Credit Scorecard Business Requirements

From Open Risk Manual

Definition

Credit Scorecard Business Requirements is the set of objectives and constraints set by an organization in the context of developing a Credit Scorecard.

Indicatively such requirements may specify:

Selecting the type of scorecard

There is a large variety of possible credit scorecards. Selecting the right type requires identifying the concrete needs of the project in terms of abilities and functionality but also the practicalities of implementation (availability of data, computer systems, human expertise, degree of automation). Some key decision points that are relevant are as follows:

Availability of Data

Statistical Models have minimum requirements on data availability and Data Quality. In the absence of available data (or for other reasons) one may opt instead for more judgemental or Expert Based Models.

Regulatory Context

Credit Scorecards used by regulated financial institutions must comply with the requirements of all relevant regulatory bodies (those applicable in a given jurisdiction). This may place constraints on data requirements, model explainability etc.

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