European Bankers Expect “Credit Gap” to Shrink for Consumers and Small Businesses, According to FICO-Efma Survey

LONDON — April 2, 2013 — FICO (NYSE:FICO), a leading predictive analytics and decision management software company, and Efma today announced the results of the seventh European Credit Risk Survey, which measures retail bankers’ outlook for the availability of credit along with their investment priorities for the year ahead. In the February survey, completed by 130 credit risk professionals from 41 countries, the forecast for a “credit gap” between credit supply and demand fell sharply from the last survey, conducted this past fall.

For consumers, the projected gap was just 4 percentage points, with 30 percent of respondents projecting some increase in the amount of credit requested and 26 percent projecting an increase in supply. By comparison, in the autumn 2012 survey the spread between projected demand and supply was a full 20 percentage points.

For small businesses, the gap was even smaller. In the new survey, 31 percent of respondents reported that they expect the aggregate amount of credit requested by small businesses to increase, and 29 percent expect the amount granted by lenders to also increase.

"Most of the new business growth in our corporate sector is coming from the SME segment," said Dr. Cüneyt Sezgin, board and audit committee member at Turkey's Garanti Bank in the FICO/Efma report. "Loans represent the primary relationship between banks and SMEs, as other financing alternatives for smaller companies are not well-developed in this market. Cash loans to SMEs represented 37 percent of total Turkish lira cash loans in 2012, and this ratio has been continuously increasing."

"Despite the economic challenges in many countries, lenders are telling us they're prepared to meet a modest increase in credit demand," said Mike Gordon, senior vice president for FICO sales, services and marketing. "Given last month's report that European banks have dramatically cut their Basel III capital shortfall, it appears that they gradually may be able to make more capital available for borrowers."

European bankers also laid out their priorities for investment in analytics. More than 40 percent of respondents reported they will invest in improving their analytics, with the highest priorities being credit risk models for both new credit applicants (61 percent of respondents) and existing customers (50 percent). In addition, 38 percent of respondents said they will increase their investment in risk analytics that incorporate Big Data.

"Although consumer lending is a mature process using analytics to support risk classification, marketing, underwriting and authorizations, predictive models must constantly be calibrated to accommodate changes in consumers' behavior," said Manuel Goncalves, director of the Risk and Decision Models Unit at Portugal-based Millennium bcp in the report. "These changes are driven not only by the adverse economic context but also by greater mobility and social networking. At the same time, there are new and richer sources of data that can be used to improve risk management and deliver a better customer experience."

The delinquency forecast was nearly unchanged from the last survey, with at least 40 percent of respondents forecasting an increase in delinquencies during the next six months on mortgages, credit cards and small business loans. "We don't expect a reversal of this trend until the economies of Europe show greater recovery," said Patrick Desmarès, secretary general of Efma. "That said, Europe is a heterogeneous region, with some countries preparing for a triple-dip recession while others, such as Turkey, look quite robust. The uncertainty across much of the region is particularly challenging for multi-national banks."

A detailed report, including specific results for the UK/Ireland, Germany/Austria/Switzerland and Spain/Portugal, is available online. Participants included credit-granting institutions ranging from local banks to global institutions.

Sobre FICO
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™.
For FICO news and media resources, visit www.fico.com/news.

About Efma
As a global not-for-profit organisation, Efma brings together more than 3.300 retail financial services companies from over 130 countries. With a membership base consisting of almost a third of all large retail banks worldwide, Efma has proven to be a valuable resource for the global industry, offering members exclusive access to a multitude of resources, databases, studies, articles, news feeds and publications. Efma also provides numerous networking opportunities through working groups, online communities and international meetings.
For more information: www.efma.com

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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, 2012 and its last quarterly report on Form 10-Q for the period ended December 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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