MINNEAPOLIS—July 9, 2010—FICO (NYSE:FICO), the leading provider of analytics and decision management technology, announced today the general availability of a "starter kit" for credit line optimization (CLO). This starter kit is bundled with the industry-leading FICO® TRIAD® Customer Manager to help card issuers apply analytic precision to credit line increase strategies.
The Credit Line Optimization Starter Kit enables clients to take their TRIAD credit line increase strategies to the next level of performance, find opportunities for responsible profitable growth and control losses while making the best use of limited exposure. Issuers can rapidly model the credit line decision, set portfolio constraints and objectives, and build decision strategies that optimize those objectives. Many FICO clients have seen improved profit of $8-$12 per card account in 12 months by using decision modeling and optimization to change credit limits on cardholders.
"The Credit CARD Act passed this year in the US, combined with a challenging economy in markets worldwide, has put tremendous pressure on card profits," said David Lightfoot, FICO vice president for product management. "Many issuers have reduced line increases or abandoned them altogether. Our experience shows that analytically determining credit lines can boost revenue growth even in today’s economy, and the CLO Starter Kit makes that easier than ever before."
The starter kit is specifically designed to enable card issuers to develop more profitable strategies in today’s highly regulated environment. The starter kit can produce an optimized strategy 3-9 months faster than building your own solution with an optimization tool. At the same time, the starter kit takes full advantage of FICO’s advanced analytic methodology, which has been proven on decision modeling and optimization projects with more than 50 banks, and includes components to help lenders address new regulations in many countries requiring that customers "opt in" to line increases.
Decision strategies built using the Credit Line Optimization Starter Kit can be easily integrated into TRIAD, which is used to manage about two-thirds of credit card accounts worldwide. These strategies segment the card issuer’s portfolio using analytically derived criteria and thresholds, and assign the ideal credit increase or decrease amount to each cardholder. TSYS, one of the world’s leading payments providers, has integrated FICO’s credit line optimization service into its customized TRIAD offering, giving its clients a market-leading advantage.
"We have grown our card portfolio profitably using advanced analytics, including FICO’s credit line optimization services and TRIAD," said Mark Merritt, Chief Credit Risk Officer at Canadian Tire Financial Services, one of Canada’s leading lenders and its second-largest MasterCard franchise. "FICO optimization gives us the precision we need to set the right line for every customer, and their experience in strategy design means we can build the right approach for our portfolio. With the slim margins in the cards business today, we view FICO credit line optimization as a competitive imperative."
FICO (NYSE:FICO) transforms business by making every decision count. FICO's Decision Management solutions combine trusted advice, world-class analytics and innovative applications to give organizations the power to automate, improve and connect decisions across their business. Clients in 80 countries work with FICO to increase customer loyalty and profitability, cut fraud losses, manage credit risk, meet regulatory and competitive demands, and rapidly build market share. FICO also helps millions of individuals manage their credit health through the www.myFICO.com website
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