With over £40 billion of unused exposure on inactive UK cards and over £50 billion on active UK cards there is the potential for huge losses if consumers start to eat into these limits.
When we look at how card issuers are dealing with three key factors — the performance of delinquent credit card portfolios, the actions on the persistent debt cohort and the operating model adjustment to mitigate against unnecessary impact of IFRS 9 — what is interesting is what we don’t see.
Our analysis of UK cards data from the FICO Benchmarking Service has revealed some troubling trends in UK cards delinquencies. All average delinquent balances reached over two-year highs in the fourth quarter of 2018.
“We reviewed other decision engines, but the FICO system gives us the greatest sophistication and flexibility,” said Yisroel Perkel, founder and director of Evergreen.
After a 2018 that had its highs and lows, what might 2019 have in store from a credit risk management standpoint? Here are four key developments in credit scoring that we will be keeping an eye on in the new year: Consumer-Contributed Data Takes Center Stage Momentum is high in the consumer-contributed data space: consumers are getting more comfortable with sharing their data, provided they are presented with clear benefits for doing so. Mandates, such as the Revised Payment Services Directive (PSD2), are ushering in the era of Open Banking around the globe. Additionally, developments, such as the recent launch of the Financial Data Exchange (FDX), point to increasing collaboration between financial institutions and data aggregation vendors (such as Finicity, Plaid, Quovo, and Envestnet | Yodlee) to facilitate secure and efficient transfer of consumer-permissioned financial data. In 2019, enhanced credit underwriting via digitally contributed-consumer data will hit the mainstream. With... [Read More]
What are the most read blogs in Risk & Compliance in 2018? This blog looks at the top 5 posts last year; unsurprisingly, topics around FICO Scores were of great interest.
In this post, I will share analysis that shows why using account management scores in addition to account origination scores is important.
For the first time, the average FICO® Score in the U.S. has reached 704, showing a steady upward trend in US credit quality.
Are we making the progress we want to see — and regulators demand — on non-performing loans (NPL)?
Following a slide that lasted four+ years, the FICO® Credit Health Index for Russia began climbing in April 2016 and climbed another 2 points last quarter.