MUNICH—June 19, 2012—FICO (NYSE:FICO), the leading provider of analytics and decision management technology, and industry analyst firm IDC Financial Insights met today with representatives of German banks in Frankfurt to discuss the critical importance of model management. In an event titled Model Governance and Decision Support Frameworks in Today's Complex Banking Landscape, FICO focused on how banks can improve risk management, regulatory compliance and competitive advantage by strengthening their management of predictive models, such as those used to measure customers’ credit risk.
The post-crisis banking landscape has been characterized by even greater reliance on predictive models to drive lending decisions and meet stricter regulations. Many banks, however, still lack a structured and reliable governance program for ensuring models are performing well over time and delivering strong business results.
"Business analytics and sophisticated modeling have taken center stage as differentiating capabilities in today's financial markets,” said Michael Versace, Research Director for Worldwide Risk at IDC Financial Insights. “As the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management become more ingrained in management decision making processes, financial institutions will find new challenges to governance programs that have traditionally focused solely on data and software development. The increased dependency on analytical management creates new business, operational, and technology risks and significantly opaque opportunities for errors and rogue operations if proper organizational architectures, control frameworks, and governance programs are not effectively applied."
“Monitoring model performance has become a greater challenge for lenders as their use of analytics has grown,” said Daniel Melo, who directs FICO’s solution consulting group in Europe, the Middle East and Africa. “Through our discussions at this event, we showed lenders how model management can strengthen their risk management and improve the bank’s profitability. Ultimately, this can be a competitive advantage for banks, not just an initiative to satisfy the regulators.”
Last year, FICO released a solution known as FICO® Model Central™ Solution that provides a complete environment for managing predictive models in a reliable, automated and integrated way. It presents a management dashboard of overall model health, alerting personnel to performance degradation so they can take action before business decisions are impacted. The solution can also accelerate the deployment of predictive models into a bank’s operational systems.
FICO and IDC Financial Insights analysts met with lenders in Stockholm on June 12, and are meeting with lenders in Istanbul on June 21 and Madrid on June 28. Sponsored by FICO, an IDC Financial Insights White Paper on this topic is scheduled for release in July.
FICO (NYSE:FICO), formerly known as Fair Isaac, delivers superior predictive analytics solutions that drive smarter decisions. The company’s groundbreaking use of mathematics to predict consumer behavior has transformed entire industries and revolutionized the way risk is managed and products are marketed. FICO’s innovative solutions include the industry-leading solutions for measuring credit risk, managing credit accounts, identifying and minimizing the impact of fraud, and customizing consumer offers with pinpoint accuracy. Most of the world’s top banks, as well as leading insurers, retailers, pharmaceutical companies and government agencies, rely on FICO solutions to accelerate growth, control risk, boost profits and meet regulatory and competitive demands. FICO: Make every decision count™.
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Statement Concerning Forward-Looking Information
Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Decision Management strategy and reengineering plan, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to realize the anticipated benefits of any acquisitions, continuing material adverse developments in global economic conditions, and other risks described from time to time in FICO’s SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2011 and its last quarterly report on Form 10-Q for the period ended March 31, 2012. If any of these risks or uncertainties materializes, FICO’s results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.
FICO and “Make every decision count” are trademarks of Fair Isaac Corporation in the US and other countries.
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