One day your bank is at the top of the online pricing table for loans, with the most competitive pricing. The next day, your rival is on top. What do you do?
If you’re the UK’s Nationwide Building Society, the world’s largest building society with over 14 million members, you can whip your way right back to the top of the table. That’s one of the advantages of the Strategic Risk Infrastructure Nationwide built using advanced decision management technology from FICO. The SRI has enabled Nationwide to increase lending by at least £25 million a year.
The project’s results have made Nationwide this year’s winner of the FICO Decision Management Award for Customer Originations.
The key aim for Nationwide was to make more credit available. Using FICO® Blaze Advisor, Nationwide have replaced all the disparate systems previously used in its mortgage and personal loans operations, enabling the society to treat each customer more consistently.
One important way the SRI helps Nationwide extend more credit is by enabling the approval of qualified applicants who would otherwise be declined for affordability reasons. If a customer applies for a loan that has regular payments they may not be able to afford, FICO Blaze Advisor can review the affordability of the loan spread over a longer term, and if appropriate present that option to the applicant.
This is a good example where asking the right questions is key to growing the number of loans. However, it is also important not to ask too many questions. The SRI has streamlined the sales process, reducing the number of questions asked during a loan application process by focusing on those with the greatest relationship to an applicant’s creditworthiness. This has reduced the consumer abandonment rate during application by approximately 17%.
Another benefit for consumers is the speed with which Nationwide can implement new competitive deals using the SRI.
“Changes in pricing strategy that used to take 10 days to deploy can be made the same day now,” said Mark Tuton, senior risk manager at Nationwide. “We have used this capability to remain at the top of ‘best buy’ credit tables published by third parties. When a competitor changed its prices in an attempt to put itself at the top of the table, we reviewed our strategy and made a change the same day to remain at the top.“