The data audit will highlight any gaps in each mortgage lender’s data capture and retention processes and determine what data items will need to be captured under a compliant regime. Once complete, the data audit will provide an independent opinion whether each lender needs to pool mortgage data in order to accurately calculate capital adequacy.
Commenting on the data audit, Keith Hale, associate director of Scorex, said: “Advanced IRB status offers lenders great opportunities to release capital currently held against potential losses. Every lender, large or small, will want to take advantage of such opportunities to gain a competitive advantage. But while every lender will want to achieve advanced status, no one really knows exactly how this will happen. By supporting lenders to meet compliance stage by stage we’re able to offer a more considered approach. For instance, once the data audit is complete lenders can decide if they need to pool data, or assess behavioral scoring.”
Malcolm Sinclair, The Derbyshire,added: “The society is keen to work with Scorex given its significant experience in data management and analysis. The Derbyshire aspires to 'be the best' and therefore sees the challenges of achieving IRB status as significant, but believe undergoing the process itself will help us understand and manage our evolving business in a more focused and profitable manner."
The data audit Scorex intends to carry out will involve an analysis of the application and customer performance data, so that a profile can be developed of different customer groups and their typical behavior.
Scorex will then provide a list of a all the fields required for Basel compliance, a summary of the processing rules for each field, a list of “problem” criteria, an estimation of the volumes of data each lender will need and a report on the available data and requirements for “through the cycle” normalisation.
