Optimizing Credit Limit Increase for a Leading Bank
Overview
A leading bank aimed to enhance its credit limit increase process by identifying low-risk customers with a strong credit history. The goal was to strategically offer higher credit limits while effectively managing risk exposure.
Solution
- Data-Driven Approach: Integrated internal credit history, credit bureau data (credit scores, loans, and other bank card data), and off-us income data at the customer level.
- Advanced Analytics: Applied decision tree models to assess customer eligibility and benchmarked against other banks’ credit limits.
- Process Optimization: Standardized data collection, cleaning, and analysis, conducting evaluations biannually and on an ad hoc basis.
Impacts
Increased Customer Engagement – Higher credit limits led to increased spending and improved customer loyalty.
Revenue Growth – Enhanced credit card usage boosted revenue from interest and transaction fees.
