Role
Credit analyst
How long is the road from application to decision - and how much of that time is waiting for documents? Usually most of it, and usually nobody separates the two.
Intro call
Four questions we would start with
How long is the road from application to decision?
And what part of that time is analysis, and what part waiting for documents nobody chased.
What do you not know about a client's situation until the financial statements arrive?
If you rely on data several months old, the decision concerns a company that may have changed in the meantime.
What happens when a client's situation worsens after the financing is granted?
If you find out at the next set of statements, the response comes several months late.
Where does the reasoning behind a decision go?
If it goes into a note in the file, then at a portfolio review nobody will reconstruct what the decision rested on.
We take over the assembling and the calculating, you keep the credit decision
Assembling documents, calculating ratios, preparing the material and monitoring signals can be taken off the desk. Assessing creditworthiness and deciding on financing stay with a person and with the committee.
- Gaps in the documentation are pointed out at the start. - The client learns about them when the application is filed, not in the middle of the analysis.
- The ratios calculate themselves. - The analyst assesses the situation instead of retyping line items from the statements into a spreadsheet.
- A signal that things are worsening comes earlier than the statements. - Late payments, changes in the registers and the behaviour of the account give a picture earlier than the annual documents.
Scope
What can be taken off credit analysis
Twenty-one example tasks. Each one has a human approval point. Below is a selection, and the scope we fit to your credit policy.
Assembling the documents
- The list of documents required for the type of financing
- Pointing out gaps once the application is filed
- A reminder to the client about a missing document
- Reading the data out of the financial statements (verification: the analyst)
- A signal when a document is older than allowed
Analysing the financial situation
- Calculating the ratios under the agreed methodology
- A comparison across reporting periods
- Pointing out items that depart from the industry (assessment: the analyst)
- Register data on liabilities and arrears
Collateral
- A register of proposed collateral with valuations
- Checking existing charges over the collateral
- Cover against the financing amount
- Dates when collateral has to be renewed
The decision and its terms
- A draft of the material for the committee (content: the analyst)
- Recording the reasoning for the decision and its terms (decision: the committee)
- A summary of decisions in similar cases
- The documents needed to release the financing
Monitoring after approval
- Dates for statements and covenant terms
- A signal when a repayment is late
- A signal when a register entry about the client changes
- A summary of clients showing signs of deterioration (assessment: the analyst)
A day's work
Today
- You discover gaps in the documentation one by one, during the analysis
- You retype data from the statements into a spreadsheet
- You calculate the ratios by hand, separately for each period
- Assembling the material for the committee takes several days
- You find out a client's situation has worsened when the statements arrive
- You reconstruct the reasoning behind old decisions from the files
With AI assistance
- Gaps are pointed out in the first days and the client gets a reminder
- The data from the statements is read out, you verify it
- The ratios and the comparison periods are calculated
- The material for the committee has a draft, you supply the judgement
- Signals of deterioration arrive before the statements
- The reasoning for the decision is recorded and available
- Time to decision
fewer weeks lost on assembling
gaps are pointed out at the start
- Complete analysis
fewer decisions taken on part of the picture
register data complements the statements
- Portfolio quality
an earlier response when a situation worsens
signals arrive before the annual documents
- Early signs of deterioration
fewer cases going into hard collections
late payments and register changes are monitored
We start with assembling the documents, because that is where most time is lost with no analytical value at all.
- Step 1
Gaps and reminders
The list of required documents, the gaps pointed out, reminders to the client.
- Step 2
Reading the statements and calculating the ratios
The data read out and verified, the ratios calculated under the methodology.
- Step 3
Material for the committee
A draft with the summaries, and the reasoning for the decision recorded.
- Step 4
Monitoring after approval
Signals of deterioration and contractual dates. Last, because it needs the portfolio to be in order.
Common questions
Questions that come up at the first meeting
How is this different from collections and receivables control?
There the subject is recovering a receivable already due. Here it is judging whether to grant the financing at all, and monitoring the situation before a problem appears. Monitoring done well after financing is granted reduces the number of cases that reach collections.
Does this mean fewer analysts are needed?
No, and in this area the answer is the strongest of all: the credit decision has to belong to a person, because that is what the classification described below requires. We take over assembling documents and calculating ratios, which is what takes up most of the road from application to committee. The analyst assesses the client's situation instead of retyping statements.
Does this fall under the AI Act?
Yes, and this is one of the areas named expressly. Assessing the creditworthiness of individuals is a high-risk use, which means obligations on human oversight, data quality, documentation and explainability.
Still have a question that is not here? Book a call
Next step
What part of the road from application to decision is waiting for documents in your company?
We will show you what credit analysis looks like when gaps are pointed out at the start and the material for the committee arrives calculated.