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- segmentation has not already been performed in the source and has not been delivered from a source
- a heterogenous portfolio requires the application of various statistical methods for ECL for Expected Credit Loss calculation
In FlexFinance segments can be configured taking criteria such as product type, cost center, type of customer, customer rating etc. into account.
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- selecting and applying the appropriate ECL appropriate Expected Credit Loss model including PD, LGD and EAD as well as
- considering the historical default information that is linked to the segment.
For example: if a segment "retail loans" and a segment "corporate loans" are considered during ECL during Expected Credit Loss calculation, segment-specific historical default information should be used for the calculation of PD and LGD.
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On the basis of the combination of segment and stage, the appropriate parameters for ECL for Expected Credit Loss calculation can be identified, taking the availability and relevance of performance data into account. For details about stage assignment, please refer to Stage Assignment.