BOZEMAN, Mont. — Zoot, a provider of advanced instant credit decisioning and loan origination solutions, recently discovered that financial institutions are having a lot of difficulty with their credit risk policy development due to the quickly changing times.

More specifically, part of what the company calls troubling is that financial institutions surveyed are facing significant challenges because the length of time required to develop and implement a new credit risk policy is "ineffective in a rapidly changing economic climate."

Zoot's poll found that 93 percent of participants, or financial industry executives, indicated that it takes at least nine months to develop, test and deploy a credit risk policy concept.

Most of those who responded, or 64 percent, said this can take their institution 12 to 18 months. And in such rapidly changing conditions, these new policies can become outdated quickly, sometimes even before they can become implemented, according to Zoot officials.

"Zoot's poll showed that about half of the respondents share risk management resources across origination, servicing and collections, which is encouraging," pointed out Bobbie Britting, research director of consumer lending at TowerGroup.

"Simply restricting credit is not a sustainable practice, and to emerge from this crisis, preventing loss on the back end begins with knowing what to look for in originations. Paying careful attention to changes across the consumer credit life cycle and intervening in a timely manner will help minimize losses and possibly prevent accounts from becoming bad," she continued.

In response to the challenges, Zoot recently unveiled a new business solution called the Credit Risk Lab. This program can provide lenders the ability to "significantly" shorten the cycle of making changes to attributes and scorecards to determine what is most predictive in the current environment.

"The poll revealed that the majority of attendees are only reviewing credit policy yearly, if that. This ensures that they won't be able to adapt to changing conditions and will continue to loss money due to outdated credit risk models," explained Eric Lindeen, director of marketing at Zoot.

"When the market is constantly changing and new regulatory requirements are looming, financial institutions need to be able to respond quickly and implement new strategies that will be effective," he concluded.

For more information, visit www.zootweb.com.