FICO® Economic Impact Service gives you a better way to anticipate the effect of future economic conditions on account risk. With this new technology, you now have a risk measurement tool better aligned to the future performance of accounts, allowing you to make more informed decisions across the customer lifecycle and more quickly adapt to changing market conditions.
Features & Benefits
With the FICO Economic Impact Service, you can not only assess risk based on past performance, but also adjust for current and future conditions, allowing you to tighten credit policies sooner and for the right populations during an economic downturn, or loosen policies as markets near recovery.
This patent-pending methodology models the historical relationship between a score and systematic changes in consumer behavior in reaction to the economy. It allows you to simulate the impact of future macro-economic conditions on your scores to better adjust long-term strategies based on risk preferences.
With the Economic Impact Service, you can conduct “what if” analysis to understand how the odds-to-score relationship can change under a range of economic conditions, allowing you to create more accurate, empirically derived capital requirements and address Basel II compliance.
With FICO Economic Impact Service, FICO works with you to apply the methodology to a chosen portfolio and score. We build and deliver econometric models custom-tailored to capture the relationship between market factors and the selected score’s odds-to-score relationship.
This methodology can be applied to a variety of scores, such as origination scores, behavior scores, broad-based bureau scores like the industry-standard FICO® Score, and Basel II risk metrics.
Economic Impact Service builds on your current risk management tools, enhancing your decisioning processes by filling a key knowledge gap in developing more profitable, proactive strategies.
Insights White Papers
Jul 2011, No. 53
Analytic Learning Loops Propel Bankcard Growth
Jun 2011, No. 51
View More ›