Collections & Recovery Buying a Collections System – What Vendors Won’t Tell You #4

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This is question 4 in your handy guide to shopping for a collections system. I’m offering 10 tips — things most vendors won’t tell you that are absolutely critical to selecting the right system. What features I currently have will need custom development? While many of the features you require may be available in a new system, don’t expect them to all be there. For example, you might be limited to the number of status codes you have on an account in some systems. A complete review is necessary to improve processes and ensure all business needs are met in the new architecture. Lists and descriptions make this process much more productive. Over time, custom development affects all aspects of the day-to-day functions of a mature system. Documenting these modifications to the existing debt collection solution is essential. It’s common practice to contract with vendors to make changes to the... [Read More]

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Risk & Compliance Home Mortgage Disclosure Act Requires Fast Start and Stamina

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For mortgage professionals still recovering from clearing the latest compliance hurdle, it is time to lace up for the next challenge—the Home Mortgage Disclosure Act (HMDA) decathlon. Less than two weeks after the compliance deadline for the TILA-RESPA Integrated Disclosure (TRID) rule, the CFPB issued its final rule revising HMDA (Regulation C). Expansive changes to the rule mean mortgage lenders don’t get much of a compliance breather, despite an effective date that for many is still nearly two years away. Adopted in 1975, HMDA requires certain mortgage lenders to collect and report a wide array of home loan application information. This information was intended to help assess whether lenders were serving the housing needs of communities. In addition, HMDA data is an integral focus for the Department of Justice and Consumer Financial Protection Bureau (CFPB) in identifying red-lining and other fair lending violations. The Dodd-Frank Act directed the CFPB to... [Read More]

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Customer Engagement How China Minsheng Bank Moved to Instant Credit Decisions

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The China Financial Certification Authority expects that mobile banking customers will account for around 24% of the total e-banking users in 2015, and that 40% of those will buy financial products through their smartphones. China Minsheng Bank wanted to take advantage of this consumer trend in China towards e-services and grow its market share of 20 million credit cards by automating its approval process. Using FICO® Blaze Advisor® decision rules management system to manage its risk management models and automate decisions, China Minsheng Bank has built a system that allows consumers to apply for credit cards using either online or mobile channels and receive an instant approval decision. So far, in just over a year, the bank has received more than 3.5 million applications through online channels, with an online automated processing rate of up to 85% (measured monthly) and decisions delivered to customers within three minutes. The bank also... [Read More]

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Fraud & Security Is AI Wrong for Cybersecurity?

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I’ve just participated in a debate over analytics vs. encryption for cybersecurity, on the InformationWeek Dark Reading website. This is a sign of the times — the cyber space is so hot that technologies are being treated as rivals, jockeying to win your infosec budget. The truth is, it isn’t an either/or proposition. As I note in my article, arguing against encryption would be a bit like arguing against locks on doors. Strong encryption – like firewalls and user authentication – is a basic defense against the damage that might flow from a successful attack on information infrastructure. But encryption is not foolproof, and it shouldn’t be your one means of defense. As artificial intelligence and analytics have come into play, there has been some criticism — often from competing vendors who misunderstand or misrepresent how AI works. In the past, cybersecurity analytics were focused on gathering data about compromises,... [Read More]

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Customer Engagement I’d Like to Buy the World a Better Decision

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Sometimes when I look around, it seems as though all I see are the charred remains of terrible choices—and that’s before I’ve even left my kitchen. In business, it’s now been 30 years, yet Coca-Cola will NEVER live down their decision to launch New Coke. (Just Google “Worst Business Decisions Ever Made” if you don’t believe me.) We don’t even need to leave the soft drink industry to come up with a top 10 list of bad decisions. (Crystal Pepsi, anyone? How about this actual advertisement for 7-Up, which is literally the poster child of bad decisions?) Within the ultra-competitive automotive finance industry, lenders don’t have the benefit of being able to survive small-scale bad decisions, let alone titanic blunders like the ones I listed above. Even a series of “good-but-not-great” decisions is enough to put you out of business, simply due to the volume of rival financers who can... [Read More]

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Collections & Recovery Buying a Collections System – What Vendors Won’t Tell You #3

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This is question #3 in your handy guide to shopping for a collections system. I’m offering 10 tips — things most vendors won’t tell you that are absolutely critical to selecting the right system. What’s required in the infrastructure build? The details of the underlying system infrastructure are critical to success, which is why the implementation lead should take time to uncover exactly what’s required in the infrastructure build of the collection platform. System performance, backup memory and recovery, hardware and software specifications, maintenance and other aspects should be discussed and analyzed. The hidden costs to watch out for here are the costs of additional environments. You’ll probably require environments for production, test and training. Each of these environments will have associated costs that should be flushed out. The disaster recovery plan you put in place will include additional costs as well. Consider a support arrangement with your software vendor... [Read More]

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Analytics & Optimization When Will Analytic Business Adoption Reach an Inflection Point?


I have a confession to make. And nothing that would make most of you shudder (except for my beloved marketing colleagues). When I tell people I work for FICO, I usually get a response like “can you fix my credit score?” And by the time I break into my economical 30-second elevator pitch fit for cocktail parties, describing that we do more than scores, they’re already mingling with someone else. But recently, I had a conversation that evolved beyond the 580s and 820s of the credit scoring world. At a party, I chatted with someone who actually stuck around for my “what I do” story and confessed to knowing that FICO is in the analytics business. We talked about the difference between predictive and prescriptive analytics, the cumulative effect of business actions (such as marketing offers) on consumers, and even into the business value of an occasional fraud false positive.... [Read More]

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Collections & Recovery Demand for Electronic Payments Is Outpacing Technology Adoption

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The rise of electronic and mobile payment methods has been well documented in the payments industry in recent times, but what has been the driving force behind this? Dave Yohe, VP of Marketing at BillingTree, explains how consumer demand is having an effect on the types of new technology lending organizations are offering their customers.   Dave Yohe, BillingTree Consumer demand and technology is changing the way lenders are doing business. A recent BillingTree webinar, reviewing the findings of the 2015 Consumer Finance Business Strategy and Technology survey, looked at the adoption of payment technologies in small and large vendors. Bank-deposited paper checks were still higher on the list of customers’ payment methods than electronic or mobile payments – but that gap is closing. Paper still popular 85% of those surveyed said they still process bank-deposited paper checks – a more popular method with the older generation as they are... [Read More]

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Customer Engagement Video: Keeping Auto Lending Return on Equity High

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Alternative deal structures are the key to more successful auto lending. In this video, Matt Stanley, analytic segment leader at FICO, discusses how he has been working with auto lenders to close more deals by offering more financing options. The structure delivers flexibility while maintaining high-quality decision making. Alternative deal structures allow for variability in the loan-to-value (LTV) or term, not only keeping the return on assets/equity thresholds in place for the lender, but also helping borrowers get the car they desire.

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Fraud & Security How Tunisian Banks Will Fight Money Laundering – in the Cloud

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Anti-money laundering is one of the vital components of the fight against organized crime and terrorism. Two firms have just received a FICO Decision Management Award for their innovative work to help banks across Tunisia increase their AML activities and comply with banking regulations. VITALIS, in partnership with FICO, has developed and deployed an advanced AML solution, hosted by SIBTEL in its cloud to be used by banks across Tunisia. In order to help the nation’s banks comply with AML regulations, SIBTEL sought a solution that could be installed in the cloud as a managed service. The solution VITALIS set up with them integrates the Siron® Anti-Financial Crime Solutions Suite from FICO TONBELLER, the Dow Jones Watchlist for screening PEP (politically exposed persons) and the VITALIS solution for managing Swift archives. The solution was implemented with a team of two consultants in just three months. This demonstrates the flexibility of... [Read More]

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