Tag: forecasting

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

The effects of the COVID-19 pandemic has created extreme volatility in the US markets. While the high unemployment rate and impact on the stock market can be attributed to the pandemic, there were signs that the economy was already headed for a downturn. In a recent webinar, Mohammed Chaudhri, Experian’s UK Chief Economist, stated, “Even in the absence of COVID-19, […] the consensus was that the US was going into a period of a slowdown. Talks of a recession were building and financial indicators all pointed to an inverse yield curve.” With a global recession on the horizon, economists are using different scenarios to forecast potential outcomes. Chaudhri and his team of Experian economists mapped out four macroeconomic scenarios for economic recovery: V-shape scenario: A scenario in which the U.S. is able to recover losses and is able to recover quickly – possibly within 3 months. The impacts of strict lockdowns and social distancing may allow for a V-shape recovery. This V-shape follows previous pandemics and is the most likely outcome. Delayed V-shape scenario: A scenario in which the economy bounces back (albeit much slower than a regular V-shape). This may occur as various states slowly lift their lockdown guidelines and return to business as usual. This delay can be caused by regulations and guidelines that vary from state to state. U-shape scenario: A scenario in which the U.S. is unable to return to pre-COVID-19. W-shape scenario: A scenario that is much more serious than a U-shape and has the greatest impact on the economy. This can occur if the state lockdowns are lifted too early and a reemergence of the virus occurs. In our latest on-demand webinar, our experts discuss current trends which are indicative of emerging patterns and highlight economic forecasts that show some immediate concentrations of risk and exposure and the implications for your organization. Take a deeper dive into the latest data insights relating to the credit economy, and specifically, the impact brought by COVID-19. Explore the macroeconomic outlook, including: The immediate and near-term economic impact Views on how a downturn could impact consumers’ affordability and emerging signs of vulnerability Views on what KPIs you should focus on Watch the webinar