Risk & Compliance Survey: How Are FIs Coping with Capital Adequacy Reforms?

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Working with Chartis, we recently completed a global survey of financial institutions about their current capital adequacy regimes. Not surprisingly, we found that many still struggle with both the pace of regulatory change as well as the best way in which to implement capital adequacy programs.

After the financial crisis, a number of major reforms and new regulations were enacted to strengthen the financial system and increase transparency.  A fundamental focus of these reforms was on defining and calculating capital adequacy, as exemplified by Basel 3, Dodd Frank and CCAR.

This regulatory focus on capital adequacy will not abate any time soon. It’s estimated that by 2019, capital reserve requirements will have increased in the US by an additional $870 billion and in Europe by €1.1 trillion.

With that shortfall in mind, it is noteworthy which financial regulations our survey respondents felt had significant impact on their capital adequacy methods... [Read More]

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Analytics & Optimization Old School Board Gamers Compete with Optimization

Board Game 4

Today’s gamers aren’t always perched in front of a video console. They are increasingly sitting around a table rolling dice and moving pieces. And these modern games aren’t just the classic games like Monopoly and Yahtzee, they are innovative new games like the Settlers of Canaan and Qwirkle.

In case you missed the memo, board games are on the comeback, with sales increasing at a rate of 25 percent or higher annually the past four years. And this weekend, board game enthusiasts from around the globe will converge on the Hyatt Regency in San Francisco for the four-day KublaCon Game Convention. Many gamers will compete in the Optimal Board Game Tournament.

And while board games might be a throwback, the technology used to run the tournament isn’t. In fact, the organizers will be using FICO® Xpress Optimization Modeler. What makes this so cool is that most board game tournaments can... [Read More]

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Analytics & Optimization Forget Statistics! San Diego State MBA Students Study Analytics


Analytics is statistics at speed. While MBA programs require statistics coursework, analytics is still an up and comer in the hallowed halls. But you don’t need to be a data scientist to develop and use analytics. That is what FICO set out to prove this spring with the launch of the FICO Academic Engagement Program and there’ no better group to approach than MBA students.

Yesterday, FICO hosted six San Diego State University MBA students who participated in a semester-long program where they used FICO’s Decision Management tools (FICO® Analytic Modeler Scorecard Pro and FICO® Analytic Modeler Decision Tree Pro) through the FICO® Analytic Cloud. They were joined by several FICO executives in a roundtable discussion about their experience using FICO’s analytic development tools and their feedback was overwhelming positive.

Steven Felger, a second year MBA student, summed it up best when he said, “FICO Analytic Modeler Scorecard Professional and Decision... [Read More]

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Fraud & Security FICO Card Alert Service Sees Surge in US ATM Cash-Outs

John Buzzard on Fox Business

Two weeks ago I decided to sit down and write a blog article about ATM fraud trends and in that feature I talked about some of the habits that criminals are exhibiting when they are performing unauthorized ATM withdrawals or “cash outs” as we like to refer to them these days.

The trend we’ve seen has grabbed people’s attention. It has already been featured in the Wall Street Journal and yesterday I discussed it on Fox Business with the Journal‘s Robin Sidel.

When you peruse that article you will notice that there is a great chart that shows what sorts of locations are generating the most incidents of card and PIN skimming.  Overwhelmingly, bank-owned ATMS have become the most popular location for a criminal to set up a card skim operation because it affords the ultimate opportunity to capture consumer’s cards and PINs.

A Growth Spurt

FICO® Card Alert Service... [Read More]

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Customer Engagement QUIZ: How High is Your Millennial Banking IQ?

Millennial Quiz

The summer is almost upon us and students are cramming for final exams. Here at FICO, we thought we’d get into test taking spirit with a little quiz for our retail banking customers on one key demographic – Millennials.

How much do you know about what Millennials want from their bank? Take our Millennial Banking Quiz to find out. The quiz is based on the results from a recent FICO survey of US consumers about their banking habits. We found some surprising results on what Millennials want.

After you take the quiz, you can access the full report to gain new insights around the Millennial generation and retail banking.

Click on this link to start the quiz: http://www.fico.com/millennial-quiz/

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Fraud & Security Sticker Shock: How Familiarity Breeds Card Fraud

Credit card with activation sticker

We all know what to do when we get a new credit or debit card. Sign the back, log in or ring to activate the card, destroy the existing one.

But what if the sticker on the front of the new card, detailing activation procedures, is actually a nefarious attempt by a criminal to have you log into a domain they control and download malicious malware on your PC? Or what if the activation call center is actually a bogus telephone service linked to a premium rate phone line established by the criminal, which means the customer pays through the nose to supposedly activate the card? What happens when the protocols designed to stop fraud are used to perpetrate it?

Worrying, isn’t it? Would you spot any tell-tale signs of criminal activity or would you be oblivious to it because the card replacement conventions are all too familiar to you?

... [Read More]

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Customer Engagement Are Annual Fees Back on the Cards for the UK?

Credit cards in wallet

Over the last few years, UK credit card issuers have been facing the challenge of shrinking revenue opportunities due to tighter regulations that capped overlimit fees and late payment fees. There has also been a continual reduction in interchange rates, with further imminent cuts.

Consumer and media perception that banks are “penalizing” people who are less able to afford fees may result in further reductions, or even complete removal of some charges that are based on poor payment performance.

Card issuers could make up this shortfall by raising interest rates. But many issuers appear to be considering annual card fees to recoup lost income. FICO has seen this done effectively, but there are pros and cons:

Pros of annual card fees

1) Stable annual revenue income

2) More active book due to consumers closing dormant cards to avoid fees

3) Higher chance of being front of wallet with increased customer loyalty, as less... [Read More]

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Customer Engagement Patient Adherence: Drugs Don’t Work If Patients Don’t Take Them


“Drugs don’t work in patients who don’t take them.” That quote is attributed to former US Surgeon General C. Everett Coop, and gets to the heart of a painful truth in healthcare worldwide….many patients do not take the medications they need to successfully treat their conditions. A World Health Organization Report states that “Adherence to long-term therapy for chronic illnesses in developed countries averages 50%. In developing countries, the rates are even lower.” Various other studies approximate costs related hospital admissions due to lack of proper medication adherence is $100 billion per year.

There are numerous reasons patients don’t take their medications properly. For example, some find the cost of the medications prohibitive while others skip their pills out of a desire to avoid side effects and of course some are just plain forgetful. However, better education and automated reminders can help improve adherence. A recent study by the Montefiore Medical... [Read More]

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Risk & Compliance Model Management Best Practices: Part 9

Best Practice Push Pins Part 9

Welcome to our last Model Management Monday. This is the ninth and final part in my blog series on model management, each post highlighting a best practice that supports both compliance and improved performance.  

Best Practice #9: Document Thoroughly

With the increased use of predictive models in automated decisioning, regulators worldwide place tremendous importance on documentation and oversight. To answer regulator questions for details of how a particular model was developed, along with who approved the model at key stages of its development, you need the right tools in place to quickly retrieve the supporting evidence.

With that in mind, you should keep an inventory of every model within your operating environment, cataloguing its purpose, usage and restrictions on use. Technical documentation should be captured describing the modeling methodology used, along with supporting evidence for why the final model inputs were chosen. Your documentation should be detailed enough so that... [Read More]

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Fraud & Security FICO’s Vickie Miller Named Information Security Exec of the Year


Vickie Miller, senior director of cybersecurity product management at FICO, has been named ISE® Central Executive of the Year Award Winner 2015 by T.E.N. The award recognizes Vickie’s performance in her prior role as chief information security officer at FICO. She has 15 years in information security leading audit, compliance, and security operations.

T.E.N., a national technology and security executive networking organization, facilitates peer-to-peer relationships between top executives, industry visionaries and solutions providers. The awards ceremony took place May 7.

In 2010, Vickie received the “People’s Choice” award in this category.

Congratulations, Vickie!

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