Predictive analytics in play at BCU
The suburban Chicago shop is building out models to prepare for a surge in delinquencies and charge-offs.
BCU ($4.0B, Vernon Hills, IL) is honing its skills in predictive modeling as the SEG-based cooperative tracks and acts on financial issues COVID-19 is posing among its far-flung membership.
John Sahagian, BCU’s chief data officer, says the credit union currently is focused on getting ahead of an anticipated surge of delinquencies and defaults that would follow the expiration of deferrals, pay skips, and mortgage forbearances as well as the end of increased unemployment benefits paid out as part of the CARES Act.
“We’re developing a model to show the likelihood of a loan to enter default,” Sahagian says. “We’re also working to strengthen predictive models we already have for early-stage delinquencies rolling to advanced collections and for recovery likelihood of charged-off loans. These efforts are still a work in progress, but we’re excited about their potential in allowing us to focus our finite resources where they can have the greatest impact.”
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