CRIF has developed both a methodology and operational solution, originally tailored to the Italian market, applying a Risk-Based Pricing approach to retail credit.
The RBP model is a natural extension of an approve-decline model, and translates the customer rating into a loan offer (loan term, rate, LTV) which is able to guarantee the bank adequate returns.
Incorporated into the bank's operating framework, the RBP model is the ideal support for its lending strategies, combining profit targets with traditional risk management policies.
The RBP model offers significant advantages, including:
- consistency with risk-control policies
- profitability assessment of existing loans and during loan disbursement
- low impact on IT systems
- use of all current available information