December 8, 2015

Auriemma Launches Credit Operations Roundtable Amid Rising Regulatory Pressure

(New York, NY):  Auriemma Group announces the launch of an Industry Roundtable focused on credit application processing and approval – highly complex functions fraught with compliance and operational risk.

Banks have been inundated with anti-money laundering (AML), fair lending, and ability-to-pay (ATP) regulatory requirements in recent years, greatly increasing the complexity of customer acquisition. The Credit Operations Roundtable, launched in November, is designed for executives who oversee policy execution, applicant identity verification, and fair lending reviews at this stage of the credit lifecycle.

“The regulatory environment has significantly impacted credit policies, which makes it so much more important that those policies are implemented and adhered to as closely as possible,” said Jeff Tennenbaum, Auriemma’s Director of Global Business Development.

In addition to policy implementation, balancing cost and operational efficiency has grown more challenging with the rising regulatory burden: Credit Operations teams are increasingly tasked with satisfying a range of customer identity and income verification checks, while reducing application processing time, moving to automated and risk-based operating models, and optimizing governance and organizational structure. Now more than ever, operations must work in concert with policy and risk management governance departments to ensure policy execution conforms to increasingly stringent standards.

“In an environment where AML and fraud are increasingly large concerns, there’s that much more pressure on Credit Operations to get it right,” Tennenbaum said. “This is especially true in the card space, where millions of new accounts are originated on an annual basis.”

The Credit Operations Roundtable’s inaugural session, attended by the majority of the top 15 US credit card issuers, featured discussion on topics related to compliance management, quality monitoring, and operational efficiency, including:

  • Applicant identity verification practices in light of AML and know-your-customer (KYC) regulatory requirements
  • Fair Lending, disparate treatment, and ATP analyses for the purposes of establishing initial credit limits and determining eligibility for line increases over the life of a loan
  • Automated vs. manual data processing, judgmental review of exceptions, and adherence to risk control frameworks
  • Development of robust quality assurance (QA) and self-assessment controls, and strategies to achieve customer experience goals

Auriemma’s industry-leading operational benchmarking will complement in-depth peer discussions and help organizations compare key performance indicators to the competitive landscape. Initial metrics will emphasize efficiency and effectiveness metrics such as conversion rates, application processing and credit approval cycle times, and manual processing expenses. Similar to other Auriemma roundtables, members will have year-round access to custom peer group surveys administered through the consultancy’s proprietary online benchmarking portal.

The Credit Operations Roundtable joins a range of risk-management-oriented Auriemma working groups covering servicing, portfolio management, and collections. A Marketing Operations Roundtable, currently planned for the first quarter of 2016, will further expand the platform to cover the end-to-end product lifecycle.

About Auriemma Group

Auriemma is a boutique management consulting firm with specialized focus on the Payments and Lending space. We deliver actionable solutions and insights that add value to our clients’ business activities across a broad set of industry topics and disciplines. For more information about Auriemma’s Industry Roundtables, please contact Tom LaMagna at (212) 323-7000.

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