Volvo Financial Services and CRIF redesign business customer onboarding for industrial and commercial vehicle financing

"Working with CRIF has ensured full compliance with the regulatory framework, and has given us access to the know-how of expert financial-economic analysts, as well as the application of a rigorous process for the development and validation of statistical models.”

CLIENT: Volvo Financial Services in Italy, part of the Volvo Group.

NEEDS: Faced with continuing deterioration of the Italian automotive market and, after serious discussions with the Bank of Italy, the need to adopt a rating system based on predictive statistical models had emerged along with needing an advanced engine for the assessment of credit applications while maximizing use of both internal and external data.

SOLUTION:

  • Redesign the credit process: from credit information to analytics, with the involvement of CRIF's risk management and credit process consultancy services;
  • The adoption of additional services integrated with Volvo's platforms which leveraged SprintBusiness 2.0, CRIF's Cloud solution for business lending and onboarding, which has been available on the market for over 15 years and is used by 300 Italian banks and financial institutions. Sprint Business 2.0 provides a 360° view of the company (from micro-companies to SMEs) in just a few seconds. The system integrates over 20 databases, using original and innovative logic and according to the institution’s credit strategies: company profile information, the institution’s financial data, information on credit behavior and on the characteristics of the main people holding management positions in the company;
  • Critical to the success of Volvo's solution were also the contribution of the CRIF Rating Agency,  CRIF's credit reporting system, EURISC, and CRIF Academy training.

 

RESULTS:  All aspects of the customer assessment and monitoring process were re-engineered and standardized along with obtaining an objective and reliable internal rating system.

“The assessment carried out together with CRIF consultants has resulted in a real cultural change. The support of CRIF training specialists has been instrumental in the transition from a subjective evaluation to an automated assessment  of the customer. CRIF provided a fast time-to-market, using a predictive and objective tool. As a result we have increased awareness in the decision-making process.

Thanks to CRIF, the discriminatory power of the Volvo rating system has improved greatly, and if we compare the loan approval ratings from the last quarter of 2013 with the first, we see a reduction in the higher- risk rating class 'C', and a simultaneous increase in the lower-risk rating class 'A'.

While in the first quarter of 2013, before the implementation of the Sprint Business 2.0 solution, the higher-risk rating class 'C' accounted for 48% of new loan applications. During the last quarter of 2013, after implementation of the Sprint Business 2.0 solution, this percentage dropped to 30% with a considerable shift in the lower-risk rating class 'A' (from 13% to 30%). Being  prepared  to  change  and  challenge  one's  convictions is  difficult  and  requires courage, but history has shown that great ideas have been realized by those who had the ability to take chances.  Together with CRIF, we were able to change, and now we can only grow further and reach new heights."

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