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Early warning and leading indicators

The CRO asks: "What will our delinquency look like in three months, and what should worry me now?" Spot stress months before it shows in 90+.

8 steps · 10 tools (3 free) · for risk analysts at banks and NBFCs

Tools you will use

This playbook is free to read. The prompt for each step is inside its tool. See the Pro tools.

Schema profile builderFree

Definition libraryFree

Early warning indicator libraryRecovery and early warning

Mandate and bounce analysisCollections performance

Soft collections and reminder analysisCollections performance

Roll rate and flow rate matrixFree

Watchlist and trigger automationRecovery and early warning

Month-on-month anomaly detectionDelinquency and loan tape

Leading-indicator dashboardRecovery and early warning

Chart choice and dashboard designReporting and communication

Check these first

Each tool asks the same questions and gives you a prompt to build whatever is missing.

Loan tape with DPD for each account and month?

Have itAlready calculatedDon't have it

Repayment mandate and bounce data?

Have itDon't have it

Collections contact data?

Have itDon't have it

The steps, in order

Each step names the tool to open.

Set up

Tell the tools your table names

Tape, mandates, collections contacts.

FreeSchema profile builderFreeDefinition library

Find the signals

Build the indicator library

Early payment default, bounces, partial payments, rising enquiries.

Early warning indicator library

Mandate and bounce analysis

Which bounces predict later default.

Mandate and bounce analysis

Soft collections and reminder response

How accounts react to early reminders.

Soft collections and reminder analysis

Roll rates

The oldest leading indicator, done properly.

FreeRoll rate and flow rate matrix

Set triggers

Watchlist and trigger rules

Who gets flagged, and what happens next.

Watchlist and trigger automation

Scan for odd jumps

Catch faults and real shifts early.

Month-on-month anomaly detection

Deliver

Leading-indicator dashboard

A one-screen view with thresholds and owners.

Leading-indicator dashboardChart choice and dashboard design

Check before you send

Each indicator is tested against later delinquency, not chosen on instinct.
Thresholds are set on past data and you state the period.
Every flag has an owner and an action.
Indicators are measured the same way every month.

Warning signs

An indicator moves but nothing follows: it may be noise. Test lead time.

Too many flags: nobody acts. Keep the list short.

What you hand over

A leading-indicator dashboard with thresholds, owners and a trigger list for the collections team.

In your profile

Once you are signed in, your profile shows which steps you can run with the tools you own, and which tools you still need.

Other playbooks

Monthly portfolio review Delinquency tracking Underwriting policy change Bureau data and scoring checks Scorecard build Model validation Collections strategy and agency performance Fraud and first-payment-default review Provisioning and ECL RBI reporting and asset classification Loss budget and stress testing Board and risk committee pack