In October and November 2021, 13 teams from across EMEA and the UK took part in the SimRisk Classic event. They were challenged to compete with their industry peers in setting an Acquisitions strategy for a fictitious portfolio of Personal Loans.
In total, 65 delegates took part, with each team taking part in two 90-minute webinars. In each session, the teams worked with a driver from Experian who used the Assisted Strategy Design functionality of PowerCurve Strategy Management to segment and analysed the portfolio’s performance.
The results
In the first session, teams focused on the Accept/Decline decision, ensuring that the highest-risk customers did not open an account.
In the second session, the focus was on Loan Values and Interest Rates – allowing the accepted customers as large a Loan as was profitable and setting the most appropriate Interest Rate, balancing the revenue that was generated with the likelihood of taking the offer up.
After Round One, team “NorOne” (Nordea Bank from Norway) were in the lead, increasing the profit on their portfolio from £5.0mn to £6.56mn.
“Money Maker Managers” (UniCredit, Russia) and Sainsbury’s Bank (UK) were very close behind, with profitability levels of £6.51m and £6.47m, respectively.
In Round Two, the picture changed considerably. Generally, teams ahead after Round One were more cautious, wanting to avoid taking unnecessary risks.
Meanwhile, teams in the lower half of the leaderboard mostly took the approach of “Go Big or Go Home”, allowing much higher Loan Values.
The theory was that lower Loan caps restricted the number of customers taking up potentially-profitable accounts.
It was very interesting to see that the “RiskING Lions” team (a combined team from ING and Younited from Germany) had quite a debate about whether to be adventurous, but the consensus was to use caution.
Although the approach of setting high loan values was quite risky, it did actually pay off for many of the teams.
As a result, the final results were as follows:
The ultimate winners of the competition were the Money Maker Managers (UniCredit, Russia), who made £11.6m. This is the best result achieved to date on SimRisk Classic event.
Team Amex (UK), Team Italia, and the Absa EB Acquisitions were not far behind, generating £9.48m, £9.40m and £9.26mn, respectively.