Avoid “Garbage In, Garbage Out” with Your MI Packages

Reporting on the results of credit decision strategies is a vital function – but it’s often given less thought than other components of risk management. With the multitude of data variables available, selecting the key performance indicators relevant to the decision being made will be essential in making sure your management information packages deliver what is needed to the right people.

Leading organisations create concise MI packages targeted to a specific audience. Here are a few hints and tips:

1. Along with defining clear objectives when designing a new strategy also determine the MI required to report on the performance against objectives.
2. Make use of the RAG approach (red, amber, green) to clearly indicate results against target. Amber can be calculated based on a % tolerance to the target. This approach is clear and easy to understand.
3. Explore all data sources to optimize availability.
4. Be aware of differing data definitions across locations. One of our clients greatly improved their data availability and hence their decisioning capabilities by creating a warehouse with data from multiple products. This provided a consistent data definition, enriched the data available for each product and enabled an improved total customer approach to be applied.
5. Consider the audience before deciding on the MI metrics and number to be included.
6. Create easy to understand graphics, including thinking how the colors will appear in presentations or when printed.

Thanks to Stacey West of Fair Isaac Advisors, who contributed information for this post.