Businesses face a variety of risks that have a material impact on the bottom line. Economic Associates works with your team to identify, quantify and manage enterprise risk.
Economic Associates specializes in the analysis of risks associated with the activities of financial institutions, or any business with a lending function, including B2B credit lines, retail or commercial banks, neobanks, microfinance institutions, P2P lending platforms, and multi-finance institutions lending from their balance sheets.
Effective risk management of the lending function and the associated book usually requires quantifying and managing credit risk – the risk associated with non-payment – by the business’s debtors. Related risks typically include price, transaction, interest risk as well as strategic and reputational risks, and country and transfer risk for businesses with international operations.
An empirical assessment of the loan book combined with an understanding of the complex interaction of different enterprise risks can inform the business’s risk management culture, business practices, and underwriting standards, as well as identify underserved markets, pockets of concentration, and areas for business expansion, and the tradeoffs inherent in increasing the business’s balance sheet or lending volume.
risk management consulting
We specialize in quantitative modelling of enterprise risk, with a focus on credit risk and credit scoring modelling. We use statistical and regression analysis or machine learning models whenever appropriate. We use structural, reduced-form or hybrid models for modelling credit risk; as well as portfolio theory, analysis and modelling to optimize risk-return metrics in the balance sheet. We build credit scoring models with a view to introducing new protocols to identify and monitor risk in the balance sheet, inform risk management practices, advise on client selection and balance sheet expansion based on client characteristics, track credit performance, and advise on loss provisioning for financial reporting purposes.
We work with and are compatible with all major statistical and econometric software packages, including SAS, STATA, SPSS, Gauss, NLOGIT (LIMDEP), R, Winbugs, Minitab, and others.
We assist with data collection, cleaning, organization, restucturing, and interpretation.