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Origination by Any Other Name

For many years FICO has been an industry leader in consumer and small business credit origination.  We’ve developed a number of analytically driven applications to speed the time from customer application to close.

If you’re in the financial services business, you probably are very comfortable with the term origination.  If not, you may not even know what the term means.

Origination may be unique to banking and credit, but it’s also a term that virtually every business in the world is challenged with whether they call it origination, new account opening, onboarding or something else.  In a nutshell origination means to bring a new customer onboard or establish a new relationship.

For example, you apply for a loan.  You submit the necessary paperwork – tax returns, paystubs, bank statements, etc. – and the bank determines your credit worthiness and the terms of your loan. For other industries, the origination process could include applying to participate in a loyalty program, joining a website or community, applying for store credit, or turning on cable, telephone, gas and electric services when you move to a new place. All of these interactions require you to provide information by filling out a form or talking with a customer service or sales representative.

At the end of the day whatever you call it, it requires analytic and decision management technology. This technology enables your business to intelligently align the basic information you initially gathered from the new customer, with personal preferences and other data to determine the best course of action, and ensure you’re giving your new customers the right set of offers.  These offers may need to balance appeal (what will make your new customer happy) with your business priorities – such as risk exposure, profitability or competitive replacement.  The offers also need to be delivered or communicated in a manner that best suits your customer’s needs and preferences – via a call center agent, on the web, via social media, or through a mobile device or mobile application.

In fact, I would argue that origination is a sweet spot for analytics and decision management. How often do you get the chance to make a first impression with a new customer? When your customer offer is quickly optimized for the highest level of satisfaction, you end up with a happier customer, and happy customers are repeat customers.

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