Loan Decision Solution for Loan Origination. Scorto TM. - Sensible - Tailored - Vigorous. Scorto Loan Decision. Scorto Loan Manager SME

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1 Scorto Loan Decision - Sensible - Tailored - Vigorous Scorto Loan Manager SME Scorto Ample Collection Scorto Behavia Scorto Fraud Barrier Scorto Model Maestro Scorto Supervisor Scorto TM Loan Decision Solution for Loan Origination

2 2 Scorto Solution for Loan Origination Scorto Loan Decision is a decision management and application processing system for loan origination that allows banks to manage business rules and processes related to: Consumer lending; Credit cards; Internet lending; Automobile lending; Mortgage lending. The key tasks being performed by Scorto Loan Decision are decision-making and borrower evaluation process automation and flexible management of the lender s credit rules, credit policies and scoring models. Scorto Loan Decision Business Rules and Business Processes management system all in one package. Scorto Loan Decision contains all the tools banks need to evaluate the borrower and make a decisions whether loans should be granted. These functionalities range from POS workplaces to tools for developing scoring and decision-making strategies. Business Tasks Key Features Automation of decision-making and Easy integration with any core or borrower evaluation cycle. backend system, external front office or Remote access for distributed sales data source. points. Business user oriented software, no IT Processing of requests from remote sales involvement required. points. Comprehensive functionality for any Decision strategy adjustment for each type of lending and business process: credit product. from credit cards to mortgages and Scoring model development and beyond. management. Credit portfolio monitoring.

3 3 Functional Components The standard Scorto solution comprises several functional components, each responsible for a particular business task. The Scorto solution s main components are: System management and controlling module - Scorto Loan Decision Master Any change or improvement made in the system (i.e. a new scoring model, new decisionmaking strategy, new credit product etc.) first appears in the Scorto Loan Decision Master interface. Only after their approval by an authorized person, they go live. The application also allows managing the process of gradual integration of system changes into the workflow by testing the changes made on a limited amount of applications and monitoring the performance (champion / challenger). Administrative module Scorto Admin The main function of this module is user role management and access rights administration. The Scorto Admin interface allows creating and managing user accounts, granting access rights, blocking / unblocking user accounts and monitoring user activity (through system logs) Specialized core Scorto Quest Logic This is the decisioning engine developed by Scorto specifically for the decision-making & credit scoring systems. It contains a number of analytical tools and features that can be used to score, rate and re-evaluate borrowers. To suit borrower evaluation specifics best, the server allows setting individual evaluation processes for different products, portfolio segments or business lines, and supports several types of ratings quantitative and qualitative. Along with rich evaluation capabilities, Scorto Quest Logic provides for impressive productivity, with clustering/scalability capabilities.

4 4 Decision-making strategy development module Scorto Strategy Maven This is a specialized application for building comprehensive decision-making algorithms in your lending business. The application can be used to set the borrower s evaluation or decision-making rules for granting loans; to calculate indicators and ratios for each particular borrower; or to find the most effective actions to fix delinquencies etc. Scorto Strategy Maven and Scorto Quest Logic jointly constitute the Business Rules and Business Processes management system. Front-office Scorto Dimension This is a front-office toolkit for credit experts, designed to work with the decision-making system (through the decisioning engine). Scorto front-office is a web-based solution, and it is accessible from any location through the internet browser, and allows setting up an unlimited amount of different гser roles (i.e. Credit Expert, Risk Manager, Head of the Department etc.) and differentiating their visibility levels, access rights and available functionality. Its main role is to provide the information input and output interface along with basic reporting functionality. Several optional components solving specific business tasks are also available with the basic Scorto loan origination solution: Risk management and Basel II reporting Scorto Supervisor This is a standalone application that easily connects to the Scorto Loan Decision database and provides advanced reporting functionality. The module enables creating standard scoring reports for evaluating the efficiency and adequacy of the loan origination system s performance, as well as a number of other additional reports. The reporting module generates the following types of reports: Scorecard reports provide statistical data on scoring models adequacy, the extent to which subjective decisions have an influence, and the general scoring indicators; Portfolio reports the bulk of the information in these reports is taken from the back-office solution. They allow evaluating the current quality of the credit portfolio, as well as the dynamic changes that take place in the portfolio from the point of view of the scoring system; Operational reports these reports allow evaluating the operational efficiency with which the decision-making server is used. They also enable the user to identify and size up trends and tendencies in a certain aspect of the scoring system s performance. In-house scorecard development Scorto Model Maestro. This tool provides advanced functionality for custom scoring model creation and analysis, based on internal historical data, external data, or expert data.

5 5 Functionality Overview Scorto Loan Decision functionality covers the entire process of loan origination - from data input via a credit officer's workplace or any other data source, through data analysis, segmentation, comparison to different indicators or credit bureau data, setting different business rules and scorecards, all the way to making the final decision. Data Input With Scorto Loan Decision, data input is available from the credit experts workplaces as well as from any external databases. Credit experts can use either Scorto Dimension workplaces to input application data to the system, or any third-party front-end solution, that the Scorto team can integrate with your Loan Decision solution. User workplaces in Scorto Dimension are easily adjustable by the Scorto Dimension Forms Designer tool. It allows a business user to easily design the application form and adjust a user workplace without IT staff involvement. Data Processing & Analysis With Scorto Strategy Maven visual editor, any authorized business user can easily develop an automated data processing and borrower assessment algorithm. This algorithm can include: Data comparison, verification and checks (to parameter standard values, average values or values provided by a third-party (i.e. Credit Bureau)); User defined coefficient and ratio calculations; Data segmentation in accordance with user-defined business rules and assigning specific actions to each segment; Scoring model (either in-house or generic) that can be extended with credit rules, verifications and checks, calculations, logical conditions and so on; Application and data routing between different system users. The comprehensive borrower assessment algorithm (scoring or decision-making strategy) is created as a visual model and can be easily configured by dragging pre-defined strategy nodes (steps of the workflow) from the Nodes Container area into the visual editor working area as it is shown on the screenshot.

6 6 Each node s properties (like input and output variables, calculation formula etc.) can also be configured. The nodes are connected in a logical sequence for strategy processing. The connections are displayed in the visual editor. The arrows that graphically represent the connections between the nodes are color-coded depending on the type of the selected outlet (i.e. Next blue arrow; No red arrow; Reject brown arrow; Yes green arrow; Submit gray arrow) Scoring strategies are uploaded to the Scorto Quest Logic server with the help of the Scorto Loan Decision Master tool to ensure that the changes made are correct and effective. With Scorto Loan Decision Master a responsible officer can run the updated strategies in the challenger/champion mode and monitor their performance. This allows the banking institution to analyze loan applications in real time in accordance with defined rules, models, verifications and calculations. The server not only performs automatic scoring calculations, but also ensures that loan applications are processed by corresponding credit experts in the correct sequence while Scorto Dimension ensures the correct sequence for processing loan applications. Loan-related documents can be generated and printed automatically from a user s workplace when the application processing is completed. Document templates can be easily adjusted by an authorized system user with the help of Scorto Dimension Forms Designer. Scorecard Integration Scorecards are developed using the specialized Scorto Model Maestro module. Scoring models can be immediately deployed on the decision-making server or used as elements within the comprehensive borrower assessment algorithm. Scorto also provides custom scorecard development, and generic scorecard provision and adaptation services to the customers that have no need to develop scorecards themselves on a regular basis. In case when a hosted model is used, Scorto can provide its services for model adaptation for the solution, or provide the tools to allow Customer s staff to adapt it in-house.

7 7 Roles & Responsibilities Management. Decision Override Possibility Scorto Loan Decision solution allows creating as many user roles as it is required by organizations business peculiarities. User workplaces can be adjusted in accordance with user roles, making different functionality and visibility levels available to users with different roles within organization. Access rights can be easily configured with the help of the Scorto Admin Component. Differentiated user roles are also used for building scoring strategies which involve routing an application from one organization s employee to another. In these cases workplaces of different users can be put into a strategy as its nodes in the required sequence. The process of decision override can be also automated with Scorto Strategy Maven. Designing a decision-making strategy with Scorto solution, the user can set business rules, specifying particular conditions, which initiate decision override. On meeting this condition the application is automatically routed to the responsible officer s workplace, Scorto Strategy Maven allows validating and changing business rules as often as needed. Monitoring & Reporting Scorto web-based workplaces include reporting capabilities with differentiated access rights. This means that users with different roles can have access to different reports. The final set of available reports is to be adjusted by Scorto exactly as it is required by the Customer. Typical reports provided within Scorto workplaces include but are not limited to: Total number of processed applications for a certain timeframe (Day / Week / Month etc.); Total number of applications segmented by Loan type / Member type / Collateral type / County of Application; Number of approvals / rejections segmented by Loan type / Member type / Collateral type / County of Application; Number of rejected applications by reasons of rejection etc. More comprehensive reporting functionality is available in the Scorto specialized reporting tool - Scorto Supervisor. This a component designed for interactive data analysis using OLAP technology. It also has a built-in report constructor, which can be used in all the areas that require consolidated data analysis, portfolio analysis and so on.

8 8 About Scorto Decision Management Solutions The Scorto solution line for credit scoring and decision management is designed to cover the entire decision making process in the lending business from loan origination to debt management and to fit any credit product type, from credit cards to mortgages and more. Current Scorto product offering includes: Consumer lending; Application scoring; Loan origination; Credit cards; Behavioral scoring; Portfolio management; Internet lending; Collection scoring; Debt collection. Automobile lending; Fraud scoring. Mortgage lending. All Scorto solutions are totally compatible with each other and have their major strengths in common: Unique combination of high technology and low cost of ownership; Business user-oriented approach that results in extreme ease of use, adaptation and maintenance; Ability to easily customize, localize and tailor solutions to specific customer s needs; Efficiency not only in established economies, but also in fast growing and emerging markets; Full cycle coverage: from loan origination to collection, from consumer to SME loans, from model development to deployment. Today, Scorto customers are world renowned banking institutions, such as Mercedes Benz Bank (the Daimler Group), Astra Bank (Alpha Group), OTP Bank, MTBank (the Laiki Group), Bank Turan Alem Bank (the BTA Group), InvestCapitalbank and many more. Scorto's products are so sensible and vigorous that the list is constantly growing.