Insights into Effectiveness through Data Science

Credit Risk Quarterly – Q4 2023

Check out our latest Credit Risk Insights from Q4 2023! This quarter we focus on the various headwinds and tailwinds affecting the US consumer credit risk industry overall, as well as more specific trends across Credit Cards, Personal Loans/Mortgages, Auto Loans, and Student Loans.

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Credit Risk Quarterly – Q4 2023

Check out our latest Credit Risk Insights from Q4 2023! This quarter we focus on the various headwinds and tailwinds affecting the US consumer credit risk industry overall, as well as more specific trends across Credit Cards, Personal Loans/Mortgages, Auto Loans, and Student Loans.

Initial Line Assignment & Credit Line Increase Policies

A regional credit union in the US approached 2OS to aid in the implementation of its new Initial Line Assignment (ILA) and Credit Line Increase (CLI) policies. Through an initial diagnostic and an analytic deep- dive, 2OS developed new initial lines and CLI strategy to improve member engagement and profits.

Student Loan Deferrals

In our latest white paper we examine the resumption of Student Loan repayments, explore insights from Equifax Ignite data on performance expectations, and discuss how lenders can best prepare. 

Credit Risk Quarterly – Q3 2023

Check out our latest Credit Risk insights from Q3 2023! This quarter we discuss headwinds and tailwinds affecting the US consumer credit risk industry across all different asset classes, including our thoughts on rising delinquencies with increased interest rate environments, and our expectations with the resumption of student loan payments.

Money 20/20

2OS is excited to be returning to Money 20/20 next week in Las Vegas! Erol Cultu, Sharon Ovadia, Matt Cannon, and Scott Barton will representing the 2OS team. Reach out if you’ll be in town, they would love to connect.

Credit Risk Quarterly- Q2 2023

Check out our latest Credit Risk insights from Q2 2023. This quarter we focus on the headwinds and tailwinds affecting the US consumer credit risk as a whole, as well as discuss recent trends across Credit Cards, Personal Loans/Mortgages, Auto Loans, and Student Loans.

Recoveries Strategy Refresh

During the pandemic, consumer stimulus led to lower credit losses and therefore less of a strategic focus on Recoveries. As the U.S. enters a more challenging macro-economic environment characterized by inflation, interest rate increases, and resulting pressure on consumers, we are seeing losses increase back to pre-pandemic levels and even worse for some segments. Now is a perfect time to revisit Recoveries and refresh your strategic and operational approach. This paper will explore how the industry has evolved since the last economic downturn, provide an updated view of winning strategies, and highlight what is at stake for your organization.

The Small Business Data Revolution: Reshaping Lending Decisions

Over the past decade, the Small Business (SMB) lending field has seen an explosion of innovation, with groundbreaking advancements in data sources, API technology, machine learning, digital onboarding, and instant decisioning. Initially driven by larger banks, these innovations have now been embraced and implemented at scale by fintech companies. In this article, we want to take you on a journey of how the SMB lending category has transformed over time, explore the emerging ecosystem of new technologies and data sources, and discuss how executives at banks, lending institutions, and payments companies can rapidly improve upon their current SMB offerings.

Credit Risk Quarterly- Q1 2023 in Review

Check out our latest Credit Risk insights from Q1 2023, focusing on trends across various asset classes, noticeable decreases in risk levels among subprime and low-income consumers, and continued risk score warping.

Fintech Nexus 2023

2nd Order Solutions is excited to be returning to Fintech Nexus next week! Scott Barton, Dave Wasik, Erol Cultu, Chase Nielsen, Syed Raza, and Perry Keatley will be there representing the 2OS team and would love to connect. Reach out if you will be there as well!

Building a Well-Managed Collections Function

As delinquencies and Collections efforts increase across the industry, our latest white paper provides a roadmap for where the difficulties and pain points lie. We start with a framework for the root causes of complexity within Collections, provide a variety of examples, and suggest a set of important first steps to make Collections a more well- managed part of the lending lifecycle.

Identifying BIN Fraud

An international bank enlisted 2OS to help spot and stop BIN Attacks. After analyzing the client’s data, 2OS identified four new rules that were effective in picking up previously undetected attacks while also minimizing the false positive rate.

A Comparison of Modeling Preprocessing Techniques

Our latest white paper compares the performance of various data processing methods in terms of predictive performance for structured data. This paper also seeks to identify and recommend preprocessing methodologies for tree-based binary classification models, with a focus on eXtreme Gradient Boost-ing (XGBoost) models.

Fintech Meetup 2023

2OS is excited to be back in Las Vegas for Fintech Meetup 2023! Erol Cultu will be representing the 2OS team- reach out if you’re in town! He would love to connect.

Credit Trends in Brazil

2nd Order Solutions has seen a sharp rise in new credit acquisitions in Brazil amid a high interest rate environment, which has led to debt-to-income levels that are at an all-time high. This whitepaper explores the consequences of this rapid increase in debt-to-income, uncovering a concerning risk outlook ahead. In addition to deep diving into the delinquency trends, this report uncovers specific populations that have been hit the hardest and suggests what lenders should do to help mitigate the risk.

Mortgage Risk Segmentations

An international bank, worried about future rises in variable interest rates, approached 2OS to help identify the customers most at-risk within its home loans portfolio. The client wanted the 2OS team to build out a risk segmentation along with contact and offer strategies for each segment.

Credit Risk Quarterly – Q4 2022 in Review

Check out our latest Credit Risk insights from Q4 2022, focusing on trends across various asset classes, inflation’s impacts on lending, and risk score warping.

Fintech Nexus LatAm 2022

2OS will be returning to Fintech Nexus LatAm in Miami from December 13-14th! Sharon Ovadia and Dave Wasik will be there and would love to connect. Reach out if you will be there as well!

Credit Risk Quarterly – Q3 2022 in Review

This paper reviews the overall state of consumer credit, focusing on credit cards, personal loans, auto loans, student loans, and mortgages. In addition, we examine the impacts of inflation on lending, the current macroeconomic outlook, and continued observations of risk score warping.

Money 20/20

2OS is excited to be returning to Money 20/20 in a few weeks in Las Vegas! Erol Cultu, Sharon Ovadia, Dave Wasik, and Scott Barton will representing the 2OS team. Reach out if you’ll be in town, they would love to connect.

Credit Risk Quarterly – Q2 2022 in Review

This paper looks at some of the trends and insights from Q2 2022 with a focus on the increasing risk levels among recent vintages for unsecured lending products and the effects of inflation on the auto lending industry.

Structured Finance 2022

2OS is excited to be back in Las Vegas for Structured Finance 2022! Erol Cultu will be representing the 2OS team, and would love to meet up. Reach out to him if you’re going to be there as well!

Credit Line Increase Policies

A mid-sized lender in the US approached 2OS to aid in the optimization of its current credit line increase (CLI) policy. Through an initial diagnostic and an analytic deep-dive, 2OS developed several tests and new CLI programs for the client to implement in order to continue its high growth rate.

Fintech Nexus

This week is one of our favorite events of the year – LendIt USA! Scott Barton, Erol Cultu and Mara Albaugh will be there representing 2OS. Reach out if you’ll be there. We would love to meet up!

Collections Best Practices for Fintech Lenders

This paper highlights emerging trends and deep dives into the key areas Fintech leadership teams need to understand in order to create an effective default management strategy while quickly building a strong Collections practice.

Credit Risk Quarterly – Q1 2022 in Review

This paper looks at some of the trends and insights from Q1 2022 with a focus on how lenders can leverage BNPL data, how the surge in inflation is impacting lending, and how the rise in asset prices can impact your P&L with a focus on auto loans.

NADA 2022

Erol Cultu and Matt Cannon will be in Vegas this week representing 2OS at NADA 2022! They would love to meet up if you’ll be in town.

AFSA Vehicle Finance 2022

Erol Cultu and Mara Albaugh will be in Vegas this week for AFSA 2022! They would love to meet up if you’ll be in town.

RMAi 2022

Next week Erol Cultu will be in Vegas representing 2OS at the RMAi conference. Send him a message if you’ll be there. He would love to catch up.

Credit Risk Trends in the COVID Era

This paper explores whether delinquencies and losses will stay at historically low levels, or if the effects of COVID have reversed and signs of worsening are beginning to show.

Money 20/20

2OS is super excited to return to in person conferences starting with Money2020. Erol Cultu will be there representing 2OS. Reach out if you’ll be in town. He would love to connect.

Structured Finance 2021

2OS is very excited to be attending Structured Finance 2021 next week. Erol Cultu will be representing the 2OS team talking all things capital markets and collections practices. Reach out if you will also be attending, he would love to meet up.

Stopping Fraud with Data Analytics

A large Latin American Fintech approached 2OS with an urgent fraud problem that needed diagnosis. We were able to not only deal with the timely attack, but also identified new areas of weakness and implemented stronger defenses.

2OS Approach to Credit Due Diligences

PE firms often rely on 2OS’s expertise in the lending space to advise them understanding outstanding loan portfolios in M&A opportunities.

Using Shapley Values to Enable Machine Learning-driven Adverse Action

This paper lays out best practices we have developed to better leverage Shapley values in enabling ML model deployment in credit issuance. Through a variety of analyses and comparisons to existing Adverse Action methodology, we demonstrate how Shapley values can be used to satisfy the Adverse Action requirements and break down a common barrier that lenders face in adopting more sophisticated ML models.

Cutting Edge Credit Risk Modeling

2OS worked with a major international bank to redesign their machine learning model responsible for predicting risk on delinquent personal loan accounts.

Getting ready for CFPB Fair Debt Collection Practices Rules

Written in partnership with BCG, this paper examines the changes to the Consumer Financial Protection Bureau (CFPB) regulations around Debt Collection, and offers some tips on the implications they will have on the industry both over the next year and years to come.

Collections Strategy

A client needed help increasing enrollment in their deferral/payment programs. so our team helped them review their application process and ran analytics on the increased value from the enrollment strategy.

Fraud Triage in the COVID-19 Crisis

Working with our consulting partners at Boston Consulting Group, this paper deep dives into how COVID-19 related shifts in consumer behavior and purchasing patterns have exposed new fraud vulnerabilities and what lenders must do to protect themselves in the current economic environment.

Unsecured Debt Deferral: The Next Set of Challenges

Written with our colleagues at BCG, this paper explores how unsecured loan delinquencies are down and call centers are overstaffed during the worst unemployment and public health crisis of our lifetime; and deep dives into managing the loan deferral programs that are keeping millions of customers current on their loans. 

Credit Risk Triage in the COVID-19 Crisis

Co-authored by our partners at Boston Consulting Group, this paper focuses on recommendations for making credit and lending decisions at acquisitions stage and for existing customers, during an unprecedented time in financial services.

Winning in the Next Era of Collections

Written with our partners at BCG, this paper provides six specific recommendations on how lenders of all types and sizes should navigate through this difficult time.

Valuations Modeling

2OS worked with a client to build them an NPV model to help re-evaluate their credit line increase strategy across all of their products.

2OS Approach to Acquisition Stage Underwriting

Having worked with 100’s of issuers, 2OS has proven strategies for implementing new credit policies that attract new customers, while stil maintaining manageable risk levels.