Customer Migration Matrix

The Belgian scorecard is live!

Gain insight via an infographic overview on the changes of the Belgian companies

Creditsafe is continuously working on perfecting its credit scores, using the latest knowledge in the field of statistical scoring methods, optimising and maximising the use of the ever-expanding database. This improves the way companies are scored, enabling better and more predictive assessments of a growing number of companies. The essential concept behind Creditsafe's scoring approach is to accurately predict the behaviour of companies (in terms of their good/bad performance over the next 12 months) using a set of characteristics that clearly indicate why a company can be considered high or low risk.

A 'Migration Matrix' allows us to visualise in a single table the impact of the new score. Below a visualisation of the changes on the Belgian landscape (*):

Out of the 1.7 million active Belgian companies, 51,56% of companies saw an increase of their international score category; 36,8% stayed in the same category; and 11,63% saw a decrease in their scoring category.

By change of risk category we mean, for example, a change from an international A rating to an international B rating. By maintaining the international score, we mean staying in the same category. Of course, it is possible that the local Belgian rating may have changed, for example from a 98 to a 95 score. According to the logic of this example, this company still belongs to the same international rating category (being an A international rating). In other words, in this example, there is no change

Interpretation of the migration matrix

The illustration above shows the change in risk score indication on the active Belgian business population, who are obliged to file annual accounts. A comparison is therefore shown here from the old score indication to the new score indication. Such migration matrices illustrate the movements that the selected population makes between the different risk intervals (based on the PoD indicator), where the estimated risk of the two different score cards is considered and how the shift is represented.

What do we observe?

On the horizontal axis above, we see the new Belgian score indications that belong to the different international risk ratings from A to D. On the first vertical axis we see the old Belgian score indications related to the new PoD score intervals. Based on the new scorecards, companies with a score between 71 - 100, belonging to the lowest risk, will have a maximum PoD of 0.24%. In order to find the corresponding risk level in the old scorecard, the companies could not have a score lower than 96 to belong to this indication or rating.

How to interpret the percentages?

By analysing the matrix row by row, you can form a better understanding of the movements the companies make from the old score indication to the new indication. We use 3 different colors to show the effect of the change. The grey color means that there is no change of risk class. The green color, which will always be to the left of the grey indication, means that there is a positive impact. The new scorecard indicates that these companies have a lower PoD percentage, giving them a lower risk rating. The red color, which will always be to the right of the grey indication, means that there is an increased risk compared to the old score. The new scorecard indicates that these companies obtain a higher PoD percentage, giving them a higher risk rating

How to understand this migration matrix?

65% of the companies (filing annual accounts) that had at least a score of 96 in the old model remain in the highest (A) rating. In other words, this percentage remains in the same risk category, namely very low risk.
31% of the companies (that file annual accounts) that had at least a score of 96 in the old model now have a B rating. In other words, this percentage shifts to a new risk category, namely low risk.
3% of the companies (that file annual accounts) that had at least a score of 96 in the old model are now rated C. In other words, this percentage shifts to a new risk category, namely medium risk.
0% of companies (that file annual accounts) that had at least a score of 96 in the old model are now rated D. In other words, we do not see a shift from very low risk (in the old scorecard) to high risk (in the new scorecard).

Obtaining a personalised score matrix in 4 easy steps

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Due to the manual processing by our in-house data team and the many requests for such an analysis, please take into account a delivery period of 10 to 20 working days.
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Please note: the data you obtain is current up to the creation date of the analysis, as this analysis is a snapshot of that specific moment. Creditsafe cannot be held responsible for any changes after the analysis has been performed.