What elements have led to the transformation of CRIF's consulting practice?
"It is a natural evolution of the expertise of our team. Over time we have refined our consulting capabilities, we improved our practice of predictive analytics and achieved positive results in the identification of alternatives for risk management and credit of our customers. The next step could only be to integrate all these aspects and offer our customers a 360° consulting service that completes CRIF Credit Solutions' offer and positioning, and likewise that of CRIF."
How does the new management consulting practice fall within CRIF Credit Solutions and in CRIF overall?
"CRIF's experience in data analysis and its use in a proper and proactive way coincides with the core of the Management Consulting practice: that is to guide the client in the management of the credit value chain as well as risk, through the analysis of data relating to business and the market, with the identification of the best approach to credit management. The offering today is nevertheless broader. CRIF continues to be a leading company in data management, business information and outsourcing. CRIF Credit Solutions is known for excellence in providing integrated solutions which manage the entire value chain of credit (CRIF Credit Management Platform). In this context it was essential to go beyond analytics and processes and to integrate them with regulatory advisory, risk management evolved with advanced models, strategies and credit processes for the conceptual development of software solutions and support services such as BPO, as well as the evolution of 'research' which leverages CRIF information assets."
What are the specific areas which your counsultants support?
"The areas of interest have been identified in order to provide targeted support for different phases of the customer credit life cycle, alongside the offer of CRIF and CRIF Credit Solutions as a whole. Specifically, it was crucial to distinguish between 'services provided on an ongoing basis' and services that are 'pure consulting'.
The ongoing services are organized in the form of 'Factory', covering resources on an ongoing basis in order to provide ongoing support in the following areas:
- Marketing & Benchmarking, to provide services and advice of Benchmarking and competitive positioning by balancing the use of data and predictive analytics.
- Product Analytics or Credit Bureau Scoring Systems, to support the continued development of Credit Bureaus and indicators of predictability provided on a periodic basis.
The 'pure consulting' services are organized in 'Service Lines' to group within conceptual frameworks consistent advice of CRIF Credit Solutions:
- Risk & Regulatory Advisory: consultancy services and advisory to regulatory oversight of the analysis of the characteristics of the current legislation and the impact assessment (primarily for the market of the Financial Services: Banks, Insurance, Financial Companies).
- Process & Product Transformation: supporting the evolution of software solutions of the CRIF Credit Management Platform and the evolution and governance (Program Management) of Credit Process Outsourcing opportunities (primarily Credit Back Office).
- Risk Management & Predictive Analytics: capitalize on 'evergreen' experience and services for the creation of advanced rating and scoring models and in general 'forward looking' evaluations.
To support global markets we have a group of consultants focused on targeting our offer for each target market.
With regards to research that has distinguished your team in the past, how is this structured today within Management Consulting?
"The research is the basis of everything that happens in Management Consulting. We are serving our customers to provide them with useful information and data, and to do that we are committed to periodic studies and research that examine the market as well as new regulations, analyzing effects and prospective results and providing, when feasible, alternative scenarios for our customers.
In this regard, Management Consulting has created two support services deepening regulatory.
Primarily within the service line 'Risk & Regulatory' there is an observatory in order to monitor on a bimonthly basis, along with other company departments dedicated to regulatory insights, the most recent laws providing specific insights on the most relevant changes. Our team recently analyzed the new standardized approach for credit risk in Basel, relative to the treatment of exposures Retail, Real Estate and Corporate. The empirical analysis was shared with institutional bodies (European Central Bank, the Bank of Italy) and with the banking industry (ABI and major CRO Banks Tier 1 and Tier 2) leading to interesting conclusions for the Italian market, especially in Corporate. We have also created a research service that, in addition to producing research reports, also has the aim of creating innovative insights leveraging the wealth of CRIF's information".
With reference to the insights from recent research, can innovations be drawn from the proposed evolution of the Basel standard approach?
"The goal that arises with the new approach is to prevent excessive risk-taking by financial institutions by identifying new variables / drivers for the calculation of the risk related to credit exposures. What we did was to 'experiment' with these new variables and to compare the results obtained on the Italian market. The empirical analysis took into consideration variables such as debt-to-income ratio (income installment) and seniority banking for retail exposures, the use of loan-to-value for real estate exposures and risk weight and impact estimated in terms of RWA for positions Corporate. Specifically, we analyzed the portfolios and assigning weights for the calculation of credit risk Corporate based on two drivers: leverage and turnover. Combinations of Risk Weight proposals from the standard approach may be particularly punitive, up to 300%, if some information is outdated, unavailable or just applicable to specific situations, with dramatic effects in terms of capital and ability to lend ".
