AI-Powered Risk Scoring for Banking: Predict Risk, Prevent Losses, and Approve with Confidence
Stop relying on outdated scorecards. Our custom AI models analyze thousands of data points in real-time to deliver precise, explainable, and compliant risk assessments that drive smarter, faster, and more profitable lending decisions.
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The Certainty You Need in an Uncertain Market
We don't just build AI models; we deliver measurable outcomes. Our approach combines deep financial expertise with cutting-edge technology to create risk scoring solutions that are not only powerful but also practical, compliant, and built for the future of banking.
Regulatory-Ready Explainable AI (XAI)
We build transparent AI models using frameworks like SHAP and LIME. This means you get clear, human-readable justifications for every credit decision, satisfying regulators and building trust with stakeholders.
Seamless Core System Integration
Our API-first development ensures our AI solutions plug directly into your existing Loan Origination Systems (LOS) and Core Banking Systems (CBS) with minimal disruption, accelerating your time-to-value.
Bank-Grade Security & Compliance
As a CMMI Level 5, SOC 2, and ISO 27001 certified partner, we embed enterprise-grade security and data privacy (GDPR, CCPA) into the DNA of every solution we build. Your data and your customers' data are always protected.
Proven ROI and Performance
Our solutions are designed to deliver tangible results: reduced credit losses, lower operational costs, and increased revenue from faster, more accurate loan processing. We focus on models that directly impact your bottom line.
Deep Financial Domain Expertise
Our team isn't just data scientists; they are financial technology experts who understand the nuances of credit risk, regulatory landscapes, and banking operations. We speak your language and solve your specific challenges.
Future-Proof, Scalable Architecture
We build solutions on modern, scalable cloud platforms, ensuring your risk scoring capabilities can grow with your portfolio and adapt to new data sources and evolving market conditions without costly re-engineering.
Mastery in Alternative Data
We go beyond traditional credit data, integrating alternative sources like transactional data, rental history, and utility payments to build a more holistic and predictive view of borrower risk, especially for thin-file applicants.
Bias Detection and Mitigation
We proactively design and test our models to identify and mitigate algorithmic bias, helping you ensure fair lending practices and comply with regulations like the Equal Credit Opportunity Act (ECOA).
End-to-End Partnership Model
From initial strategy and data readiness assessment to model development, deployment, and ongoing performance monitoring, we act as your dedicated partner, ensuring long-term success and continuous improvement.
Our AI-Powered Risk Scoring Services
We offer a comprehensive suite of services to transform your risk management framework. Each service is tailored to address specific challenges within the credit lifecycle, from origination and underwriting to portfolio management and compliance.
Custom Credit Scoring Model Development
Move beyond generic, one-size-fits-all scorecards. We design, build, and deploy bespoke machine learning models that are finely tuned to your specific lending products, target market, and risk appetite. Our models learn from your data to deliver superior predictive accuracy.
- Increased Predictive Power: Leverage advanced algorithms (like Gradient Boosting, Random Forests, and Neural Networks) to identify complex, non-linear patterns that traditional models miss.
- Reduced Default Rates: More accurately segment high-risk applicants from creditworthy ones, directly leading to a healthier loan portfolio and lower charge-offs.
- Faster Loan Approvals: Automate decision-making for a significant portion of applications, reducing manual underwriting time and improving the customer experience.
AI-Powered Fraud Detection & Prevention
Stay ahead of evolving fraud schemes with real-time, AI-driven detection systems. We build models that analyze transactional data, user behavior, and network patterns to identify and flag suspicious activities at the point of application and throughout the customer lifecycle.
- Real-Time Threat Identification: Detect application fraud, identity theft, and account takeovers as they happen, not after the fact.
- Reduced False Positives: Our models are trained to distinguish between legitimate and fraudulent behavior with high precision, minimizing friction for genuine customers.
- Adaptive Learning: The system continuously learns from new fraud patterns, ensuring your defenses remain effective against emerging threats.
AI-Enhanced Portfolio Stress Testing
Understand how your loan portfolio will perform under various macroeconomic scenarios. We use AI to simulate the impact of events like interest rate hikes, economic downturns, or industry-specific shocks, providing you with the foresight to manage capital adequacy and mitigate risk proactively.
- Dynamic Scenario Analysis: Go beyond static historical analysis by modeling complex, forward-looking economic scenarios with greater accuracy.
- Improved Capital Allocation: Gain a clearer understanding of potential losses to optimize capital reserves and meet regulatory requirements (e.g., DFAST, CCAR).
- Proactive Risk Mitigation: Identify vulnerable segments within your portfolio before a crisis hits, allowing you to implement targeted mitigation strategies.
Regulatory Compliance Automation (CECL/IFRS 9)
Automate and enhance the accuracy of your loss provisioning calculations. We develop AI models that provide more precise, forward-looking estimates of expected credit losses (ECL), ensuring compliance with CECL and IFRS 9 standards while reducing manual effort and operational risk.
- Enhanced ECL Accuracy: Utilize machine learning to incorporate a wider range of economic forecasts and borrower-specific data for more reliable loss predictions.
- Streamlined Reporting: Automate the data aggregation, modeling, and reporting processes required for regulatory disclosures, saving time and reducing errors.
- Auditable Model Governance: We provide comprehensive model documentation, validation reports, and explainability dashboards to support internal and external audits.
Alternative & Unstructured Data Integration
Unlock the predictive value in data you already have or can access. We build the infrastructure and models to ingest, process, and analyze alternative data (e.g., bank transaction data, utility payments) and unstructured data (e.g., customer service notes, loan applications) to create a richer, more accurate risk profile.
- Expand Your Market: Safely lend to "thin-file" or "no-file" customers who are invisible to traditional credit bureaus, opening up new revenue streams.
- Holistic Risk Assessment: Gain a 360-degree view of an applicant's financial health and stability, leading to more informed and robust lending decisions.
- Competitive Differentiation: Leverage unique data sources to build a proprietary underwriting advantage that competitors cannot easily replicate.
Real-World Impact: How We Drive Results
We measure our success by the success of our clients. Explore how we've partnered with financial institutions to transform their risk management capabilities and achieve significant, measurable improvements.
Regional Bank Reduces Auto Loan Defaults with Custom AI Model
Industry: Retail Banking
Client Overview
A mid-sized regional bank with a $2 billion auto loan portfolio was experiencing higher-than-average default rates compared to its peers. Their traditional, FICO-based scorecard was failing to identify at-risk borrowers in a changing economic climate, leading to significant charge-offs that impacted profitability.
- Ava Harrington, Chief Credit Officer, Community Financial Group
Key Challenges
- Static risk models unable to adapt to new market dynamics.
- Over-reliance on traditional credit bureau data.
- Lengthy manual review process for borderline applications.
- Inability to accurately price risk for different borrower segments.
Our Solution
We partnered with the bank to develop a custom gradient boosting model trained on their historical loan data, augmented with anonymized transaction data and local economic indicators.
- Developed an XAI dashboard to provide underwriters with clear reasons for each risk score.
- Integrated the model via API into their existing loan origination software.
- Created a champion-challenger framework to test the AI model against the legacy scorecard in real-time.
- Provided comprehensive training and documentation for the credit and underwriting teams.
FinTech Lender Triples Application Throughput with Automated Underwriting
Industry: FinTech & Digital Lending
Client Overview
A fast-growing online lender specializing in personal loans was struggling to scale. Their manual underwriting process created a bottleneck, leading to slow decision times and a high application abandonment rate. They needed to automate decisions without increasing their risk exposure.
- Blake Finnegan, CEO, SwiftDime
Key Challenges
- Inability to process a high volume of applications quickly.
- Inconsistent decisions from a growing team of underwriters.
- High operational costs associated with manual reviews.
- Losing customers to faster, more agile competitors.
Our Solution
We developed a multi-layered AI decisioning engine that integrated alternative data sources like cash flow analysis and digital footprint data.
- Built a primary model for instant "approve/decline" decisions on clear-cut applications.
- Developed a secondary model to flag borderline cases for expedited manual review with AI-generated insights.
- Integrated real-time fraud detection to automatically filter out high-risk applications.
- Deployed the solution on a scalable cloud architecture to handle fluctuating application volumes.
Investment Bank Enhances Counterparty Risk Assessment with NLP
Industry: Investment Banking
Client Overview
A global investment bank needed a more dynamic way to assess counterparty credit risk. Their existing process relied on periodic reviews of financial statements and credit ratings, which often lagged behind real-world events and market sentiment.
- Henry Coleman, Managing Director, Global Markets
Key Challenges
- Static risk assessments that missed emerging threats.
- Information overload from news, regulatory filings, and market data.
- Difficulty in quantifying the impact of qualitative information.
- Delayed response to negative news events affecting counterparties.
Our Solution
We built a sophisticated Natural Language Processing (NLP) solution that continuously monitored and analyzed vast amounts of unstructured text data related to the bank's counterparties.
- Developed custom NLP models to analyze sentiment, extract key risk events, and identify emerging themes from news articles, SEC filings, and earnings call transcripts.
- Created a real-time alerting system that notified risk managers of significant negative developments.
- Designed a "Counterparty Health Score" that combined traditional financial metrics with the new NLP-driven insights.
- Visualized the data in an interactive dashboard, allowing analysts to drill down into the source documents.
Our Technology & Tools
We leverage a best-in-class technology stack to build robust, scalable, and secure AI risk scoring solutions. Our expertise spans across leading cloud platforms, MLOps frameworks, and data science libraries.
What Our Clients Say
Trust is earned through results. Hear directly from financial leaders who have partnered with us to revolutionize their approach to risk management.
"The AI model Errna developed gave us a level of predictive accuracy we didn't think was possible. We're now identifying risk factors we were completely blind to before, which has fundamentally improved our underwriting process."
"Working with Errna was a strategic partnership, not a vendor transaction. They took the time to understand our unique business challenges and delivered a solution that was perfectly tailored to our needs. The level of expertise and professionalism was exceptional."
"The explainability features were critical for us. Errna didn't just give us a 'black box' model; they gave us a transparent tool that our underwriters and regulators could trust. This was key to getting internal buy-in and ensuring compliance."
"The integration process was surprisingly smooth. The Errna team worked seamlessly with our in-house IT department to connect the AI engine to our core banking system. We were live and seeing value much faster than we anticipated."
"Beyond the technology, the strategic guidance was invaluable. They helped us rethink our data strategy and identify new opportunities for leveraging analytics across the business. They are true partners in innovation."
"The impact on our fraud prevention has been immediate and significant. The real-time detection model has already saved us from several potentially large losses. The ROI was clear within the first quarter of deployment."
Frequently Asked Questions
Have questions? We have answers. Here are some of the most common inquiries we receive from financial institutions considering AI for risk scoring.
This is a critical aspect of our methodology. We specialize in Explainable AI (XAI). We use techniques like SHAP (SHapley Additive exPlanations) and LIME (Local Interpretable Model-agnostic Explanations) to break down every decision the model makes. For any given loan application, we can show you exactly which factors (e.g., income, debt-to-income ratio, transaction history) contributed to the final risk score and by how much. This creates a clear, auditable trail that satisfies regulatory requirements for model transparency and fairness.
The timeline varies depending on the complexity of the model and the state of your data, but a typical engagement follows a phased approach. A Proof of Concept (PoC) can often be completed in 8-12 weeks. A full production-level deployment, including integration with your core systems, usually takes 4-6 months. We prioritize a rapid time-to-value, often starting with a specific use case to deliver measurable results quickly before expanding.
The more relevant data, the better. At a minimum, we typically start with historical loan application data (approved and denied) and loan performance data (e.g., payment history, defaults, charge-offs). To enhance the model, we can incorporate internal data like customer transaction history, and external data sources such as traditional credit bureau data, alternative data (rent, utilities), and macroeconomic indicators. A key part of our initial phase is a data readiness assessment to identify and prepare the most valuable data sources.
Security is paramount. We are CMMI Level 5, SOC 2, and ISO 27001 certified, adhering to the highest standards for data protection. Our solutions can be deployed within your own secure cloud environment, ensuring you maintain full control over your data. All data is encrypted in transit and at rest, and we work closely with your security and compliance teams to ensure our solution meets all your internal policies and external regulatory requirements like GDPR and CCPA.
We establish clear KPIs from day one. The ROI is measured through several key metrics: 1) Reduction in Credit Losses: The direct financial saving from lower default and charge-off rates. 2) Operational Efficiency: Cost savings from automating manual underwriting and review processes. 3) Increased Revenue: Higher loan volume from faster approvals and the ability to safely lend to new market segments. We help you build a business case and track these metrics to demonstrate tangible value.
Yes, deployment is just the beginning of our partnership. We provide comprehensive post-deployment support, including continuous model monitoring to detect performance degradation or "model drift." We establish a governance framework for periodic retraining and recalibration of the model to ensure it remains accurate and effective as market conditions and customer behaviors change. We offer flexible support and maintenance packages to fit your needs.
Ready to Revolutionize Your Risk Management?
Let's discuss how our AI-powered risk scoring solutions can help you reduce defaults, increase efficiency, and gain a decisive competitive edge. Schedule a free, no-obligation consultation with our financial AI experts today.
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