"The Real Classic of Consumer Finance" is translated from the second edition of "Managing Consumer Loan Business". David Lawrence, David Lawrence and Arlene Solomon summed up their 35-year financial experience and told us all aspects of consumer finance. This is a good book that sees both the forest and the trees.
Translator Zhang Yu is a senior risk-related practitioner with a background such as Capital One. Let's read this book in one breath without any flaws. This book was recommended by our company CRO, and many bosses also prefaced it. In addition, this book was published in 13 and translated in 17 and 10.
Therefore, you can read boldly with confidence.
This article has been updated on WeChat account, welcome to pay attention to: the truth of consumer finance.
The author's preface
This book covers the whole process of credit business:
The whole process of credit cycle includes product planning, customer acquisition, account management and collection.
This paper introduces the core concepts of credit management, including product profit analysis, product management information and company organizational structure management.
? Classic credit cases are based on mail marketing, mortgage loan, car loan and credit card loan, combined with management principles and operational skills.
The essence of consumer credit
"The consumer credit business is not complicated, and its commercial essence is only low-interest financing and high-interest lending, thus earning interest margin profits."
Consumer credit cycle
Consumer credit management
The core concept is "data-driven" and "five principles" of consumer finance management.
1. principle of risk-return balance: reducing risks and losses is not the ultimate goal, but maximizing profits.
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 number of pieces. It is necessary to predict risk probability through statistical model and optimize credit approval.
4. Management principle of business indicator system: A reasonable indicator system can reflect the business status and development trend, and help to quickly locate problems and take timely measures.
5. Risk management principle with clear rights and responsibilities: Everyone can be a risk manager, or someone 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 should have experts who really understand wind pipes, and secondly, it should make clear the risk rights and responsibilities of various departments and ranks.
American consumer credit market? VS China
This book mainly explains 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: the main mail customers in the United States, especially credit card users, are promoted on the main line of China.
2. Different regulatory policies.
3. Credit coverage:
? △? By the end of 16, the central bank's credit data covered 880 million people, accounting for 64%, of which only 380 million people had credit records, accounting for 28%. Moreover, it is difficult to obtain credit data at historical time points, which greatly increases the difficulty for domestic financial institutions to query credit data.
? △? The three major foreign credit reporting agencies can provide users' credit data anonymously at the historical time allowed 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 credit card penetration rate in the United States is extremely high, and the repayment policy is relatively loose (for example, the minimum repayment ratio is 3%-5%, and it is 65,438+00% in China).
5. Development process:
△ ? Gold consumption in the United States developed after World War II (1939.09- 1945.09). Due to the post-war population expansion, the change of consumption concept and the increase of per capita disposable income, the market scale has developed from $25 billion in 1950 to $2.2 trillion by the end of 2005. 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 2007. 15 years, the market scale surged to 19 trillion. According to the report of iResearch, the figure at the end of 19 will be 4 1 trillion yuan. The market scale has great potential.
List of Knowledge Points-Incomplete Statistics
1. product planning:
Product type (installment and revolving credit, direct sales and consumption scenarios, mortgage and credit)
Target customers (for example, customers whose credit cards are used to borrow money or just as a means of payment)
Know your competitors (competitive product research)
Pay attention to the changes of external environment (economy, law, culture)
2. Customer acquisition: traffic
Customer acquisition methods (such as cross-selling, Internet, channel acquisition, asset purchase)
Marketing response model (such as logistic regression)
3. Account application: screening of application customers.
Application score (one card, 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 ≥ 30 points, B card ≥ 45 points)
Exchange analysis (how to use it in the face of multiple scoring modes)
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 inferior customers.
Behavior score (B card, based on customer account performance and other data)
Daily transaction management (payment, claim, etc.). )
Cost management (operating costs)
5. Collection management: management of high-risk accounts.
The core of the collection: the intervention of "people"!
Focus the collection work on the account that is the least likely to repay!
Be the first person to make a dunning call before the customer places a repayment order!
Collection score (C card, which identifies high-risk accounts in early overdue accounts according to customers' historical repayment performance and demographic information)
Risk rolling rate accounting (attention lag&; Coin)
Collection operation curve+collection repayment circuit diagram
6. Product profit analysis
Four particle sizes:
Grade 1: comprehensively consider the income, cost and profit of all consumer credit products.
Grade 2: same as above, and then consider by product.
Level 3: Every product is considered based on its whole life cycle.
The fourth layer: in each product life cycle stage, consider each product according to the dimensions of account or sub-product, source, region and so on.
Some concepts-based on the credit market
Subprime loan: Loans are granted to customers with poor credit and high risks.
Mortgage redemption: For the mortgage that cannot be paid normally, it is necessary to take redemption measures to reduce losses by dealing with the property. For example, borrowers sell their own properties and use the proceeds to repay bank loans.
Secondary mortgage: apply for a loan again according to the net mortgage value (mortgage value-original loan balance).
Risk premium: investors demand higher returns to offset higher risks, which is the compensation for investors to bear risks themselves.
Repair of lost contact: find new contact information for overdue customers whose telephone and mailing address can't be contacted.
Write-off: Write off all kinds of accounts receivable that have been 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 whose overdue days are 90+ are included in the write-off scope.
Collection: Collection measures taken after the account is reported lost and written off, such as outsourcing the written-off account to a collection agency at a certain fee standard.
Interesting thing
In the United States, if you refuse to grant credit, you need to inform the customer and list the clear reasons for refusal?
What's the difference between application scoring and behavior scoring?
What is the story-telling report like?
......
Want to say a little more
"I'm angry if I don't give people books, and I'm happy if I don't give them herringbone." It means not to write when you are angry, because impulse is the devil. When I am happy, I won't promise to give something to others, because you may not be able to do it after you figure it out. This note is my own promise. It's hard to hatch when you're happy.