What is External Credit Risk Assessment Approach in SAP FS-BA-PM-CR - Credit Risk?

SAP Term: External Credit Risk Assessment Approach

• Component: FS-BA-PM-CR

• Component Name: Credit Risk

• Description: An approach for banks incorporated in jurisdictions that allow the use of external ratings for regulatory purposes. As opposed to the Standardised Assessment Approach SCRA.

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• Key Concepts: 
  External Credit Risk Assessment Approach is a component of the Credit Risk Management module in SAP. It enables companies to assess the creditworthiness of their customers and manage their credit risk exposure. The approach uses external data sources such as credit ratings, financial statements, and other financial information to assess the creditworthiness of customers. 
  
  How to use it: 
  The External Credit Risk Assessment Approach can be used to assess the creditworthiness of customers by analyzing external data sources such as credit ratings, financial statements, and other financial information. The approach can also be used to monitor customer credit risk exposure and set appropriate limits for each customer. 
  
  Tips & Tricks: 
  When using the External Credit Risk Assessment Approach, it is important to ensure that the data sources used are reliable and up-to-date. Additionally, it is important to regularly review customer credit risk exposure and adjust limits accordingly. 
  
  Related Information: 
  The External Credit Risk Assessment Approach is part of the Credit Risk Management module in SAP. Other components of this module include Internal Credit Risk Assessment Approach, Credit Limit Management, and Credit Exposure Monitoring.