Assessing Credit Risk with Tableau
With everything from independent restaurants to large retailers closed, some individuals and businesses alike will not be able to pay their loans or rent in the coming months. This is just one indicator of how the U.S. economy is shifting under the stress of the COVID-19 pandemic. As the country responds, lending providers and governments are altering policies that will impact borrowers and accommodate changes (and stalls) in cash flows.
The challenge to financial institutions is to anticipate market forces and work rapidly to limit risk exposure before it impacts the bottom line. How much exposure do I have across my portfolio? Which businesses are impacted more than others? How are closures in key locations influencing credit? What long-term lending scenarios are on the horizon? Which of my small business lendees are trending towards delinquency?
One of our Financial Services clients knows that speed of response is vital: every minute without insights to course correct translates to lost capital. Their analysts and fund managers need to identify critical trends and insights that reveal how new borrowing behavior and policies will impact their credit risks — and they do not have time to wait for another report from IT.
But the challenges are daunting. Externally, policy surrounding the pandemic has proven to be extremely dynamic and shifts dramatically by location. Internally, many existing risk models lack the flexibility or granularity to pivot as quickly as the terms of the crisis demand. When the situation began to unfold, Tableau provided a platform to help them understand their data.
A suite of real-time Tableau dashboards allows risk management at the speed of sight, enabling them to shift strategy and anticipate economic impacts of the situation as it unfolds. With features like alerting and automated emails, executives can see insights directly in their inboxes. Importantly, the business is able to craft strategy using the same foundational data.
Portfolio Managers can use interactive functionality to easily see data at the level of detail they need — for example, country to state, or portfolio to assets — and focus on the details that create a clear picture of risks. The agility of this type of analysis not only enables them to make data-driven decisions, but also reduces time-intensive ad hoc research that otherwise would be submitted to a reporting backlog.
Importantly, their response allows them to communicate more effectively with concerned investors and partners. Using Tableau has already given them a clear line of sight on how the pandemic will affect their business, and enabled them to pivot their strategy accordingly.
Do you want to mitigate risks with better data insights? Let’s talk.
Jessica Minton is a data storyteller and analytics advocate with Slalom. She leads efforts to implement empowering analytics dashboards, manage enterprise Tableau Server environments, and train new users in Tableau. Her skills as a cartographer help her create impactful data visuals that support clients in an increasingly data-driven world. Reach her at jessicam@slalom.com.
