"The True Classic of Consumer Finance" was translated from the 2nd edition of "Managing a Consumer Lending Business". David Lawrence David Lawrence and Arlene Solomon, the authors, summed up their 35-year financial practical experience and told us all aspects of consumer finance. It is a good book that sees both the forest and the trees.
Zhang Yu, a translator, is a senior risk-related practitioner with a background such as Capital One, which makes us read this book in one go, without any defects. This book was recommended by our company CRO, and many bosses also made a preface for this book. In addition, this book just came out, the original was published in 13 years and translated in October 17.
therefore, you can read boldly with confidence.
this article has been updated on wechat account, welcome to pay attention to it: the real story of consumer finance
preface of the author
The content of this book covers the whole process of credit business:
the whole link of credit cycle, including product planning, customer acquisition, account management, collection and so on.
The core concepts of credit management, including product profit analysis, product management information and corporate organizational structure management, are introduced separately.
? Classic credit cases are based on mail marketing, mortgage, car loan and credit card loan, with management principles and operational skills.
essence of consumer credit
"Consumer credit business is not complicated, but its commercial essence is only to raise money at low interest rate and lend at high interest rate, so as to earn interest margin profits"
Consumer credit cycle
Consumer credit management
Core concept of "data-driven" and "five principles" of consumer finance management
1. Risk-return balance principle: reduce risks and losses.
2. business planning principle of taking precautions: good customer acquisition and account management planning can effectively reduce the problems of late collection and write-off.
3. Probabilistic management principle: Credit business is characterized by large business volume and small items. It is necessary to predict the risk probability through statistical models and optimize credit approval.
4. management principle of business indicator system: a reasonable indicator system can reflect the business status and development trend, which is helpful to quickly locate problems and take timely measures.
5. risk management principle with clear rights and responsibilities: everyone can be a risk manager or a special person can be responsible for the risk inspection and coordination of the whole organization. No matter what kind of management mode, first of all, the company must have experts who really understand wind pipes, and secondly, it is necessary to clarify the risk rights and responsibilities of each department and each rank.
consumer credit market in the United States? VS China
This book is mainly based on the consumer credit market and cases in the United States, some of which may not be applicable in China, but there are still many places worth learning from.
1. Customer acquisition method: main mail customers in the United States, especially credit card users, are promoted on the main line in China
2. Mortgage business: different monitoring policies
3. Credit coverage:
? △? By the end of 16 years, the central bank's credit data covered 88 million people, accounting for 64%, of which only 38 million had credit records, accounting for 28%. Moreover, it is difficult to obtain credit data at historical time, which greatly increases the difficulty for domestic financial institutions to query credit data.
? △? The three foreign credit bureaus can anonymously provide users' credit data at the historical time permitted by law, which is very perfect, covering nearly 85% of the population in the United States, and the data among the three giants has been shared.
4. Credit card: The penetration rate of credit cards in the United States is extremely high, and the repayment policy is relatively loose (for example, the minimum repayment ratio is 3%-5%, and that in China is 1%).
5. Development course:
△? The consumption of gold in the United States developed after World War II (September 1939-September 1945). Due to the post-war population expansion, the change of consumption concept and the increase of per capita disposable income, the market scale increased from $25 billion in 195 to $12.2 trillion by the end of 15 years. The improvement of the credit information system came into being, connecting various data such as credit data, consumption data and social data in series.
△ ? China first put forward the concept of consumer finance in 27. In 15 years, the market scale has surged to 19 trillion. According to the report of iResearch, the figure will be 41 trillion yuan by the end of 19 years. The market scale has great potential.
list of knowledge points-incomplete statistics
1. product planning:
product types (installment and revolving credit, direct sales and consumption scenarios, mortgage and credit)
target customers (credit cards, for example, are used by customers to borrow money, Or just as a means of payment)
Understand competitors (competitive product research)
Pay attention to the changes of external environment (economy, law and culture)
2. Get customers: traffic
Get customers (such as cross-selling, Internet, channel acquisition and asset purchase)
Marketing response model (such as logistic regression) < p Based on demographic data, etc.)
Refuse to infer (must the rejected customers be bad customers, and how to restore the repayment performance of these customers)
KS curve (reasonable threshold A card ≥ 3 points, B card ≥ 45 points)
SWAP analysis (in the face of various scoring models, How to use it)
Calculation of loan loss amount of revolving line products (not yet understood)
4. Account management: maintain high-quality customers and enhance their stickiness, and limit poor-quality customers
Behavior score (B card, based on customer account performance and other data)
Daily transaction management (payment, appeal, etc.)
Cost management (operating cost)
.
focus the collection work on the account that is the least likely to repay!
Be the first person to make a collection call before the customer sets the repayment order!
collection score (C card, which identifies high-risk accounts in early overdue accounts based on customer's historical repayment performance and demographic information)
risk rolling rate accounting (note LAG&; Coin)
collection operation curve+collection repayment circuit diagram
6. product profit analysis
four granularity:
level 1: the income, cost and profit of all consumer credit products are integrated, and comprehensive consideration
level 2: the same as above, and further consideration by products
level 3: consideration based on the whole life cycle of each product < Consider each product according to the dimensions of account or sub-product, source, region, etc.
Some concepts-based on credit market
Sub-prime loan: granting loans to customers with poor credit and high risks
Mortgage foreclosure: for mortgages that cannot be repaid normally, it is necessary to take foreclosure measures and reduce losses by handling real estate. For example, the borrower sells the property himself and repays the bank loan with the proceeds.
second mortgage: apply for a loan again based on the net value of the house mortgage (the value of the house mortgage-the balance of the original loan)
risk premium: investors demand higher income to offset higher risks, which is the compensation for investors to bear risks for themselves.
repair of lost contact: find new contact information for overdue customers who can't be contacted by telephone and mailing address
write-off: write off all kinds of receivables that are determined to be irrecoverable, exclude them from the income statement, and transfer loans on the balance sheet to off-balance sheet accounting. For example, customers with overdue days of 9+ are included in the write-off.
collection: after the loss of the account is confirmed and written off, collection measures are taken, such as outsourcing the written-off account to a collection agency at a certain fee standard.
Interesting thing
In the United States, if the credit is refused, you need to inform the customer and list the clear reasons for the refusal?
what's the difference between application scoring and behavior scoring?
what does a story-telling report look like?
......
I want to say a little more.
"I'm so angry that I don't want to write books, but I'm so glad that I don't want to give people characters." I said don't write when I'm angry, because impulse is the devil, and don't promise to give things to others when I'm happy, because you may not be able to do it when you come to your senses. This note is a promise of my own. I made it when I was happy, and it was very difficult to hatch.