MADRID—May 31, 2012—FICO, the leading provider of analytics and decision management technology, today announced that its solutions have enabled Portugal’s largest privately owned bank, Millennium bcp, to standardize its decision-making processes. Using FICO analytics and software, the bank has increased automated loan decisions from 8% in 2000 to 91% in 2012, significantly improving customer relationships and driving business growth. Millennium bcp today automates 128 million decisions a year using FICO solutions.
Providing services to more than 5 million customers in Europe and Africa, Millennium bcp required a more systematic way to make decisions as it pursued growth across the region. It partnered with FICO to deploy automated processes and standards for efficient origination and customer management decisions on various products across multiple countries. The bank uses a suite of FICO solutions — including FICO® TRIAD® Customer Manager, FICO® Capstone® Decision Accelerator and FICO® Model Builder — and has moved from standalone predictive models to sophisticated decision models for a number of banking decisions.
Controlling millions of current account transactions
Millennium bcp has used FICO solutions since 2000, when it implemented the Credit Facilities decision area of FICO TRIAD Customer Manager. Soon after that, the bank launched a project to improve the decision-making processes for making pay/no pay decisions on millions of transactions involving current accounts with insufficient funds. Many of these decisions are automated with the assistance of “shadow limits” in FICO TRIAD. The limits preauthorize a certain amount of overdraft for customers, based on their credit risk and other factors.
Today, the bank automates 7 million overdraft authorizations a year, and has found that 99.7 percent of these automated authorizations self-cure within three months. Automating these decisions has also helped branch staff focus on customer service.
Improving credit origination
Following these successes, Millennium bcp decided to use powerful analytic models with a consistent, objective and fast decision-making framework to offer faster loan approvals and origination than its competitors, while limiting losses due to better risk evaluation. For this initiative, the bank uses FICO Capstone Decision Accelerator along with risk and credit capacity models built using FICO Model Builder. The significant improvements encouraged the bank to extend the use of automation across the retail bank.
Credit managers at Millennium bcp have been trained on the automated processes and how decisions are taken based on the underlying data. The bank has adopted a new underwriting paradigm which combines the expertise of credit professionals with the analysis of historical data to improve performance.
Managing accounts and customers
In addition, the bank has begun using FICO TRIAD Customer Manager to make decisions on its customers at the account level, but informed by an analysis of the customer’s behaviour across all product relationships.
“When operational decisions are constantly being taken, solutions like those offered by FICO allow us to observe the patterns in the data. Most of these decisions should be taken on the fly, with controlled risk and without added costs," said Manuel Gonçalves, manager of the decision models and risks business unit in Millennium bcp. “Some companies base their decision-making process on account management because they only market one product, and others on customer management because they supply several products. FICO has helped us incorporate the data to coordinate account management with customer management and provide a holistic view which will help make better decisions and improve business results.”
Clients are more satisfied and forecasts are more accurate
Using FICO solutions, Millennium bcp improved client satisfaction and increased the use of account information to make faster and more accurate risk forecasts. Among the quantifiable benefits are increases in revenue from fees and interest, more efficient underwriting and debt collection, lower provisions due to better origination, lower customer churn rates and the ability to more precisely target customers with credit offers. In addition, the bank strengthened its risk culture, customer and staff satisfaction, and is able to offer better and faster offers than the competition.
“FICO offers its clients worldwide analytics and advanced decision engines that can enable more profitable decisions,” said Antonio García Rouco, general manager of FICO for Western Europe. “With our solutions, Millennium bcp can turn customers who only use their current accounts for deposits and cash payments into clients with credit products that are more profitable."
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.
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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.
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