Extended agreement sees Kuwaiti bank implement credit scoring analytics to drive behavioral score cards and build risk models across its branches
Boubyan Bank, a Kuwait-based Islamic bank, has taken a vital step in executing automated procedures to assess credit risk and exercise fast approvals for its customers by extending a partnership with SAS, the leader in analytics.
Considered the fastest growing Islamic bank in Kuwait, Boubyan Bank will utilize SAS Enterprise Miner across its branches to implement risk models and allocate regulatory capital for expected losses.
“The introduction of IFRS9 in 2018 will require banks to be further prepared for expected loses, updating the way they record and anticipate changes in their asset credit quality. The agile and forward thinking approach adopted by Boubyan Bank has provided SAS with the best workplace to formulate this mutual partnership and ensure the bank is in a position to comply with new regulation whilst saving their team time and effort through efficient automation,” said Marcel Yammine, General Manager, Gulf & Emerging Markets at SAS.
Having previously used SAS Enterprise Guide for risk reporting, Boubyan Bank now wants to fast track its credit decision making process by adopting SAS Enterprise Miner, SAS’ flagship data mining tool, to build the portfolio scorecard model to estimate capital requirements for loans, assign debt provisions, set credit limits, pre-authorize accounts, and formulate collection strategies. The three year agreement will also enable the bank to use this tool to build loan originations and marketing models.
Mrs. Nahed Al-Awadhi, Deputy General Manager Risk Management Division, Boubyan Bank said: “Our aim is to recognise expected losses as accurately and timely as possible, and our partnership with SAS provides a comprehensive automated platform to credit score loans and assess risks. The adoption of further sophisticated SAS solutions will help our team reduce processing time, minimize losses, and provide faster decision-making capabilities.”
Boubyan Bank will be able to generate Probability of Default (PD) estimates on a monthly basis, which will assist the bank in understanding risk dynamics influenced by varying factors across its portfolio.
By adopting SAS Enterprise Miner, Boubyan Bank will be able to develop skills that increase the bank’s knowledge on modelling capabilities and allow it to build other risk models such as application scorecards for loan underwriting and collections scorecards for streamlining the collection process.
Strengthening the partnership between the two parties, Boubyan Bank recently participated in a panel discussion during the SAS Kuwait FSI Forum that focused on how to achieve and apply large-scale decision automation. The session explored organizational cultural barriers that need to overcome for entities to achieve automated large scale decision making, apply automation of customer scoring and provide faster decision-making.