategies for several customer groups. For example, running a champion strategy for 80% of customers and two other challenger strategies for two sets of 10% of customers will enable you to collect three sets of outcomes regarding the payment behavior of your target customers in 6 to 9 months.

Mindberg.ai’s simulation capability enables you to make wiser decisions about your portfolio by giving you the maximum outcome of your probable strategies.