All posts by Neil Jennings

Risk & Compliance Adapting Mortgage Loan Price Optimization to Building Societies

House image with analytics
Apr032017

One of the hottest analytic technologies in mortgage lending is price optimization. This is the application of advanced analytics to pricing strategies, in order to determine the ideal price for every customer that maximizes profitability, given factors such as take-up, affordability, etc. That’s great for banks, but what about building societies and credit unions? If profit isn’t your primary goal — if you exist to serve your members — does price optimization have a place? The answer is definitely yes. Using pricing optimization, building societies and credit unions can develop strategic mortgage offers that target specific objectives, such as customer retention, without hurting the bottom line and ensuring that targets around Treating the Customer Fairly are met. This kind of optimization can really pay off – making an appropriate offer, to the right customer at the right time, typically results in 10-15% higher retention of existing customers. When building societies... [Read More]

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