The blog discusses the transformative impact of an “Early Warning System using Data Cloud” in risk management. By leveraging cloud-based data analytics, this system proactively identifies risks and notifies risk managers, enhancing decision-making and organizational resilience. The blog highlights the current landscape of risk management, emphasizing the importance of timely risk alerts and the benefits of integrating comprehensive data sources for improved risk assessment.
Abstract
Explore the paradigm shift in Risk management with “Early Warning system using data cloud”. This technical abstract delves into harnessing the power of cloud-based data analytics for proactive risk identification and timely notification to Risk manager. Discover how this innovative approach enhances decision making processes, mitigates potential threats and fortifies organizational resilience in an ever-evolving landscape.
Problem Statement
Explore the paradigm shift in Risk management with “Early Warning system using data cloud”. This technical abstract delves into harnessing the power of cloud-based data analytics for proactive risk identification and timely notification to Risk manager. Discover how this innovative approach enhances decision making processes, mitigates potential threats and fortifies organizational resilience in an ever-evolving landscape.
Background
As a Salesforce implementation product, we have created KYC framework for multiple products like Credit Card, Mortgage, Saving Account and SME Lending. In CRM we are capturing customer KYC and completing customer sales cycle and handing it over to LMS system for loan disbursement. In this complete process, Underwriter & Risk Manager are not getting any risk portfolio alert before and after Loan amount disbursement. To address this challenge using Data Cloud, we are capturing customer’s 360-degree information from multiple systems like Salesforce and other external 3rd party systems like Credit Bureaus, payment processer, FinTech firms, Market research firm and core banking systems that track transactions and ingest in data lake like AWS S3, etc., assessing risk based on a risk scoring model, and notifying Risk Managers if Customer portfolio is at Medium or High Risk
SolutionTo create risk notification for Risk manager, implemented following steps:
To create risk notification for Risk manager, implemented following steps:
Step 1: Connect Salesforce application with Data Cloud instance for creating Customer profiles in Data Cloud
Step 2: Create data stream and data lake objects in data cloud to Ingest Customer profile data from Salesforce loan application instance to Data Cloud instance.
Step 3: Create data stream and data lake objects in data cloud to Ingest loan applications data from Salesforce instance to Data cloud instance.
Step 4: Create data stream and data lake objects in data cloud to Ingest risk data points from external data lake source instance to Data cloud instance.
Step 5: Create Data Model Object (DMO) in Data Cloud to map DLO objects with standard Account, Opportunity and Custom Risk object
Step 6: Create formula fields in Risk DMO to calculate Risk level (Low, Medium, High) based on multiple risk data points.
Step 7: Create Batch Data transform to consolidate risk data based on customer and Credit risk data and filtered data based on Medium and High risk which needs to be sent to KYC framework for alert notification.
Step 8: Create Data action to publish DMO objects in salesforce instance.
Step 9: Create Data action target to publish Credit Risk data along with customer information from data cloud instance to Salesforce instance.
Step 10: Create flow in loan application instance on DataChangeDataObj object to read platform event instance.
Step 11: Create apex class to read JSON data and return it to flow builder to create case and custom notification for risk manager
Step 12: Create case using flow builder and custom notification for risk manager for medium and high credit risk so that Risk manager can check customer portfolio and take necessary action.
Potential Benefits:
To create risk notification for Risk manager, implemented following steps:
Step 1: Connect Salesforce application with Data Cloud instance for creating Customer profiles in Data Cloud
Step 2: Create data stream and data lake objects in data cloud to Ingest Customer profile data from Salesforce loan application instance to Data Cloud instance.
Step 3: Create data stream and data lake objects in data cloud to Ingest loan applications data from Salesforce instance to Data cloud instance.
Step 4: Create data stream and data lake objects in data cloud to Ingest risk data points from external data lake source instance to Data cloud instance.
Step 5: Create Data Model Object (DMO) in Data Cloud to map DLO objects with standard Account, Opportunity and Custom Risk object
Step 6: Create formula fields in to calculate Risk level (Low, Medium, High) based on multiple risk data points.
Step 7: Create Batch Data transform to consolidate risk data based on customer and Credit risk data and filtered data based on Medium and High risk which needs to be sent to KYC framework for alert notification.
Step 8: Create Data action to publish DMO objects in salesforce instance.
Step 9: Create Data action target to publish Credit Risk data along with customer information from data cloud instance to Salesforce instance.
Step 10: Create flow in loan application instance on DataChangeDataObj object to read platform event instance.
Step 11: Create apex class to read JSON data and return it to flow builder to create case and custom notification for risk manager
Step 12: Create case using flow builder and custom notification for risk manager for medium and high credit risk so that Risk manager can check customer portfolio and take necessary .
Conclusion
Once customized as per a bank’s needs, the Early Warning System can effectively minimize the probability of customer defaults. It can provide timely assistance and guidance to SMEs facing difficulties helping them potentially avoid default and drive operational efficiency banks. Lenders can constantly monitor risk emerging from industry-specific performance indicators. It enables a Risk Manager to effectively manage huge volumes of portfolios. These systems can track performance metrics, and provide transparency in credit risk management practices, ensuring adherence to regulatory guidelines.
References
https://help.salesforce.com/s/articleView?id=sf.customer360_a.htm&type=5
