Beyond The Numbers: Behavioural Insights in Credit Risk - Credit

This program challenges that assumption, revealing how human psychology biases, heuristics, intuition, and social pressures plays a critical role in lending decisions.

Participants will explore how both bankers and borrowers are influenced by cognitive traps, optimism, group dynamics, and other behavioural factors that can subtly shape credit outcomes.

Through a blend of theory, real-world case studies, and practical tools, the program demonstrates how to integrate behavioural insights with traditional risk assessment frameworks.

Topics include bias awareness, gut instinct versus evidence-based judgement, borrower psychology, credit culture, and behavioural nudges. By the end, participants will understand how to make credit decisions that are not only data-informed but also fair, responsible, and human-centric.

Programme Outline

Learning Objectives

By the end of the programme, participants will be able to:

Recognize how human biases influence credit decisions.
Balance intuition with data-driven analysis for better lending.
Assess borrowers beyond the numbers, including character and behaviour.
Apply behavioural nudges to guide smarter, safer credit choices.

Programme Outline

Session 1: | Introduction: Credit Risk Beyond Numbers
Why credit risk is more than numbers
Traditional risk assessment vs behavioural insights
Learning objectives for the day
Discussion: Share examples of when intuition or bias affected a decision
Session 2: The Bias Factor in Lending
Cognitive biases and heuristics: anchoring, framing, confirmation bias, overconfidence, groupthink
How biases manifest in loan approvals, risk rating, and portfolio management
Interactive Exercise: Spot the bias in sample credit case studies
Techniques to mitigate bias: checklists, second opinions, structured decision-making
Session 3: Gut Feel vs. Good Judgement
Intuition in banking: benefits and pitfalls
Distinguishing between instinct and prejudice
Role of experience in interpreting non-financial signals
Case Study: Real examples where gut feel prevented or caused losses
Tools for balancing intuition with evidence
Session 4: Assessing Borrowers Beyond the Balance Sheet
Sub-Topics:
The 5Cs revisited with a behavioural lens: Character, Capacity, Capital, Collateral, Conditions
Role of reputation, personal networks, and trustworthiness in repayment
Group Exercise: Analyze a borrower profile combining financial and behavioural indicators
Session 5: Predicting Borrower Behaviour
Sub-Topics:
Psychological drivers of borrowing: optimism, overconfidence, short-term focus
Behavioural warning signs of over-leverage and repayment risk
Influence of social pressure and financial literacy
Interactive Quiz / Scenario: Identify red flags in hypothetical loan applications
Session 6: Applying Behavioural Nudges
Sub-Topics:
Introduction to Nudge Theory: choice architecture, subtle interventions
Examples in banking: automatic reminders, structured decision prompts, clearer options
Designing nudges for borrower behaviour and internal decision-making
Hands-On Exercise: Create a nudge for improving loan repayment or internal approvals
Session 7: Integrating Numbers & Human Insight
Sub-Topics:
Combining quantitative models with qualitative judgement
Frameworks for holistic credit assessment
Scenario exercise: make a lending decision using financial metrics and behavioural insights

Discussion: Lessons learned and applicability in participants’ own work

METHODOLOGY

Powerpoint, videos, interactive, presentations/discussion, case-studies

Participant profile

Banking and Financial Services, Islamic Banking and Finance, Development Financial Institutions (DFIs), Credit Cooperatives, Microfinance Institutions, FinTech Lending Platforms, Insurance and Takaful Companies, and Organisations with Credit, Risk Management, or Financing Functions.

Trainer

Dr Lim Guan Chye

Director, Commercial Banking Training

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Dr Lim Guan Chye

Director, Commercial Banking Training

Dr Lim Guan Chye (Dr GC) is the Director of Commercial Banking Training at the Asian Banking School. He has 25 years of experience as a banker with several local and foreign banks in the capacity as Regional Manager and Branch Manager; and is well-versed with credit evaluation/assessment, banking operations, branch management and the legal aspects of banking.

Dr GC also has worked for 10 years in group companies including a public listed company in various senior management capacities such as Finance Director and Group General Manager. He is a life-long learner and is passionate about sharing his experiences in banking and business. He recently published his 2nd book entitled “The Quick Guide Series – About Business & Banking” in January 2021.

He is a Certified Credit Professional awarded by IBBM (now known as the Asian Institute of Chartered Bankers) and a certified trainer awarded by the Finance Accreditation Agency and HRDF (now known as HRD Corp).

Dr GC holds a 2nd Upper Honours Degree in Economics from the University of Malaya and a DBA from the EU Business School, Geneva in 2019.

In June 2023, Dr GC obtained his Chartered Banker MBA (CBMBA) – Pass with Merit from Bangor University, Wales. Apart from MBA, this achievement also bears membership status with Chartered Banker Institute, UK

His latest book entitled “Beyond The Numbers: Behavioural Insights in Credit Risks” is expected to be published in March 2026.