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Papers and Presentations

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Boom to Bust – and the implications
Helen McNab ScorePlus Consultant and David Cavell ScorePlus Associate May 2022
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This paper addresses some well recognised key trends in the UK economy, each of which contributes to a picture of the short and medium term business environment. It argues that when these pieces of the jigsaw are brought together the resultant picture should give rise to considerable concerns amongst lenders. It foresees a significant downturn, reviews the potential implications and identifies actions lenders should be taking now.

I am grateful to David Cavell, ScorePlus Associate, for setting out an understanding of the current economic challenges in the UK. His notes have been supplemented with publicly available statistics and references. Together, we have proposed a number of areas for lenders to address in response to these challenges. Feedback on this paper is welcome.

Economic Highs (or Lows?)
Helen McNab ScorePlus Consultant May 2022
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This brief paper identifies a number of alarming “highs” in the UK economy currently. It suggests caution in interpreting these highs as COVID may make either the starting or current points of reference unreliable. However, as credit risk practitioners, we have to operate based on forward looking business assumptions, to drive strategy and to provide benchmarks for onward revisions. It proposes examining long run evidence to temper our understanding of current economic indicators.

Advancement through Security of Employability
ScorePlus Associate David Cavell January 2022
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To dovetail with the launch of our Spring 2022 seminar training programme, I asked David Cavell to outline his thoughts on how to attain sustained employability in a changing world. In his article, he looks at three critical factors that aspiring professionals may take into account as they seek to progress their careers, and ensure security of employability in an increasingly disrupted marketplace. It’s a 3 minute read and I commend it to you.

Great Expectations: Raising Standards in a Crisis - Paper and Presentation for 
Credit Scoring and Credit Control Conference XVII 25-27 August 2021
Gerard Scallan and Helen McNab, August 2020
Download Paper here     Download Presentation here
This paper and presentation reflect Scoreplus’ experience since early 2020 in formulating, measuring and adjusting credit policies as the Covid pandemic has developed. It suggests permanent changes to management procedures to prepare lenders for fast response in future crises.

Great Expectations: Raising Standards in the Covid-19 Crisis - Presentation
Gerard Scallan and Helen McNab, June 2020
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This paper addresses the challenge posed by Covid-19 to portfolio governance for consumer credit. It proposes speed of corporate response is a key determinant of whether a lender survives or not. Click here for a longer precis (1st paper on the page).

Stable Income Index - Outline Specification
Gerard Scallan and Helen McNab, June 2020
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This paper introduces the concept of numerical index to determine the stability of a customer’s income. It has been developed in response to managing post-payment holidays through the Covid-19 crisis. Click here for a longer precis (2nd paper on the page).

Building Payment Holidays into Scores
Gerard Scallan, July 2020
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This paper defines a road map for scorecard changes arising from payment holidays. It focuses on ongoing behavioral scores, used to support operational decisions, IFRS9 provision calculations and Basel capital calculations. Like any good road map, it sets out alternative routes. It is not a recipe book set of instructions.

Managing through the Covid-19 Crisis: a 3-phase Approach
Helen McNab, April 2020
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Initial guidance for managing models during the early part of the COVID-19 crisis.

Risk Appetite - Principles for Triggering Action
Helen McNab January 2021
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ScorePlus commentary on PSI vs KS for measuring population stability.
Gerard Scallan, 2019
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How (not) to measure population stability 
Gerard Scallan, 2019
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Principles of Scoring: The Building Blocks
Helen McNab.
Presentation materials for the online mini seminars, starting Monday 27 April 2020 13:00-14:30. 
Download PDF here. 

Keeping on the Rails: When Delinquency Overshoots …
Gerard Scallan. 
This presntation gives an analytic framework with practical examples for managing through a recession. 
Download PDF here. 

Speed Reading:  Portfolio Tracking in a Recession.  Conference paper.
Gerard Scallan. 
This paper was originally presented in 2009 following the GFC. We are currently working on a revision relating to the COVID-19 crisis. Email info@scoreplus.com for notification of the revised paper. 
Download PDF here.

Actual = Expected: Statistical Framework for Scorecard Management. ScorePlus webinar 31 March and 6 April 2020.
Gerard Scallan. 
Originally published in 2013, this paper has been updated and revised (31 March 2020) to begin thinking through the approach we need during / post the COVID-19 crisis. Presented by webinar on 31 March and 6 April 2020.  
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Question on Binning and the Use of marginal Information .
Gerard Scallan. 
Response to a delegate question from the ScorePlus webinar "Actual = Expected: Statistical Framework for Scorecard Management" on 31 March and 6 April 2020.  
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Notes on Scorecard Scaling Gerard Scallan and Helen McNab May 2017 Download PDF here. 

Portfolio Management - Top 10 tips. Gerard Scallan and Helen McNab. Suggested tips and supporting questions for all Portfolio Management teams to ask. Download PDF here. 

Credit Risk Management Framework. Gerard Scallan and Helen McNab. Originally published in 2002 it has been updated and revised to match our current thinking. Download PDF here.

Why You Shouldn’t Use the Gini. Gerard Scallan, November 2013.  From the ARCA Retail Credit Conference, Australia. Download PDF here.

Do We Need Cut Offs? From Matching Accept Rates to Maximising RORAC. Gerard Scallan, November 2013. Updated ideas from the Edinburgh conference paper of 2011. From the ARCA Retail Credit Conference, Australia. Download PDF here.

Actual vs Expected: Statistical Framework for Scorecard Management. Gerard Scallan, November 2013. From the ARCA Retail Credit Conference, Australia. Download PDF here.

Marginal Kolmogorov-Smirnov Analysis: Measuring Lack of Fit in Logistic Regression. Gerard Scallan August 2013. From the Edinburgh Credit Scoring Conference. Download PDF here.

Class(ic) Scorecards: Selecting Characteristics and Attributes in Logistic Regression. Gerard Scallan, 2011
Slides explaining new ideas to help in the selection of characteristics and attributes in logistic regression. From the Edinburgh Conference, August 2011. Download PDF here.

Do We Need Cut Offs? Pricing for Profit, Helen McNab, 2011
Slides challenging the concept of cut-offs - and how setting 'return on capital' requirements' can alter our view on what price we should charge for credit.  From the Edinburgh Conference, August 2011. Download PDF here

Marginal Chi² Analysis: Beyond Goodness of Fit for Logistic Regression Models, Gerard Scallan, 2009
Slides explaining the ideas behind the Marginal Chi² approach to testing scorecard sufficiency. From a conference at Imperial College London, January 2009. Download PDF here.

Life After Basel: rethinking the feedback loop, Gerard Scallan, 2007
An invited presentation from the 2007 Edinburgh Conference on portfolio monitoring, management reporting and credit governance using the Basel infrastructure. Download PDF here.

Risk Management Principles, Gerard Scallan, 2002
Banking risk management includes all the activities and systems that contribute to: Assessing the risks resulting from its decisions, limiting this risk, balancing risk with commercial considerations to maximise long term profit and controlling the whole system, taking account of the bank's environment and strategic priorities. Download PDF here.

Credit Scoring: Data and Decisioning - What should scoring do for collections? Helen McNab, 2002
Presentation at the Tallyman Customer Partnership Conference, June 2002: Best Practice in Credit Management & CollectionsDownload PDF here.

Granting Credit to E-Customers, Peter Taylor, 2002. This brief is aimed at fraud control and credit strategy managers responsible for implementing internet-based credit products with financial institutions. Download PDF here.

Credit Scoring, Modelling and Data Issues, Gerard Scallan, 2001
Retail Credit Risk presentation to the British Bankers Association on the role of scoring in structuring existing data and the importance of data quality. Download PDF here.

Going to Market, Tony Masters and Anthea Wynn, 2000, This paper discusses the issue of how credit and marketing departments can learn to love one another and maximise profits. Download PDF here.

Bad Debt Projection Models, Gerard Scallan, 1998
This paper gives an overview of modelling approaches for loss forecasting and provisioning and discusses triangular projection models. Download PDF here.

Markov Models - An Introduction, Gerard Scallan, 1990
This paper introduced an effective new approach to bad debt projection; Markov models allow your company to take account of profit-line dynamics. Download PDF here