What were some of the most interesting risk analytics topics last year? Judging from the views on the FICO Blog, risk professionals are keenly interested in new ways to approach risk analytics.
Here were the top 5 posts of 2017 in the Risk & Compliance category:
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Andrew Jennings dug into data to explore whether we’re really seeing Millennials turn away from credit.
“Compared with 10 years ago, today’s 18-24 year olds have lower credit and store card balances, and while they have more auto loans, the value of these loans did not grow as much as inflation would suggest,” he wrote. “By contrast, growth in student loan debts outpaced inflation, being both greater in number as well as balances; this undoubtedly creates a drag on capacity for other forms of consumer credit.”
Explained author Campbell Scott, “The scoring methodology was developed by EFL Global and marketed by FICO as part of our FICO Financial Inclusion Initiative, designed to open up credit markets around the world to a larger number of unbanked and underserved consumers. The EFL credit risk score is created through a dynamic behavioral design and psychometric assessment that analyzes character traits with a proven relationship to credit risk. It’s an ideal approach for applicants who do not have a credit history and therefore cannot be scored using traditional methods.” He shared the characteristics scored by EFL:
industry’s appeal of the FCC’s most recent TCPA guidelines.”
“The traditional credit characteristics captured more value than the alternative data characteristics (with the alternative data capturing about 60% of the predictive power), and there was a high degree of overlap between the two. However, by combining the traditional and alternative data characteristics (and understanding the overlap so as not to over-weigh certain variables’ contribution), we were able to produce a more powerful model."
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