Russian consumer credit risk requests soar by 40% as predictive tech prioritised

31 July 2013

The National Bureau of Credit Histories (NBKI), Russia’s largest domestic credit bureau, has revealed that Russian banks have dramatically increased their use of credit scores and credit bureau data in risk management solutions this year. The first half of 2013 saw a total increase of over 40% in the number of credit reports being ordered compared to the same period last year, illustrating the rapid development of sophisticated retail banking technology in the country.

"Russian banks and microfinance institutions are demonstrating a responsible approach to risk management,” explained NBKI chief executive, Alexander Vikulin. “During the first half of 2013, credit grantors ordered 41% more credit reports than in the same period last year, and twice as many as in the first half of 2011."

According to Evgeni Shtemanetyan, who directs Fico’s operations in Russia and who now supply six of the country’s top 10 banks with credit scoring information according to NBKI, the Russian retail lending market is maturing as the country’s banks increasingly adopt more advanced risk management systems. “We are seeing increased interest across the banking market for consulting services and software solutions for application processing, debt collection, customer management and fraud protection,” he said.

As an example of he cites Tinkoff Credit Systems Bank which used the Fico Scores lending risk software during the crisis of 2008-2009 to predictive which consumers could pay loans back and which were unlikely to do so. According to Eugene Ivashkevich, the risk management director at the bank: “At the time our retail client base was very small, and we had limited historical data on customer behaviour. As a result, the effectiveness of our own internal rating models reduced during the crisis. We tested Fico Scores and found that it improved the quality and stability of our systems. Thanks to them the bank preserved the quality of its credit portfolio and implemented its credit plans even in difficult market conditions.”

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