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Credit is still the core business of financial institutions. Measuring and managing credit risk, typically the most important type of risk, is one of the decisive factors for the economic and sustainable success of an institution.

Further increase in regulatory requirements in banking

The front office, back office and risk controlling functions are involved and should act in a coordinated manner. IT technology in connection with models and methodology is also of particular importance with regard to efficiency and quality goals. The regulatory requirements for the credit business, such as the EBA guidelines on lending and credit monitoring. Future of IRB, CRR III or the MaRisk amendment, have become increasingly extensive and complex in recent years. They typically lead to increased process efforts and thus reduce efficiency gains already achieved by the banks.

Mapping of important dependencies in the credit business

Our holistic advisory approach in the lending business segment enables us to take into account and map the highly relevant dependencies. The following are some examples of this.

  • In the development of credit risk measurement procedures or rating models, the integration of front and back office is essential for the quality of the result. These units operate close to the processes of data generation and therefore know the respective risks from the user perspective. 
  • When professionalising and subsequently optimising the credit processes from an end-to-end perspective, all regulatory requirements for the credit business must be taken into account according to the size and risk profile of the institution and the business segment. In addition, potential adjustments in creditworthiness assessment or rating must also be examined with a risk-oriented view in order to realise all efficiency gains. Redundancies can be minimised through technological support. The introduction of an integrated workflow tool optimises and automates the entire credit process - from the front office to the back office.

Climate risk assessment

The institutions are currently working intensively on the measurement and management of ESG risks. We are developing special scores for measuring the climate risks of borrowers, their exposures and collateral, which enable comparability in the portfolio. We integrate this assessment into credit decision-making and monitoring. In addition, we offer solutions for the analysis and integration of climate risks in relation to single-address risk parameters, such as Probability of Default (PD) and Loss Given Default (LGD).

Added value for our customers

Our network and project portfolio in Germany and Europe gives us a comprehensive overview of the market, which we use as a basis for benchmarking both national institutions under the supervision of Bafin and the Bundesbank (LSI) and major institutions under direct ECB supervision (SI). 

In our advisory services to credit and financial services institutions for the credit business, we pursue a customer-oriented, holistic 360° approach and focus in particular on innovation, efficiency enhancement and high customer value. In the table below you will find our range of services. 

We would be happy to support you in preparing for the new challenges in the lending business in the best possible way. For further information, please contact us.

Our service portfolio

Transformation credit
Evaluated options for realignment of business model, products, customers, distribution, TOM etc.

Automation of end-to-end credit processes
Holistic optimisation of entire credit process, . Workflow platform selection, digitalisation, etc. 

Regulatory requirements credit process
Implementation of LOAM, CRR, KWG, MaRisk; OSI/KWG audits; early warning systems; NPL management; limit framework, credit risk provisioning/IFRS 9  

Basel IV (CRR III) Credit
Implementation of CRR III, simulation calculations, RWA optimisations 

ESG credit
Development of ESG scorecards, integration into credit risk models and credit decision, climate stress test, etc.   

Bank management credit
Credit risk stress testing and expansion of simulation capability and advanced credit portfolio management

Credit risk modelling
Development of credit risk models (credit portfolio models/ PD, LGD, CCF/EAD models), IFRS 9 models, securitisation models etc. and all validations

Complete implementation of IRB incl. business case (governance, processes, models, IT), design and implementation of target rating map

Data analytics / artificial intelligence in credit risk
Identification and realisation of use cases with a positive business case for the application of AI/ML-based methods in processes, risk quantification, etc.

External and internal credit risk reporting 
Selection and implementation of reporting platforms, report design, data requirements catalogue and business analysis

Data management
Quality/efficiency enhancement of functional data management, end-to-end data quality management, development of dispositive data budgets

IT Credit
Introduction and customising of core banking systems for credit, standard software in credit risk controlling, selection of standard software

Law Credit
Advice on contracts, legal issues, etc. in the context of credit business

Managed services
Assumption of services within the scope of outsourcing or peak balancing

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