Reference Stories
  • Enhanced Loan Review and Early Warning Systems
    • Situation:

      A leading national SBA bank was looking to enhance their credit-monitoring practices and institute more effective early warning systems to actively identify risky customers.

      Critical Issues:
      • The bank’s system lacked resources, appropriate data and effective analysis to detect problem customers early.
      • The bank needed to generate nine new good lending customers for each write-off.
      • The current loan review process resulted in an annual cost of $1200 per customer.
      • With the current review process, the bank would need 10 additional full-time employees.
      PayNet Solution:

      Bank’s management, together with PayNet, implemented PayNet AbsolutePD® (APD) as a tool to anticipate problems of future deterioration. The APD model, developed to create probability of default estimates consistent with actual default rates, is calibrated to current macroeconomic conditions and self corrects on a quarterly basis to adjust for past variances.

      • The bank was able to form quarterly risk ratings on each borrower without gathering and reviewing financial statements on each of the bank’s small business borrowers.
      • Future staffing costs were reduced by $625,000 (87%).
      • The cost of compliance, account monitoring and the overall loan review process were reduced 30%.
      • The bank experienced an enhanced ability to monitor and anticipate risk changes.
      • Forecasts for each of eight future quarters are provided for every small business in their portfolio through an online reporting platform.
  • Bank Underwriting Quality Issue
    • Situation:

      V.P. Risk Officer for a major regional bank tasked with evaluating and revising or replacing the current origination and pre-approval process.

      Critical Issues:
      • Current credit decisioning process is manual and costly, utilizing a combination of scores and attributes that cause confusion in the field.
      • Overall approval rate is 68% but lacks consistency across high and low credit quality deals.
      • Mandate to automate more declines and pre-approvals to be more proactive in pre-approval strategy.
      PayNet Solution:
      • PayNet conducted a retro and swap set analysis utilizing PayNet MasterScore® v2 to determine the economic impact of rejecting more low credit quality deals and approving more high credit quality deals – included analysis of new booked deals and new application files.
      • Current decisioning practice showed approval/decline rates for low credit quality deals at 57%/43% respectively and 70%/30% approval/decline rates for high credit quality deals.
      • New decisioning practice showed approval/decline rates for low credit quality deals at 40%/60% respectively and 100%/0% approval/decline rates for high credit quality deals.
      • Overall default rate 3.7%; LGD 29% based on bank loss data; profit margin 4%.
      • Credit losses reduced by 6.9% and originations increased by 3.0%.
      • Total net value of this improvement: $1,700,000.
  • Streamlining the Credit Review Process
    • Situation:

      The Head of Analytics and Credit Administration for a major finance company responsible for conducting quarterly credit reviews on 1500 customers was charged with making the process more efficient and less costly.

      Critical Issues:
      • The process took days per review for five to six full-time employees.
      • Process called for running manual credit reports and manually pulling financial statements to conduct reviews.
      • Hard and soft costs were estimated to exceed $1.5 million per year.
      PayNet Solution:
      • Employ PayNet Credit Review ExpressTM to more accurately monitor and manage risk, manage staff and track account performance.
      • Assigns probability of default (APD) to each borrower for risk rank ordering.
      • Utilizes dashboard for information at a glance: segment portfolio by any variable (i.e. APD, Exposure Dollar Amounts, APD Migration).
      • Provides a drill down feature from dashboard for a granular review of each borrower and the relevant details.
      • Customizes business rules based on risk tolerance to determine loan review type. Identifies borrowers automatically for loan review type: (1) Light, (2) Medium, (3) Full.
      • Produces management reports to track portfolio performance over time and benchmark portfolio vs. industry statistics.
      • Expect one-tenth the amount of time to review each credit.
      • Project cost of credit review to be reduced from $250 per review to $9.25 per review.
  • New Technology for Pro-Active Portfolio Management
    • Situation:

      A top ten SBA 2015/2016 Preferred Lender was planning for continued double-digit growth while simultaneously focused on improving shareholder returns.

      Critical Issues:

      Bank’s team identified the key drivers for success:

      • Reduce losses through the cycle by improving borrower-level early warning.
      • Limit new staffing required by planned growth. Streamline credit operations for existing borrowers.
      • Increase net profitability; improve risk-based pricing.
      • Allocate capital more effectively. Improve ALLL methodology (and prepare for CECL).
      • Target emerging opportunities more quickly. Obtain better, more-localized sector level risk metrics on industry data.
      PayNet Solution:

      Bank worked closely with PayNet’s Solution Delivery Team, to implement PayNet’s AbsolutePD® (APD) borrower specific default forecasts across its risk management practices.

      PayNet APD:

      • Measures risk by business unit and industry.
      • Identifies targets enabling better business decisions to grow the business.
      • Streamlines process of evaluating and monitoring transactions below $3 million in exposure.
      • Simplifies the quarterly loan review process which requires costly collection and analysis of (unaudited) financial statements.
      • Provides earlier warning of a deterioration in a customer’s credit risk from the PayNet database, increasing the opportunity to protect against future losses.
      • Identified and saved bank $200,000+, resulting from improved margins, avoided losses, optimized loss forecasting, improved capital allocation and increased portfolio sales.
      • Cost savings versus cost of PayNet AbsolutePD reflected a 4:1 ratio.
  • Optimize Loan Review Process
    • Situation:

      President and CCO of small bank-owned commercial finance company were facing regulatory pressures from auditors who required more transparency in the bank’s measurement of their portfolio’s credit risk

      Critical Issues:
      • Need for deeper analysis of loan portfolio
      • No triggers in place to justify strategic changes affecting the risk dynamics within portfolio
      PayNet Solution:

      PayNet AbsolutePD® delivered this functionality:

      • Provided vintage analysis (looking year-over-year) and residual analysis Dissect borrower portfolio using a scoring method Create a geographic distribution reporting methodology
      • Acquire metrics to benchmark their own portfolio by vendor, market segment, geographic segments and applicant profile
      • Implement triggers initiating strategic change
      • Achieve ability to view borrowers that are outliers in a typical credit migration range
      • Aid in detecting problems before they occur
      • Reduced annual review time on their specific borrowers under an exposure size of $250,000 (87% of borrowers in their portfolio)
      • Saved a minimum of $73,500 on the annual review process
  • Gaining Efficiency and Lowering Costs
    • Situation:

      Chief Financial Officer of a regional bank in a high growth mode needed to rapidly comply with stress testing requirements. The bank needed to demonstrate commitment to continuous stress testing across their portfolio in order to gain regulator approval to acquire more banks.

      Critical Issues:
      • Bank had 10,000 credits under 1 million dollars, totaling approximately 2 billion dollars in exposure.
      • Bank collected financial statements for over 10,000 credits.
      • Hired additional employees in risk management and compliance.
      • Running stress testing processes on smaller exposures would cost in excess of 2 million dollars in operational costs or 20 basis points of the assets.
      PayNet Solution:
      • Implement PayNet Absolute PD® Portfolio Manager and Stress Test Simulator providing quarterly reporting to fill the gap of current manual processes to collect financial statements and apply risk ratings.
      • The bank implemented the PayNet stress testing process to risk rate 10,000 loans under a million dollars in exposure, yielding a cost savings of 2 million dollars.
  • Understanding True Reserve Requirements
    • Situation:

      The Chief Credit Officer of a regional bank sought to enhance the precision of their ALLL calculations due to the impact on their earnings and capital.

      Critical Issues:
      • Unable to distinguish areas in their portfolio that were improving and those that were deteriorating due to using a pooled risk rating approach.
      • Inconsistencies or confusion when presenting the reserve to the institution’s board or examiners due to the lack of a standard metric for communication.
      • Lack of tools to respond to deterioration in current and future customers’ credit risk and provide protection against losses currently registering a $3.1 million annual rate.
      PayNet Solution:
      • Implement PayNet AbsolutePD® to identify changes in credit rating forecasts and better understand their portfolio’s default probability.
      • Provide the ability to drill down to identify an individual borrower’s likely future performance and track the degree of risk over the next eight quarters.
      • Improve estimations of loss reserves and determination of economic or regulatory capital.
      • Ability to perform risk analysis by segment allowed the bank to release 50% of its reserves.
      • Improved productivity of risk analysis by 64% per year.
  • Doing More with Fewer Resources
    • Situation:
      • President and CEO of a small bank-owned commercial finance company needed help evaluating risk in a forward-looking manner
      • Bank currently utilizing PayNet Credit History Reports and PayNet MasterScore®
      Critical Issues:
      • Problems identifying which borrowers’ quality was improving or deteriorating, therefore lacking a focused review process
      • No early warning process to accurately assess risk and measure migration and segmentation
      • Inadequate transparency when reporting to the Board
      • Limited resources to easily monitor multiple states and industries
      PayNet Solution:
      • Employ PayNet AbsolutePD® to evaluate risk ratings and receive early warning signals to measure risk accurately
      • Meet regulatory expectations by providing a tool that helps anticipate problems before they actually arise
      • Determine which borrowers required further review based on positive or negative credit quality migration
      • Viewed industries and states across the nation without overextending resources
      • Effectively monitored different segments across industries nationwide
      • Observed early deterioration warning signals
      • Proactively satisfied regulatory requirements
      • Focused limited resources more effectively Gained the capability to benchmark against competitors
      • Achieved economies of scale utilizing fewer resources to attain in-depth portfolio analysis
  • Benefits and Savings from a Portfolio Management Tool
    • Situation:

      National bank-owned leasing company with a $6 billion portfolio, seeking an internal way to assess risk of their 30,000 borrowers after origination

      Critical Issues:
      • Lack behavior model to measure risk by segment
      • Must improve processes for risk-based pricing and ALLL predictions
      • Need to monitor transactions below $1 million without financial statements (accounts for $1.6 billion of total portfolio)
      PayNet Solution:
      • Implement PayNet AbsolutePD® to measure risk by business unit and industry
      • Improve ALLL predictions with more accurate forecasting
      • Streamline process of evaluating and monitoring transactions below $1 million
      • Provide insight on smaller borrowers to help bank decide where to invest and focus the loan review process onto riskier borrowers
      • Monitor portfolio movements to determine both positive and negative risk migration
      • Provide an early warning trigger to identify riskier borrowers
      • Identified and saved bank $800,000+, resulting from improved margins, avoided losses, optimized loss forecasting, improved capital allocation and increased portfolio sales
      • Cost savings versus cost of PayNet AbsolutePD® reflected a 4:1 ratio
  • Improved Productivity from Early Warning
    • Situation:

      Chief Financial Officer of a large equipment finance company was concerned that the company lacked an effective “early detection” system.

      Critical Issues:
      • Lender was the finance division of a major commercial bank.
      • Lender needed to identify deteriorating credits, especially in the current low delinquency environment.
      • Lender had 295 borrowers who are current, but greater than 90 days past due with other lenders (total exposure was $133mm).
      PayNet Solution:
      • Utilized AbsolutePD® Risk Migration “early warning” tools to mitigate loss exposure.
      • Segmented potential troubled accounts by obligor and facility types.
      • Compared the lender’s current “early detection” system with the new system.
      • Improved productivity of the “early detection” function.
      • Structured statistical process yielded better results.
      • Identified $339,000 of troubled account exposure subject to immediate action.
      •                ($113mm x 1% PD x 30% LGD = $339,000)
  • Fast Track Underwriting
    • Situation:

      The Chief Risk Officer of a major commercial bank instituted a project to make major improvements to the current underwriting process that was overburdened with high touch human intervention and information requirements. The scope of the project was to build an infrastructure to optimize the straight through process from identification of the opportunity to funding the transaction. PayNet was engaged to leverage commercial credit information and assist in the development of a decisioning strategy. 


      Critical Issues:
      • Need to streamline the underwriting process to deliver credit faster and with safety. It is currently taking 30 days to process credit.
      • Need to transition from an expert checklist to an expert scorecard to enhance the manual process through automation and improved conversion rates.
      • Need to grow in the face of competition from FinTech and other banks. Majority of loans are made to existing clients and attracting new clients requires speedy decisions.
      PayNet Solution:
      • Retro/swap analysis to estimate the profit and loss impact of improved credit decisions. 
      • Expert Judgement Scorecard was created to standardize, leverage and accelerate the credit processes using various commercial and consumer scores (PayNet MasterScore®, FICO consumer score and FICO SBSS).
      • Express credit process was designed to reduce credit decisions from 30 days current time to 5 days.
      • Earning assets increased 10%.
      • Credit losses estimated no change.
      • Profit jumped from $339,567 to $373,523 for a 10% increase in net income.
  • Improving Commercial Bank Loss Reserves
    • Situation:

      The Chief Risk Officer of a major commercial bank was concerned about the proper appropriation of capital for loss reserves. Capital allocation is driven by risk ratings, which are often not kept up-to-date and can be difficult to obtain on certain borrower segments. Any portfolio that contains a broad spectrum of credit risk needs a broad spectrum of risk grades.

      Critical Issues:
      • Lender was using a pass/fail risk system.
      • Risk ratings were only adjusted in the event of adverse performance.
      • The pass/fail system resulted in sub optimal allocation of capital.
      PayNet Solution:
      • The quarterly AbsolutePD (APD) data is transformed into risk ratings and loaded into their system of record.
      • APD allows the bank to analyze a wide range of asset classes using the same Risk measure.
      • APD applies forward looking credit ratings to set capital levels.
      • An automated approach to maintaining up-to-date risk profiles, saving 1 day, or 8.3 hours, of FTE work for every 100 borrowers.
      • Quarterly updates of risk ratings for a specific segment of the lender's business using AbsolutePD.
  • Commercial Bank Enhanced Credit Monitoring
    • Situation:

      A regional bank wanted to enhance their credit monitoring practices and improve the effectiveness of their early warning systems to actively identify risky customers. The bank’s systems were unable to identify emerging credit problems as they lacked the resources, appropriate data and analysis to detect at-risk customers earlier.

      Critical Issues:
      • Efficient identification of risk levels and risk trends across a small business portfolio.
      • Identify borrowers to put through the “audit review” process.
      • Seeking earlier detection of changes in credit risk to allow for management action.
      PayNet Solution:
      • PayNet AbsolutePD® Portfolio Manager enables lender to identify borrowers with emerging increases in their risk profile within their portfolio.
      • APD provides regular and periodic updates on credit conditions for borrowers without increasing staff or pursuing timely financial statements.
      • Identified 2 borrowers with $450,000 worth of exposure risk who had upcoming renewals.
      • Managed out of the relationships with the 2 borrowers that were identified as having increasing risk as a result of using PayNet solutions.
  • AbsolutePD® Commercial Bank
    • Situation:

      The Senior Management Unit, Senior VP of Credit Risk and CCO of a large bank with 13 billion in assets was concerned with audit issues regarding loan review of small business loans. The bank was looking to add an automated system to solve this issue rather than add 2 FTE’s to the current staff of 15 FTE’s.

      Critical Issues:
      • The bank currently has 13,000 loans and are in a growth/acquisition mode with 15 FTE’s reviewing these loans. B2B loan review transactions per FTE grew from 200 to 320, 2012 vs. 2010.
      • Total loan review transactions grew from approximately 2000 transactions in 2010 to 4700 in 2012.
      • An increase of 2 FTE’s at an annual salary of $45,000 would not provide the capacity to review the large quantity of loans in their portfolio.
      • Lending and support expenses significantly grew since 2010 driven by the addition of personnel and business expenses impacting the bank’s efficiency ratio.
      PayNet Solution:

      The purchase of PayNet Absolute APD Portfolio Manager allows the business unit to zero in on the 4% of the portfolio that is improving or declining.

      • Streamlined and enhanced loan renewal process.
      • Provides a risk rating APD applied to the banks internal one dimensional historical loss model.
      • Allows the bank to take control of their entire portfolio and maintain their current headcount of 15 FTE’s.
  • Commercial Bank Allocation of Capital
    • Situation:

      A bank with 11B in total assets has a majority of CRE and C&I exposure lacking the resources to create important timely management reports. The staff is lean with few quant analysts and have inefficient risk management systems in place. Board reporting is a month long process to report on risk. The CRO’s current methodology for allocation of capital was over weighted by the recession.

      Critical Issues:
      • Rising regulations causing higher costs.
      • Too many separate asset classes to manage Consumer, CRE and C&I.
      • The bank targeting a lower efficiency ratio in the 30’s. Qualitative adjustments suggested further release of capital, but the lack of granularity reduced confidence in this analysis.
      PayNet Solution:

      PayNet risk management tools allow the bank to work smarter not harder. These tools provide capabilities equivalent to those of larger size banks and abide by the same regulations and meet the same guidelines as bigger banks with greater analytics, IT and staff resources. PayNet APD is a time saving tool for the CCO. PayNet provides the risk management and reporting resource that they cannot afford to build in house.


      The bank found APD was more effective in identifying early warning default and justified using PayNet solutions by identifying the opportunity to further reduce reserves by 20 million dollars and save administrative costs.

  • Commercial Bank Stress Test
    • Situation:

      The Chief Financial Officer of a regional bank in a high growth mode needed to rapidly comply with stress testing requirements.

      Critical Issues:
      • The cost to the bank to comply would be 2 million dollars.
      • The bank had 10,000 credits under 1 million dollars, totaling approximately 2 billion dollars in exposure.
      • The bank collected financial statements for over 10,000 credits.
      • The bank hired employees in compliance with risk management experience.
      • The bank needed to demonstrate commitment to continuous stress testing in order to be able to acquire more banks without regulators blocking acquisitions.
      • Incorporating the processes on the smaller exposures would cost in excess of 2 million dollars in operational costs or 20 basis points of the assets.
      PayNet Solution:

      The bank utilized PayNet Absolute PD and stress testing providing quarterly reporting to replace current processes as the bank will not be able to continue the cost of collection and manual review of financial statements and ratings.


      The bank implemented the PayNet stress testing solution for 10,000 loans under a million dollars in exposure saving the bank 2 million dollars.

  • Improving Call Prioritization
    • Situation:

      A Senior Collections Manager at a commercial finance company with a $2 billion portfolio realized the limitations of calling past due accounts as a collections strategy and was looking to integrate a more predictive early warning system.

      Critical Issues:
      • The company’s delinquencies started trending higher in the second half of 2014.
      • As the delinquencies started rising, the company increased calling efforts to collect payments utilizing the same call prioritization process with the same resources.
      • Due to a hiring freeze and tight budget constraints, the collections manager was unable to increase head count. 
      PayNet Solution:
      • Using Portfolio Risk Manager (PRM), the commercial finance company was able to more proactively monitor delinquencies and better prioritize calls based on borrower performance with other lenders.
      • Using the PRM early warning feature, the collections manager was able to uncover hundreds of troubled accounts that were already significantly past due with other lenders.
      • Account payments increased an average of 5% without additional levels of calls.
  • Increasing Efficiencies with Less Resources
    • Situation:

      A Portfolio Risk Manager of a regional bank with $200 million in assets had limited resources and was seeking a more “pro-active” way to prioritize collections efforts to maximize impact without hiring.

      Critical Issues:
      • Over the past few years, delinquencies had been at record lows. Collections activity was down, and the bank was operating with a downsized collections team.
      • There were early signs that delinquencies were on the rise which meant that collections activity would pick up as would the need to hire additional collections personnel.
      • Due to tight margins and slow growth, the bank had recently imposed a hiring freeze and cost controls.
      • With little borrower information and limited systems support, the bank had prioritized its collections activity based on exposure size and number of days past due.
      • The bank needed a cost effective way to streamline its collections activity without spending money on pulling credit reports or hiring new collections people.
      PayNet Solution:
      • By subscribing to Portfolio Risk Manager (PRM), the bank was able to implement an early warning system that prioritized collections activity according to degree of risk, past due exposure, size, and probability of default.
      • Portfolio Risk Manager provided the bank with timely borrower credit information that allowed the bank to focus its collections activity where it was most needed and avoid having to hire more collections staff.
      • With PRM, the bank was able to address its mounting collections needs with greater efficiency at a fraction of the cost of hiring and training additional collections personnel.
  • Increased originations and approval rates: Independent Transportation Lender
    • Situation:

      SVP, Strategy and Chief Risk Officer of a small fleet business lender unable to accomplish profit objectives with current approval rate of 84%.

      Critical Issues:
      • Aged internal model and review rules without delineation by type/class of trucks.
      • Lack of historical borrower performance data limited ability to model risk.
      • Subjective, manual decisioning produced inconsistent application of credit policy.
      • $158.6 million annual originations volume.
      • Credit losses totaled $1.3 million annually.
      PayNet Solution:
      • Provided internal performance archive data to build semi-custom business segment scorecards. Data included Transportation Score and industry-specific variables.
      • Retro tested Transportation Score on lender's booked deals through different economic cycles in comparison to existing internal model.
      • Analyzed decisioning practice and demonstrated ability to identify high quality applicants that were being declined as well as high risk borrowers that were being approved.
      • Raised credit approval rates to 95%.
      • Increased originations bookings by $20.6 million.
      • Maintained same credit loss amount at $1.3 million annually.
  • Reduced Credit Losses: Captive Transportation Lender
    • Situation:

      Lender desired improved efficiencies and a more predictive decisioning process through auto pulls and a more touchless environment.

      Critical Issues:
      • Used 15 year old scoring model that no longer performed well. Decisioning output led to reduced sales and unnecessary losses, so credit staff ignored the model.
      • High cost structure: spent nearly $5 million in the credit process alone. Cost per application was $250 which they wanted to reduce by 60%.
      • $2 billion portfolio.
      PayNet Solution:
      • Developed suite of 6 custom scorecards utilizing lender's application data, multiple commercial and consumer credit bureaus' data, and addressing unique borrower segments.
      • Implemented scorecards as primary decisioning tool.
      • Realized annual reduction in processing costs of $9 million.
  • Increased Approval Rates and Reduced Credit Losses: Transportation Equipment Lender
    • Situation:

      President of a transportation equipment lender sought to improve loan-originations process.

      Critical Issues:
      • Highly manual originations process was costly and inconsistent.
      • Approval rate far below company goal; some "good" applicants were declined.
      PayNet Solution:
      • Retro-tested to find the transportation score for the lender's booked deals.
      • Analyzed decision-making practices to demonstrate the ability to approve high-quality applicants that were being declined.
      • Recommended a swap set to reject low-quality deals and approve high scores.
      • Credit losses reduced by 16 percent.
      • Originations increased by 5 percent.
      • Overall value of this improvement was $2.7 million per year.
  • Increased Credit Approval Rate: Small Business Lending Division
    • Situation:

      President, small business lending division of a major financial institution concerned about operational efficiencies.

      Critical Issues:
      • More efficient small business lenders were taking market share.
      • 46 percent credit approval rate on new small business loans.
      • 53 percent booking rate on approvals.
      PayNet Solution:
      • Conducted retro and swap set analyses on the lender's portfolio and recent applicants using credit scores.
      • Illustrated approval rate by score quality, and recommended approving all highest-scoring applicants.
      • Recommended further review of the lowest-scoring applicants.
      • Immediate benefit: increasing the approval rate by 1 percent provided $5.1 million more earning assets per year.
      • Long-term strategy: approving all high- and mid-scoring applicants would increase the approval rate by 6 percent and add $30 million per year in earning assets.
  • Reduced Turnaround Time and Increased Productivity: Major Finance Company
    • Situation:

      Vice President of Credit, major construction and transportation lender desired to reduce turnaround time on 2,500 monthly applications.

      Critical Issues:
      • Lender checked credit references via phone calls and fax requests.
      • Lender needed to respond quickly to dealers to maintain satisfaction and high service level.
      PayNet Solution:
      • Provided access to credit history reports via the Internet to eliminate the faxes and phone calls for credit references.
      • Provided training to the credit staff on use of the credit history reports.
      • Lender realized a 40 percent decrease in turnaround time to dealer.
      • Faster response enabled the lender to capture more dealer originations, which resulted in $50 million additional loan volume.
      • Saved $260,000 per year by reducing credit application processing time.
  • Default Forecast Report: Bank Finance Subsidiary
    • Situation:

      Senior Vice President, bank finance division needed a more granular and accurate risk-rating system.

      Critical Issues:
      • Lender needed to reduce high operating costs of rating small-ticket loans.
      • Lender was the finance division of a major commercial bank.
      • Lender needed to proactively improve the risk-rating system in reaction to parent and regulatory demands.
      PayNet Solution:
      • Developed a default forecast report.
      • Segmented the risk-rating system by obligor and facility types.
      • Compared the lender's current risk-rating system with the new system.
      • Lowered the division's cost of capital allocated by parent.
      • Improved productivity of the risk-rating function by 75 percent per year.
      • Structured statistical process yielded better results. 
  • Custom Portfolio Benchmark Report: Independent Finance Lender
    • Situation:

      President, major office equipment finance company needed to increase approval rate while maintaining credit losses in acceptable range.

      Critical Issues:
      • Lender operated vendor financing programs with a goal to be first-choice financing source among vendors.
      PayNet Solution:
      • Developed a custom portfolio benchmark report showing marketing, credit, and collections performance versus that of comparable peers.
      • Demonstrated a flat market share within equipment segments over a three-year period.
      • Demonstrated that long-term delinquency trends were the lowest 10 percent among their peers.
      • Approval rate was increased by 1 percent.
      • Origination volume was increased by $50 million.
      • No material change in credit quality.
  • Custom Portfolio Benchmark Report: Major Captive Finance Lender
    • Situation:

      President, major captive office equipment finance company needed to determine source of recent sharp delinquency increase for small-ticket leases.

      Critical Issues:
      • Needed to explain portfolio performance to parent.
      • Needed to identify source of problems in order to make organizational changes.
      PayNet Solution:
      • Developed a custom portfolio benchmark report showing operational performance versus that of comparable peers.
      • Proved the source of delinquency to be misapplication of payments by identifying multiple contracts for same borrower and then reviewing delinquency occurrence for each contract.
      • Reduced operating costs through improved payment-processing function.
      • Increased cash flow by collecting past dues.
  • Custom Portfolio Benchmark Report: Small-Ticket Finance Lender
    • Situation:

      Senior Vice President, captive construction equipment lender desired to improve credit department processes, explain risk level of the portfolio and compare company's performance to peers.

      Critical Issues:
      • Foreign parent unfamiliar with the U.S. finance market.
      • Continued parent funding dependent on demonstrating lender's risk level reasonable versus that of U.S. peers.
      PayNet Solution:
      • Developed a custom portfolio benchmark report.
      • Illustrated the lender's credit delinquency versus that of anonymous peer group of comparable construction lenders.
      • Compared the lender's market share and portfolio growth to those of peers.
      • Defined more stringent credit policy rules for high-risk borrower types.
      • Validated a business model for a foreign funding source.