China's Leading Alternative Lenders Adopt FICO Risk Management Technology to Strengthen Viability and Profits Amid Rapid Growth
Eleven micro-credit financiers jointly sign up to FICO Alternative Lending Platform
BEIJING—March 10, 2015—FICO (NYSE:FICO), the predictive analytics and decision management software company, has announced that 11 of China's leading alternative lending companies have signed to the new FICO® Alternative Lending Platform as part of industry-wide efforts to upgrade risk management across China's booming P2P (peer-to-peer) and micro-loan sector.
FICO's cloud-based platform, which became available in February this year, saw immediate interest as an advanced, analytics-based solution that is easy to use, powerful and affordable.
At a signing ceremony in Beijing yesterday, 11 companies representing an estimated ¥62 billion RMB (USD$10 billion) in loans signaled they would soon start using the platform.
CreditEase, Yooli.com, Souyidai.com, Helloan.cn, Renrenmoney.com, Sunshine Insurance, Anrunjinrong.com, Firstp2p.com, Xyb100.com and HaoDai.com are the nation's first alternative lending organizations to sign up. FICO has also reached an agreement with the Beijing Internet Lending Association to educate and advance risk management practices across the industry.
"Risk management is a core competence for all lenders, in part because it has direct bearing on their lending capital and profitability," said John Chen, managing director, FICO China. "The FICO Alternative Lending Platform has been designed to meet the needs of a wide variety of organizations in China, from established alternative lenders and startups to traditional finance institutions. Each client will benefit from FICO's consultancy capabilities, which combine international expertise with local insight to ensure the real-time risk management system we deliveris tuned to their specific needs and ecosystem."
Mr. Dagang Guo, general secretary of Beijing Internet Lending Association, said, "The transaction value from the members of the Beijing P2P Association represents about one quarter of the total industry. The sustainable development of China's P2P industry needs internal self-discipline and the support of external experts in order to protect investors and allow a healthy industry environment to develop. FICO has been well recognized as the global leader in risk management. We are keen to collaborate with FICO to upgrade the industry's risk management."
Mr. Ning Tang, chief executive officer of CreditEase, said, "We have been working closely with FICO since 2011, and have found its global expertise, local insight and professionalism to be very impressive. Here at CreditEase we have witnessed fast growth in the last four years, as we have penetrated different sectors of the internet finance market. We are glad to extend our partnership with FICO to provide more alternative lending offerings to our Chinese customers."
The alternative lending market in China has developed into a flourishing sector of the shadow banking industry. At the end of 2014, more than 1,500 P2P websites were operating; almost double the number in 2013. The value of transactions for the year was more than 250 billion yuan, nearly 2.4 times of that in 2013. On the flip side, a lack of scientific risk management, appropriate government regulation and sound operating processes has resulted in 275 P2P operators going bankrupt in 2014 or suffering serious problems. This is 3.6 times the number in 2013, according to the China Internet Finance Annual Report published this month by Wangdaizhijia.
Mr. Mingshun Li, chief executive officer of Haodai.com, said, "As the leading P2P search engine in China, we have witnessed all the ups and downs of the industry. Risk management is the key success factor for P2P companies to win the battle against bad loans. If more P2P players take up FICO's affordable analytic and decision-making solutions, it will enable the sustainable industry development and better protect Chinese investors."
Mr. Yannan Liu, chief executive officer of Yooli.com, said, "Yooli has worked with FICO to establish our risk management system when our business started. We are proud that our bad loan rate is below the average industry level. The advanced risk management system has become one of our key success factors. We expect the continuous cooperation between FICO and Yooli will support Yooli to grow in a healthy and speedy way."
Mr. Jianwen Xu, chief executive officer of Renrenmoney.com, said, "We always stand in investors' shoes to design investment products that offer transparency and profitability. We are motivated to sign up to FICO's Alternative Lending Platform and I believe FICO's experience with top global and Chinese P2P leaders will help us continue offering investors more choices."
Dr. Simon Sha, deputy general manager, Micro-Finance BU, Sunshine Insurance Group, said, "We are affiliated to the Sunshine Insurance Group and solid risk management is core to our competiveness. We are happy to cooperate with FICO, the global leader in banking risk management. We feel confident this cooperation will benefit our clients."
Developed by Fair Isaac Advisors, FICO's global business consulting and analytics division, the design of the FICO® Alternative Lending Platform allows micro-lenders to use a risk scoring and decision making system, specifically tailored to their unique originations process.
FICO's cloud-based platform has also been designed to be very cost-effective, by eliminating costly installations and updates. The solution offers the ability to incorporate customized rules to ensure the fastest possible time-to-value for FICO clients. FICO® Alternative Lending Platform can help lenders significantly improve the quality of their underwriting decisions, effectively identify and control credit risks, drive profitable growth and expand their business while creating efficiency and speed in their credit origination workflow.
Future improvements are already being developed to further leverage the power of FICO's Big Data capabilities and incorporate other analytic dimensions of the Chinese consumer to give lenders an even more granular understanding of the risk, fraud and consumption patterns of their future clients.
For more information please download the PDF at: http://www.fico.com/en/latest-thinking/product-sheet/fico-alternative-lending-platform
FICO (NYSE: FICO) is a leading analytics software company, helping businesses in 90+ countries make better decisions that drive higher levels of growth, profitability and customer satisfaction. The company's groundbreaking use of Big Data and mathematical algorithms to predict consumer behavior has transformed entire industries. FICO provides analytics software and tools used across multiple industries to manage risk, fight fraud, build more profitable customer relationships, optimize operations and meet strict government regulations. Many of our products reach industry-wide adoption. These include the FICO® Score, the standard measure of consumer credit risk in the United States. FICO solutions leverage open-source standards and cloud computing to maximize flexibility, speed deployment and reduce costs. The company also helps millions of people manage their personal credit health. FICO: Make every decision count™. Learn more at www.fico.com.
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