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The ABC Bank has done the segmentation of customers according to their Earnings,
Preferences and usage of cards. The bank also has a indicator called CLV(Customer lifetime
value) which helps understanding the worth of the customer if they remain with the bank in future
years.
With all these data available the bank can go for a an matrix of business intelligence to measure
the creditworthiness of the applicants with the help of IT system and then set the criteria for
deciding the approval of forms.
One such model for determining the score for each applicant could be:
* Can be given on scale like 5 for > 100000, 4 for 75000 to 60000, 3 for 40000 to 60000
and 2 for <40000.
Similarly for all other parameters scores can be assigned.
Decision Diary: Credit Cards application pending- Who are our best prospect cardholder?
The decision for including a parameter can be determined by analysing past data of
consumers and weightage can be determined by determining the correlation of the factor
with the probability of default. Like How high income correlated with customers
defaulting or No of years with bank correlation with default.
Many such parameters can be added with different weightages to determine the total score
and customers will be given the card according to the new score such determined.