Product Description

This book provides detailed explanation of the methods used by financial services organizations to manage their consumer credit portfolios for products such as credit cards, personal loans and retail credit agreements. It describes how credit-granting institutions operate and discusses the relationship between the strategic objectives set by senior management and the operational strategies employed by credit professionals working at the coal face of credit provision. Topics covered include organizational structures, marketing, customer acquisition, credit scoring, customer management, collections, debt recovery, legal and ethical issues, provision and capital requirements under BASEL II.  Written from an international perspective it provides a unique insight into the world of credit management, combining both academic and practitioner viewpoints. Complex topics are described in an easy to understand way, with technical language kept to a minimum, making specialist topics, such as credit scoring and BASEL II, readily accessible to the general reader.

Product Details

• Amazon Sales Rank: #446811 in Books
• Published on: 2008-04-04
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 256 pages

About the Author
STEVEN FINLAY is an expert in credit risk management, with more than ten years experience within the financial services industry, working with some of the world's leading financial services organizations. He is currently a research fellow at Lancaster University, UK. He has also published Consumer Credit Fundamentals with Palgrave Macmillan.

Customer Reviews

The best introduction for new entrants
This useful book provides a comprehensive introduction to the consumer credit industry and it's practices. It largely eschews the mathematical side of practice, although the author provides a useful appendix that presents some of the maths behind predictive models of consumer behaviour, mostly scoring and segmentation models. He claims that reading it requires undergraduate Maths, but I couldn't find much beyond what would be known to someone with A-level Statistics, the most advanced concepts being the scalar product of two vectors and the notion of covariance. More advanced techniques for statistical forecasting, optimization, simulation, and Markov models (for provisioning) are mentioned but no maths is presented.

The author provides much good practical advice, clearly based on his experience. E.g. he questions the wisdom of separating the marketing and risk functions within a company, pointing to the potential disasters that can follow. The book is pleasingly up-to-date despite being written before the effects of the sub-prime fiasco were so plainly evident, again evincing the author's industry involvement. His wisdom includes the wonderfully understated and prophetic: `There is also a tendency to be driven by short term goals focused on recruiting large numbers of new customers quickly, without sufficient thought being given to more strategic objectives based on long term profitability.'

There are a few minor faux pas; for example, a slightly flawed explanation of the concept of NPV, which is said to be based on inflation rather than interest rates, and a confusion over the use of `statistical techniques' and data mining. A glossary of terms and unexpanded abbreviations, such as APACS and IRB, would have been a useful addition to this text.

Highlights for me included a quite fascinating insight into the messages that fly around when one uses a credit card and a refreshingly concise explanation of the Basel II accord on capital adequacy.

I think the book could be ideal as the basis for a module on credit management within a Business Studies curriculum or for an induction course for new entrants to the industry. In fact, I began to feel, from the style, that much of it may have originated as a slide show for just such training. It is the ideal introduction to the topic for the less mathematically minded or for student who will go on to study the Maths later.