The State of Credit Risk Analytics in the Jordan Financial Services Industry

April 18, 2018

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The Qarar Market Pulse Series

 

About the Survey

Over the years, organisations have made dramatic changes to their respective risk management policies. This has largely come in response to new regulations, which are a result of the ongoing regional and global financial slowdown, and are set to undergo more changes as new trends and disruptions lie ahead in preparation for 2020. Changing regulations and ever-evolving customer expectations, supported by advanced analytics such as machine learning, are enabling new risk-management techniques.

Today, while a large portion of the population remains unbanked, financial inclusion is a key enabler to boosting prosperity. Analytics is changing the face of credit risk as we know it, playing a growing role in helping lenders assess borrowers more accurately and make faster decisions. The focus on advanced analytics, and the investment being made in it, is increasing for reasons varying from regulatory expectations to the need to stay competitive and minimise risk related losses. As a result, risk management practices continue to gain wider adoption and C-level executives are paying more to manage all types of risks.

It is time to fundamentally rethink your business model and expand your portfolio insights by exploring how advanced risk analytics and decisioning techniques can transform your business.

We would like to thank the organisations and professionals that responded to this survey, which helps us to understand the shifting risk-related priorities. We truly value the information you have provided and appreciate the time and feedback you have given to this survey.

Qarar aims to remain at the forefront of anticipating disruptive forces to assist in strategy development and help organisations take proactive steps to stay in line with industry trends.

 

Background

The Qarar Market Pulse is a series of short market survey reports that aims to measure and report on the matters that are most important to our clients, covering topics like analytics, regulation, competition and risk management. This report on The State of Credit Risk Analytics in the Jordan Financial Services Industry shares the findings of responses collected between 15th January and 1st March 2018 from 23 credit risk professionals in Jordan, of which 87% were from the BFSI sector, 9% from the telecoms sector and 4% from the public sector.

 

Key highlights of the survey: 

57% of Jordanian risk professionals said their primary focus is to improve customer experience as a top business priority, indicating more alignment with business objectives.

Over 56% of respondents chose customer service as a core risk management process that will be automated by 2020.

Minimising risk-related losses was one of the top drivers for employing new credit risk analytics within an organisation.

88% of the respondents believe that analytics is the way forward when it comes to managing credit risk within an organisation.

35% of the audience is considering using machine learning for new business acquisition purposes, followed by 22% for fraud identification.

Skilled human resources, availability of new IT solutions and development of predictive analytics solutions are the top three challenges in the region in terms of deploying credit risk analytics across organisations.

More than half of respondents (52%) felt that internal resources are not up to the mark when it comes to developing sophisticated predictive models for the organisation.

 

“Opportunity cannot exist without risk. Risk management needs to be taken in a strategic and tactical direction with a value-focused approach, because opportunities that create value have the ability to boost reputation, market share, and competitive advantage. Risk professionals need to shift their approach from being risk-averse to risk-aware, and organisations need to get ahead and anticipate disruptive forces to alter their strategy.” – Zaid Kamhawi, CEO, Qarar

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