Category Archives: Risk & Compliance

Risk & Compliance Are Your Analytics Delivering Results?

analytics delivering results
May232018

Are your analytics delivering results? The word “analytics” means different things to different people.  Depending on the analytical maturity of your organization, analytics could mean reports on your performance, analytics could mean predictive models, or it could mean fully optimized analytic decisions. No matter where you are on that spectrum, many organizations report that while they have many different analytical systems or models, they don’t know how well they are performing.  Many times organizations implement expert or predictive models with the expectation of enhanced operational performance, but they don’t measure the results, and don’t assess if the model is delivering the business value needed and expected. Measuring and tuning models as is important as implementing models.  Without ongoing monitoring they can fail to achieve the desired results.  If you, as a leader of an organization wants to assess your analytics, there are a number of steps you can take. 1)... [Read More]

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Risk & Compliance FICO & Operation HOPE Work to Bridge Gaps in Financial Literacy

FICO and Operation Hope
May162018

FICO and global financial dignity and economic empowerment nonprofit, Operation HOPE, partnered a little over a year ago to help empower consumers through financial literacy. The program enables Operation Hope coaches at more than 100 HOPE Inside locations across the U.S. to share FICO® Scores with clients for free and to provide key insights to enable them to better understand their financial health. We recently had the opportunity to speak at the annual 2018 HOPE Global Forum.  At the event, we conducted a survey of attendees during our panel, ‘Unleashing Credit: Credit for the Poor Reimagined,’ to examine the barriers to credit.  Among the results from the survey, FICO found that the top drivers of credit barriers include debt-to-income ratio (93%), restrictive lending standards (84%), and gaps in financial literacy (80%). The survey results reinforce the ongoing need to help support personalized financial education and coaching.  We look forward to... [Read More]

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Risk & Compliance Infographic: How Student Loan Borrowers Improve their FICO Scores

Student loans infographic
May142018

In our previous blog post, FICO revealed research on the credit behavior of young people with a student loan actively in repayment to determine the behaviors that are driving FICO® Score increases and decreases.  Using a nationally representative sample, we identified 10 million scorable consumers age 18 to 30 who had a student loan actively in repayment as of October 2016. To better understand the financial actions driving the “FICO Score increaser” and the “FICO Score decreaser” populations, we looked at the credit behaviors of these two groups across a variety of dimensions such as amounts owed, on-time payments, and searches for new credit. Below is an infographic which provides a more visual representation of our findings.

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Risk & Compliance How Alliant Credit Union Reinvented Its Lending Program

Reinvented its lending
May102018

This week, leading trade publication creditunions.com published a full interview with Alliant Credit Union about the success they have had with FICO. You can read the full article here.  You can also read our media release here Alliant Credit Union, one of the largest credit unions in the United States, has transformed its consumer lending business and is exceeding its lending goals since implementing FICO technology solutions in 2016. With a new consumer loan origination system powered by FICO® Origination Manager, Alliant has processed 56,000+ loan applications and loaned more than $390 million to members with faster processing. Credit card applications can now close in less than half an hour, and auto loans can be funded the same day. “As we grew and changed our focus, we needed to give our users access to everything they needed for the loan process without having to talk to anyone,” says Jeremy Pinard, Alliant’s vice president of consumer... [Read More]

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Risk & Compliance FICO Score XD 2 and Innovations in Financial Inclusion

Hands holding globe
May072018

I recently had the opportunity to attend LendIt Fintech USA, a leading event discussing financial services innovation.  Some of the top thought leaders in banking, finance, artificial intelligence, machine learning, and credit risk came together in San Francisco to discuss the key trends and innovations in our industry.  The FICO team was excited to lead the Financial Inclusion track that focused on how to responsibly expand credit access to previously unscorable consumers.  In addition, we explored the power of tapping into alternative data in credit scoring in markets across the globe. A key point that the experts underscored during the Financial Inclusion sessions at LendIt was that expanding financial inclusion is a win-win proposition.  Consumers benefit through more affordable borrowing options, while lenders benefit by growing their customer base.  At a macroeconomic level, broader financial inclusion can benefit entire countries through the economic growth that greater access to credit can... [Read More]

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Risk & Compliance CECL for Auto Finance – How to get ready for CECL?

How do you get ready for CECL?
May032018

How do you get ready for CECL? In my last blog post, CECL for Auto Finance – Where Do I Start? I promised to start outlining “10 Requirements for an Effective CECL Software Solution”. These are tips to keep in mind whether you plan to “build” or “buy” a solution. To keep things digestible I’ll spread these out over the next three posts under three headings: Ready – What does your organization need to do to prepare for CECL implementation? Set – What capabilities does your solution need to have to provide a stable platform? Go! – What should your software actually do to help you manage your portfolio under CECL once you have implemented it? Ready? Let’s find out. 1) How do you get ready for CECL – Data readiness The best CECL software solutions will help to manage the standard’s vastly expanded data requirements, but it is up to... [Read More]

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Risk & Compliance How Student Loan Borrowers Improve their FICO Scores

Student Loan Debt
Apr252018

Student loan debt in the United States has reached an all-time high. Student loan debt can also be a part of a consumer’s financial journey as they look at buying a car, a house and even into retirement. With April being Financial Literacy month, FICO is exploring the credit behavior of young people with a student loan actively in repayment to determine the behaviors that are driving FICO® Score increases and decreases.  How many are exhibiting positive behaviors and driving score increases?  How many are exhibiting less favorable behaviors, leading to score decreases? Using a nationally representative sample, we identified 10 million scorable consumers age 18 to 30 who had a student loan actively in repayment as of October 2016. Among those within this profile, we found 22% had a significant increase in their FICO® Score 9 between October 2016 and October 2017.  We defined a “significant increase” as those with... [Read More]

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Risk & Compliance Banking Solutions: Reduce Complexity, Increase Sophistication

New Banking Solutions: Reduce Complexity, Increase Sophistication
Apr192018

FICO WORLD 2018, MIAMI, Florida FICO today unveiled a host of new retail banking solutions that allow lenders to manage the credit lifecycle in a way that is smarter, faster and simpler. The innovations are designed to help support lenders with their digital transformations as retail banking continues to be shaped by the forces of mobile, cloud, analytics and big data. “We have seen remarkable changes in banking in the last two years as lenders accelerate their digital transformation and reinvent the customer experience,” said Tim VanTassel, vice president of FICO’s credit lifecycle business line. “Lenders are engaged in an analytic arms race to find, delight and retain the right customers by determining and deploying differentiated offers and experiences.” Read the full media release here Originate Loans Using Optimized Deal Structures Providing consumers with multiple options for the best-fitting terms in real time has been an industry goal for some time, and... [Read More]

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