Linking Entity Resolution and Risk
A major emerging problem among consumer finance institutions is that customers that are not well recognized might be riskier than customers that are fully recognized. Fortunately, financial institutions count with external vendors databases that indicate the level of recognition of their customers. However, this information is normally presented as features with partial scores that must be aggregated into an overall matching accuracy score. This score indicates how similar a record is to a master database that contains the best available public information about a specific customer. In addition, information management and risk management departments of financial institutions may have very different models. Hence, it is necessary to connect the customer recognition information with risk models. This paper studies this problem in two parts: (1) generation of a matching accuracy score to quantify the status of entity resolution between consumer records of a major financial company and an external database, and (2) evaluation of the relationship between the matching accuracy score and several risk segments. As a final result, an overall matching accuracy score is obtained for every customer using the most current account information and a learning algorithm. The matching accuracy score is an indicator of the level of customer recognition. This matching accuracy score is correlated with the FICO score (FICO is a risk score generated by the company Fair Isaac & Co. The maximum value of FICO is 850. In this paper, values above 720 are considered Superprime, between 661–719 are Prime, 600–660 are Near Prime, and less than 600 or not available are Subprime).
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 37 (2011)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.palgrave-journals.com/|
|Order Information:|| Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK|
Web: http://www.palgrave-journals.com/pal/subscribe/index.html Email:
When requesting a correction, please mention this item's handle: RePEc:pal:easeco:v:37:y:2011:i:1:p:150-164. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Daniel Foley)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.