Systar - US ACH Credit Risk Decisioning
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Credit Risk Decisioning for ACH The Challenge Financial institutions process ACH payments to provide a valued service to customers. However, it creates a significant credit risk for banks as they typically commit to these transactions before customer funding. In addition, credit decisions on customer ACH files can have serious consequences - denying a transaction that could have been approved is potentially devastating to a corporate customer, while approving one that should be denied is costly to the bank. During regular business hours, a decision to extend credit beyond a customer’s ACH credit line can be made by the personnel most familiar with the client. Yet often customers submit late evening files in hope of making the last processing window. In these time- sensitive situations, how can banks quickly make informed credit decisions that balance risk with customer experience and retention? The Solution Systar’s Credit Risk Decisioning for ACH application provides the most up-to-date customer credit risk information from across bank systems and silos, to deliver accurate guidance for just-in-time ACH credit exposure decisions. The application continuously collects data from the bank’s processing environments, correlates and compares it with historical data to provide complete information for those tasked with making ACH credit decisions on familiar or unfamiliar clients. Decision makers can access real-time dashboards or automatically receive an email with key information to take action from a remote location. Based on an email response, Credit Risk Decisioning for ACH can reset the suspended file within the processing application, or if the bank prefers, notify operations to do so manually. The application presents holistic, real-time credit risk information to make informed ACH file decisions while addressing two key areas of concern: credit extended in error and credit denied in error. Credit Extended in Error Extending ACH credit beyond preset exposure limits is sometimes necessary, but it carries more risk. To ensure that additional credit is properly denied, Systar’s Credit Risk Decisioning for ACH application provides timely information on two key areas of the client’s status at the bank: • Credit Extensions: Consolidates risk information from other lines of business to provide a comprehensive view of credit risk as seen across silos. • Risk Rating: Displays current risk rating for the client to show whether the client has slipped below the level necessary to support extending credit. The Credit Context dashboard displays information on the pending file and a bank-wide perspective of the client’s assets and credit exposure for an informed decision. Business Activity Monitoring by Systar www.Systar .com MANAGE WITH VISION
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Transcript of Systar - US ACH Credit Risk Decisioning
Credit Risk Decisioning for ACH
The Challenge
Financial institutions process ACH payments to provide a valued
service to customers. However, it creates a significant credit risk
for banks as they typically commit to these transactions before
customer funding. In addition, credit decisions on customer ACH
files can have serious consequences - denying a transaction that
could have been approved is potentially devastating to a corporate
customer, while approving one that should be denied is costly to
the bank.
During regular business hours, a decision to extend credit beyond
a customer’s ACH credit line can be made by the personnel most
familiar with the client. Yet often customers submit late evening
files in hope of making the last processing window. In these time-
sensitive situations, how can banks quickly make informed credit
decisions that balance risk with customer experience and retention?
The Solution
Systar’s Credit Risk Decisioning for ACH application provides the
most up-to-date customer credit risk information from across bank
systems and silos, to deliver accurate guidance for just-in-time
ACH credit exposure decisions. The application continuously
collects data from the bank’s processing environments, correlates
and compares it with historical data to provide complete information
for those tasked with making ACH credit decisions on familiar or
unfamiliar clients.
Decision makers can access real-time dashboards or automatically
receive an email with key information to take action from a remote
location. Based on an email response, Credit Risk Decisioning for
ACH can reset the suspended file within the processing application,
or if the bank prefers, notify operations to do so manually.
The application presents holistic, real-time credit risk information to
make informed ACH file decisions while addressing two key areas
of concern: credit extended in error and credit denied in error.
Credit Extended in Error
Extending ACH credit beyond preset exposure limits is sometimes
necessary, but it carries more risk. To ensure that additional credit
is properly denied, Systar’s Credit Risk Decisioning for ACH application
provides timely information on two key areas of the client’s status at
the bank:
• Credit Extensions: Consolidates risk information from other lines
of business to provide a comprehensive view of credit risk as
seen across silos.
• Risk Rating: Displays current risk rating for the client to show
whether the client has slipped below the level necessary to
support extending credit.
The Credit Context dashboard displays information on the pending file and
a bank-wide perspective of the client’s assets and credit exposure for an
informed decision.
Business Activity Monitoringby Systar
www.Systar.com
MANAGE WITH VISION
Credit Denied in Error
While extending ACH credit beyond estab-
lished limits presents risk to the bank so
too does denying it. For example, a key
customer’s payroll file is not processed due
to denial when, considering all available
information, it was within the bank’s risk
tolerance. The Credit Risk Decisioning for
ACH application ensures an informed deci-
sion is made to protect the interests of the
bank as well as those of its customers by
examining:
• Pending Assets: Shows if the credit risk
of an ACH file is actually lower due to client
assets at the bank that were not initially
included in the review and would provide
justification for approving additional credit.
The information gathered represents assets
that the client holds across the bank that
might not be readily visible to the decision
maker.
• Activity Profile: Compares files currently in
process with expected patterns of behavior for
that client on a given day of the week, day of the
month, and depth into the month. While activity
outside normal bounds is not a sole basis for
denying a credit extension, the opposite may be
true - a file that fits an expected pattern of behav-
ior should factor in its favor when considering a
credit extension.
• History of Decisions: Enables the credit
decision maker to gain additional context
by easily viewing the credit decision history
for a specific client including date, value,
amount over limit, percentage over limit,
and who approved the credit extension.
The Right Decision
The Credit Risk Decisioning for ACH
application gathers and presents the most
current information available on a client’s
position, not just within ACH but across the
bank. Its intuitive dashboards arm decision
makers with the context required for chal-
lenging ACH credit risk decisions whether
during normal business hours or just before
the last processing window closes.
The application provides an email interface
that enables decision makers to receive
information on pending credit risk exposure
decisions and take action remotely. It also
automatically tracks the approval process to
produce a rigorous audit trail for operations.
While home-grown tools or alternative
solutions provide partial or after-the-fact
information, Systar’s Credit Risk Decision-
ing for ACH injects real-time operational
insight into customer credit risk informa-
tion. It empowers the bank to make more
informed decisions that mitigate credit risk
while preserving customer loyalty and the
long-term interest of the bank.
For more information on Systar’s Credit
Risk Decisioning for ACH application please
contact your nearest Systar office or visit
www.systar.com.
About Systar
Over 180 clients worldwide, including 10
of the world’s 15 largest banks, rely on
Systar’s performance management
software to maximize the efficiency of
their business operations and IT infra-
structure. Systar is widely regarded as
the leading provider of Business Activity
Monitoring (BAM) solutions and offers
innovative capacity management
software for both physical and virtual
server environments. Systar is listed
on the NYSE Euronext Paris Stock
Exchange (ISIN: FR0000052854-SAR),
and has offices in North America and
Europe. More information about Systar
is available at www.systar.com
Systar, BusinessBridge, OmniVision, BusinessVision, ServiceVision, WideVision and Systar’s logo are registered trademarks of Systar. All other brand names, product names and trademarks are the property of their respective owners. Copyright 2012.
www.Systar.com
MANAGE WITH VISION
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