2- Banks have all sorts of information about their customers and they also use credit history...

2- Banks have all sorts of information about their customers and they also use credit history of those customers from external sources when they assess applications eligibility of extend a loan. Suggest how Data Analytics could be used by banks to get a clear view of their customers’ eligibility for a loan. Assume the bank has access to a customer’s loan history, credit card transactions, deposit history, and credit deposit registration. Given these sources of information, discuss how the bank can assesses that the customer could repay the loan.

Expert Solution

Data analytics can help banks segregate the customers and identify customers that have a high potential to default, determine the profitable areas and fraud analysis. The analytics helps in the bank generating pre approved loans for customers that have high transactions, have a good repayment history and maintain healthy balances. Such customers usually have lesser probability of default and the bank can save resources and costs through pre sanctioning the loans. Also, it can use the analytics to cross sell its other offerings such as insurance, stocks to clients that conduct regular transactions. It aids in better servicing the high net worth individual clients and provide better offerings. Analytics also helps in incorporating the customer needs, market changes and technological improvements. The banks can assess a borrower's ability to repay through the average balance that is maintained, the number of cheque returns in banking, number of years of relationship with the bank.

jeff jeffy answered 1 year ago

Think about earthquake preparation. You have probably been bombarded with information from all sorts of government...

Think about earthquake preparation. You have probably been bombarded with information from all sorts of government entities A. Which scenario should someone in San Diego be more concerned about, a magnitude 8.1 on the stretch of the San Andreas Fault from the Salton Sea to San Bernardino, Wrightwood and Palmdale, or a magnitude 7.1 on the offshore portion of the Rose Canyon / Newport-Inglewood Fault (Dana Point to LaJolla)? Explain your answer. B. What steps should you take...

Consider the following: 1. Banks that lend money to customers,2. Consumers use credit cards for purchases,3.retired...

Consider the following: 1. Banks that lend money to customers,2. Consumers use credit cards for purchases,3.retired people on fixed incomes,4. college students taking out student loans In the reading it argues that inflation redistributes income,that is not neccessarily fair or equitable Some people and companies are more vulnerable than others. Some people and companies can adjust income to combat higher prices and redistribution. 1.List the four above from least to most vulnerable. 2. In paragraphs 1-4 explain why you ranked...

You’ve also heard me talk about how economists are looking at all sorts of micro indicators...

You’ve also heard me talk about how economists are looking at all sorts of micro indicators – like electricity usage, to get a sense of how bad the situation is (while they wait for the lower-frequency macro data to be collected.) North vs. South Korea are a good indicator of how prosperous they are relative to each other based on satellite images of their night-time electricity usage. (Google it!). What are economists finding out electricity usage during the time of...

Dyson is considering changing the credit term for its customers and also enforcing its credit policy...

Dyson is considering changing the credit term for its customers and also enforcing its credit policy more strongly. Dyson’s annual sales is $13 million and the current credit term is 3/30, net 45. Right now, 10% of the customer paid by cash, 20% of the customer paid in Day 30, 50% of the customer paid in Day 45 and still take the discount (which they shouldn’t), and 20% of the customer paid late in Day 55. Dyson wants to change...

Firms grant credit to customers as a way to increase sales. However, granting credit also exposes...

Firms grant credit to customers as a way to increase sales. However, granting credit also exposes the firm to the risk of uncollectible accounts. List and describe three actions a firm can take to reduce the risk of bad debt expense. For each action listed, describe the potential costs involved with these steps.

Explain credit risk as it affects banks and discuss the techniques banks can use to manage...

Explain credit risk as it affects banks and discuss the techniques banks can use to manage the moral hazard created by a credit risk exposure.

Think about depositors lending money to banks and banks lending that money to loan customers. Why...

Think about depositors lending money to banks and banks lending that money to loan customers. Why do we have financial intermediaries like banks? What is the future of banking?

MRE2. The file Credit Approval Decisions Coded provides information on credit history for a sample of...

MRE2. The file Credit Approval Decisions Coded provides information on credit history for a sample of banking customers. (18 pts) a. Use regression analysis to identify the best model to predict credit score based on the other variables. b. Report and interpret R2 and Standard Error (SE) for the model developed in a. c. Interpret the regression coefficient(s) for the model developed in a. DATA: Coded Credit Approval Decisions Homeowner Credit Score Years of Credit History...

I need to write about Apple Inc.. please can I get all the information about history...

I need to write about Apple Inc.. please can I get all the information about history of apple inc., also I need information about bonds , investment, earning per share, stockholder's equity , I need to write about 5 pages , so need more information . all relates to apple inc.

A restaurant is about to close, but it must wait until all 8 remaining customers have...

A restaurant is about to close, but it must wait until all 8 remaining customers have left. Starting now, each customer’s remaining time in the restaurant is exponentially distributed with mean fifteen minutes. If the customers leave independently of one another, find the probability that (a) after 2 hours the restaurant is still open; (b) after 1 hour, the restaurant is still waiting on exactly 2 customers.

Question