Risk & Compliance Tax Compliance; Enhancements with Analytics

Tax Compliance
Jun112019

Tax agencies have a limited amount of resources to pursue tax compliance activities (collections and audit). Because of this resource limitation, they are required to build criteria to determine which individuals and businesses to select for audit and which collection cases to focus their efforts on. Typically, this selection is based on experience that informs agency leaders on the types of businesses that generate productive audit leads and collection cases. While the selection process typically utilizes available data, cases are primarily selected based on experience, intuition and business rules, rather than using predictive, mathematically generated analytical models. Tax Compliance – Why Use Analytical Models at Tax Agencies? Predictive, analytical models produce better outputs over experienced based “expert” models by increasing the accuracy of the model. The IRS, among other tax agencies are investing in predictive analytics. This results in more productive workloads and outcomes.  Analytic models can: ·        Increase customer service by... [Read More]

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Risk & Compliance FICO Awarded Drexel LeBow Analytics 50 Award for the FICO Safe Driving Score

FICO Awarded Analytics 50 Award
Jun062019

For the third year in a row, FICO was honored with the Drexel LeBow Analytics 50 award for our innovative work on the FICO® Safe Driving Score. The university’s Center for Business recognizes 50 organizations nationwide, who leverage analytics in notable and innovative ways to solve business problems. Industry honorees include retail, insurance, sports, healthcare, transportation and finance. Drexel University’s LeBow College of Business believes analytics strides should be paired with a clear organizational strategy for the most significant impact. Thanks to the Analytics 50 Award, the university is making sure businesses who reach this achievement don’t go unnoticed. Can Arkali, senior director of Scores and Predictive Analytics at FICO, was at awards ceremony in Philadelphia in May to accept the award. FICO launched the FICO® Safe Driving Score in 2016 in partnership with global risk management leader, eDriving. Per the National Highway Traffic Safety Administration, human error accounts for 94%... [Read More]

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Analytics & Optimization Decision Management Drives Significant Credit Card Growth

Credit Card Growth
Jun052019

Credit Card Growth – Response Rates Up, Costs Down China Minsheng Bank Credit Card Center has used FICO® Blaze Advisor® decision rules management system to help grow its business by creating an intelligent, automated marketing system that delivers targeted offers, which have seen a 10 to 15 percent jump in response rates. China Minsheng Bank has reduced the time required to launch a marketing offer to just days resulting in a time cost saving of 70 percent. By reducing the time to market, and by better personalizing the offers, the initial activation rate has increased by two percent, while the initial transaction rate is up by 14 percent. “We have improved our marketing efficiency, response rate and customer satisfaction, by upgrading our marketing campaigns to more personalized ones, using FICO’s world-class decisioning technology,” said Jingiao Yu, director of technology, Credit Card Center at China Minsheng Bank. “The whole process is... [Read More]

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Risk & Compliance How Credit Actions Impact FICO Scores

FICO Score Planner Banner
Jun042019

How much does missing a payment impact a FICO® Score? What about reducing credit card balances? New FICO research simulated how different credit events may impact FICO® Score 9 for five different credit profiles, as seen in Figure 1 below. These representative profiles were selected because they had credit characteristics (payment history, utilization, etc.) that were generally typical of the five scores shown below. Sophia has the only profile with delinquencies, and she also has the highest revolving utilization. Since payment history (35%) and amounts owed (30%) represent the 2 most important categories of the FICO® Score, she unsurprisingly has the lowest FICO® Score of the group. David has a thin file and is relatively new-to-credit, while Mike, Rachel, and Maria all have thick and mature files with varying debt and utilization levels. The key takeaway of the results of five different simulations (Figure 2) is: The impact to FICO® Score... [Read More]

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Risk & Compliance Promotional Pricing for Deposits—One Size Does NOT Fit All

Promotional Pricing for Deposits
May282019

Let’s face it—most consumers (me included) love a good deal. In retail, the enticing banner of SALE triggers purchasing behavior in many consumers. Like moths to the flame, retailers use attractive promotions to draw business. In this three-part blog series, we will explore: 1) the challenges with the current state of promotional pricing for deposits, 2) the art of what is possible, and 3) how to achieve the “new possible” with promotional pricing for deposits. In the competitive banking landscape for deposits, promotions have been around for decades. While banks are not (usually) offering free toasters today, they often use a “one-size-fits-all” approach to pricing. The common approach? The alluring teaser rate with a minimum balance that typically runs between 3 and 12 months. The teaser rate is often the go-to solution to raise liquidity. Yet, today’s consumers have more than one factor that affects their deposit decision-making. The duration... [Read More]

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