Analytics & Optimization Are You a Great Decision Maker?

FICO Decision Management Awards logo

Is your company breaking new ground in using analytics to improve decisions?

Then FICO invites you to enter the 2015 FICO Decision Management Awards!

The Decision Management Awards honor FICO clients achieving outstanding results using predictive analytics and decision management technology to grow their business, manage risk and reduce costs. Tell us your story! Let us know what you’re doing to drive the success of your business.

Six awards will be given in 2015:

Analytic Excellence Customer Onboarding and Management Debt Management Fraud Control Decision Management Innovation Regulatory Compliance

Application deadline: September 1, 2015. Contact: Darcy Sullivan,

Learn more and submit your nomination See the past winners

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Collections & Recovery Debt Placement Success Depends on Visibility in Agency Management

Debt Placement imagery

Use of external collection agencies can dramatically improve collection and recovery success, but only if organizations placing debt have deep visibility into, and control over, agency results.

Collections staff overseeing debt placements often spend an inordinate amount of time chasing down issues versus completing analyses and making business improvements.

And it’s not getting easier. A groundswell of negative press and penalties has altered the course of debt collection and agency placements. First parties need to increase their visibility into the information and actions taking place at agencies working their debt. The benefits of what third parties deliver haven’t gone away – scalability and better performance for less cost – but first-party accountability for the vendors they engage has increased. Only when full visibility is available over the entire operational process can risk be mitigated and full performance achieved.

It helps with forecasting recovery cash flow, too. How can you predict... [Read More]

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Risk & Compliance Are You Ready for Interest Rate Hikes?

Deposit Pricing Interest Rate Hikes

We’ve all heard the rumors. Interest rates will go up in 2013…no, make that 2014…first half of 2015…

But this time, there might be some truth to the long-promised interest rate hikes.

A recent Reuters article quoted Federal Reserve Governor Jerome Powell as saying that, based on a continually improving economy, he is looking to raise interest rates twice this year: initially in September, and once more in December.

Powell is one of five Fed officials making a dual-hike projection, adding more substance to the possibility that rates will actually increase.

An interesting offshoot of this discussion is pertinent to bank leadership and shareholders alike—namely, which institutions are most likely to benefit when interest rates increase? What factors position some banks to benefit in areas such as deposit pricing, while others struggle to compete in the new normalized rate environment?

If you’re interested in reading more, check out a recent... [Read More]

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Customer Engagement Lending in a Developing Economy: Q&A with Russian Bank VTB24

VTB24 Oxana Staroselskaya

We recently spoke with Oksana Staroselskaya, head of Credit Risk Methodology at VTB24, to learn more about the challenges of lending in a developing economy, and the bank’s use of predictive analytics and origination management.

Q: What are some of the challenges you encounter operating as a financial institution in Russia?

We face a couple of big hurdles. First, there’s not a lot of credit history available on which to base our lending decisions. Second, the Russian market is growing so quickly that we have to expand our sales every year just to maintain the same market share. For example, to increase our market share by 1% next year, we have to increase sales by more than 15%.

Q: Why did you decide to switch to FICO® Origination Manager as part of your technology infrastructure?

Our aging system couldn’t process data quickly enough, which was especially problematic because we needed... [Read More]

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Fraud & Security OPM Data Breach — We Should Focus on How, Not Who

OPM Logo

In cybersecurity, knowing your adversaries’ techniques and tactics can help you better defend and prevent successful attacks. It’s an important part of your strategy.

But when attribution becomes the focus of the story, we risk not examining how an attacker was successful.

Looking at a breach from a “whodunit” point of view makes for better headlines and helps sell threat intelligence services. However, it fails to address how the compromise was possible and how to address those gaps.

In the case of the Office of Personnel Management breach, it is now reported that a privileged user account was compromised and then used to gain a greater foothold in the network and steal information from 18 million accounts. For me, that raises questions about the management of identity and access controls and failure to identify anomalies in user behavior. This is much more mundane than pondering which nation-state is behind an... [Read More]

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Fraud & Security Half of Cross-Border UK Debit Card Fraud Is in US

UK Debit Fraud Chart

FICO has just released data on fraud patterns on 52 million active UK debit cards, and the patterns are a mixed bag of good, bad and scary.

Most customers find the debit fraud statistics of greatest concern because this reflects their own money, as opposed to a credit or charge card where a customer often views fraudulent usage as “the bank’s money.” Criminals that plunder debit cards often have to move quicker and with greater agility because funds are often in shorter supply – i.e., only what is in the checking account plus any overdraft – and losses can be spotted more quickly as current funds are drained with no regard for other regular commitments.

The most startling figure relates to cross-border fraud. The percentage of fraudulent transactions on UK debit cards that come from cross-border use rose 25 percent. What’s more shocking is that nearly half of these fraudulent... [Read More]

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Customer Engagement Opportunity Knocking for Credit Unions

Opportunity Knocks Credit Unions 2

FICO’s consumer research shows that millennials are more likely to switch financial institutions than other generational groups, and the perception of high fees is driving them to leave. These interviews with millennials highlights that frustration with fees.

Credit unions have recognized this opportunity and are capitalizing on the discontent. Credit union membership is growing; credit union savings balances hit one trillion in March, the first time in credit union history; and credit union loan portfolios increased 10.6% in the past 12 months, the fastest pace since 2005. (CUNA Mutual Credit Trends Report, May 2015).

Every day, credit unions are working harder to please their members. But responding to member needs, plus business and regulatory changes, requires agility. Perhaps more than current credit union service organization (CUSO) systems provide.

All too often, we here at FICO encounter credit unions using origination systems that are hampering growth and delivering a sub-optimal... [Read More]

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Analytics & Optimization How Vantiv Transformed Merchant Origination

crowed escalator

Ravi Shah,  senior vice president, architecture and strategy at Vantiv said it best, “(Manually), it can take up to nine days to get a final decision on the application. Having applied the Decision Management Suite technology in an integrated fashion, we are able to do that in minutes.”

Every year, Vantiv processes more than 17 billion payment transactions for nearly a half-million retail merchants in the United States. Because there is a contingent risk involved in taking on a new merchant, the company needs to ensure that it minimizes that risk and makes appropriate pricing offers. Vantiv has implemented FICO® Decision Management Suite to streamline its merchant origination process. As a result, Vantiv has cut merchant onboarding from days to minutes, which helps facilitate the company’s rapid growth and opens up new possibilities for partnerships with independent sales organizations and merchant banks.

Check out Ravi Shah’s video to hear his story.

... [Read More]

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Risk & Compliance Chartis Recognizes FICO in Operational Risk Management


Despite increasing resources dedicated to operational risk management, it continues to burden banks—to such an extent that a recent Basel Committee review states:

“Overall, banks have made insufficient progress in implementing the Principles originally introduced in 2003 and revised in 2011.”

According to a recent independent research published by Chartis, “Operational Risk Management Systems for Financial Services,” a staggering 98% of the top 50 operational risk losses in the previous 12 months – amounting to $60 billion – were due to conduct risk (specifically focusing on suitability or fiduciary failures and improper business or market practices). A theme common to many risk loss events is lack of tools and processes to help align and drive operational risk management. In fact, while banks continue to invest scarce resources in boosting areas such as stress testing and capital adequacy, the efforts committed to compliance aren’t necessarily being leveraged within the... [Read More]

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Analytics & Optimization FICO Analytic Cloud Honored in Annual Red Hat Innovation Awards

Red Hat Award 2

Red Hat announced that FICO is receiving one of its Innovation Awards in the Infrastructure category. This category recognizes “striking flexibility, scalability, cost effectiveness, performance and security with an infrastructure.” Red Hat is recognizing the work that we’ve done with OpenShift Enterprise in the development of the FICO® Analytic Cloud .

Several years ago, we began developing the FICO Analytic Cloud to better serve the middle market, extend our offerings to different industries, and bring analytics to the masses. When we began work on the Analytic Cloud, we knew the only way to develop and operate such a complex and innovative cloud offering would be to use the Platform as a Service model. We also knew our ambitious and innovative software and tools would demand nothing less than the best PaaS solution in the market.

We ended up selecting OpenShift Enterprise. The results have been stellar. The new PaaS offering has... [Read More]

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