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Andrew Jennings
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Cars, diamonds, gold, stock, art, baseball cards – which collateral holds most sway with bankers when it comes to approving a consumer loan? We included this somewhat unusual question in the latest installment of our quarterly survey of North American risk managers. We asked bank risk officers which type of... Continue reading
Posted 7 days ago at Banking Analytics Blog
For the first time in a long time, I sense a bit of pessimism creeping into our quarterly North American risk survey results. In the latest survey of U.S. and Canadian bank risk professionals, expectations for delinquencies on credit cards and auto loans, as well as total delinquencies on all... Continue reading
Posted Apr 8, 2014 at Banking Analytics Blog
I'm just back from participating in a Chicago roundtable discussion on “Attracting and Developing Talent in Data and Analytics.” The event was run by the Executive Club of Chicago, and brought together 150 CIO/CMO level attendees across a broad spectrum of industry and academic institutions. I joined panelists Tom O'Toole... Continue reading
Posted Mar 19, 2014 at Banking Analytics Blog
As FICO's chief analytics officer, I regularly meet with our banking clients all over the world. Rarely have I seen as stark a difference in regional risk management priorities as I see today when I compare banks in Europe and North America to banks in developing countries throughout Asia. Europe... Continue reading
Posted Mar 10, 2014 at Banking Analytics Blog
There is a saying in Bali: the cure for anything is saltwater—sweat, tears or the sea. This analogy seemed fitting at our recent APAC CRO forum, as I discussed key issues with Asia’s leading chief risk officers at a resort that overlooked the inviting Java Sea. At a panel discussion... Continue reading
Posted Feb 4, 2014 at Banking Analytics Blog
In my last post, I discussed how our latest quarterly North American risk survey indicates consumer re-leveraging is picking up. That same survey also found that small business lending appears to be on a healthy trajectory. In our survey of bank risk officers in the U.S. and Canada, 67% of... Continue reading
Posted Jan 24, 2014 at Banking Analytics Blog
Our latest quarterly survey of bank risk officers in North America always seems to offer a few interesting nuggets. Two results in this quarter’s survey that caught my attention were: Expectations for delinquencies on auto loans hitting their highest level since Q4 2012; 34% of respondents expected delinquencies on auto... Continue reading
Posted Jan 14, 2014 at Banking Analytics Blog
It’s been quite a year in banking analytics – regulatory challenges, growth opportunities, new fraud threats, and the surge of mobile as the hot channel for customer engagement. I expect 2014 to bring even more change. Based on my conversations with clients over the past few weeks, I’ve put together... Continue reading
Posted Dec 23, 2013 at Banking Analytics Blog
If you’re a banker, that’s what your colleagues think. Our latest quarterly survey of US and Canadian bank risk professionals finds that they expect consumers to spend more and borrow more over the next six months. Our survey results are always fascinating to me because the consensus thinking of bankers... Continue reading
Posted Oct 9, 2013 at Banking Analytics Blog
With the 2013 INFORMS Annual Meeting now in full swing, I’d like to congratulate my colleague Gerald Fahner for being named a semifinalist for the INFORMS Innovation Award. His submission—titled “Imposing Domain Expertise on Algorithmic Learning to Construct Highly Predictive and Palatable Scorecards”—discusses an exciting new analytic approach that balances... Continue reading
Posted Oct 7, 2013 at Banking Analytics Blog
The race to deploy Big Data analytics – in banking and elsewhere – is creating a talent gap for qualified data scientists. Gartner estimates Big Data will generate six million U.S. jobs over the next three years (CNNMoney). However, McKinsey & Company predicts there won’t be enough qualified people to... Continue reading
Posted Jul 26, 2013 at Banking Analytics Blog
To operate in a customer-centric manner, businesses must be able to respond to customer actions as they take place. In many situations, data analysis and data-driven decisioning must occur in real time or near real time, based at least partly on the stream of data coming in from mobile phones,... Continue reading
Posted Jul 12, 2013 at Banking Analytics Blog
We just wrapped up our latest quarterly survey of U.S. bank risk professionals. As a first in our survey’s three-year history, respondents are expecting something of an equilibrium in the consumer “credit gap” – 60% expect the amount of credit requested by consumers and the amount of credit extended by... Continue reading
Posted Jul 9, 2013 at Banking Analytics Blog
The promise of Big Data looms large as banking institutions worldwide launch major customer centricity initiatives. Today we have the means to capture and analyze much bigger quantities of data than ever before, and to make meaningful connections between different types of it. We can analyze data in-stream for real-time... Continue reading
Posted Jun 13, 2013 at Banking Analytics Blog
Since the global recession, regulators worldwide have become increasingly concerned about the soundness of decision making and capital adequacy within financial services. As a result, they are taking an even closer look at how financial institutions manage risk and use scoring models. To address this greater regulatory scrutiny of model... Continue reading
Posted May 23, 2013 at Banking Analytics Blog
Financial institutions have had a difficult time adapting to the latest regulatory guidance regarding model validation and management. But making the right improvements can also translate into better analytic performance and risk management. To both comply and compete, it's critical to build an organizational policy for comprehensive model and credit... Continue reading
Posted May 16, 2013 at Banking Analytics Blog
Since the recession of 2008-2009, there has been quite a bit of discussion about credit lines. Are they going up? Are they going down? Are banks still aggressively managing their risk? Based on the US data I’ve seen, it looks like a mixed bag. On one hand, the number of... Continue reading
Posted May 8, 2013 at Banking Analytics Blog
I've been blogging about results from our latest quarterly survey of US bank risk professionals. This quarter, we took the survey in a new direction by also asking about business priorities in 2013. Two related responses tied for the top spot, each with 35% of respondents: utilizing Big Data analytics... Continue reading
Posted May 7, 2013 at Banking Analytics Blog
At this week’s FICO World conference in Miami, Big Data has taken center stage. Our keynote panellist yesterday, Kenneth Cukier, presented a captivating talk on how Big Data will transform our lives. Based on his new book, Cukier, the data editor of The Economist, emphasized that the secret of succeeding... Continue reading
Posted May 2, 2013 at Banking Analytics Blog
The availability of credit for small businesses has been a concern throughout the economic recovery. Our latest quarterly survey of US bank risk managers indicates we may be turning a corner. Not only are the bankers we surveyed generally optimistic about the credit market, they are expecting the credit situation... Continue reading
Posted Apr 16, 2013 at Banking Analytics Blog
I’m always curious to see what insight our quarterly survey of US bank risk professionals will yield. Here’s a finding that jumped out at me from this quarter’s survey: respondents think the housing recovery is for real. By now, we’ve all seen media reports of rising home prices in many... Continue reading
Posted Apr 9, 2013 at Banking Analytics Blog
Conventional wisdom holds that US consumers have been deleveraging—either voluntarily or involuntarily—since the recession of 2008-2009. While there is ample evidence that many consumers have, in fact, been deleveraging for the past five years, does that mean that all consumer segments have done so? The data indicates that one large... Continue reading
Posted Mar 21, 2013 at Banking Analytics Blog
As I’ve discussed previously, bankers seem to think years of deleveraging by US consumers will finally end in 2013. In our last quarterly survey of bankers, 61% of respondents said consumers will be applying for more new credit and trying to bump up the limits on existing credit accounts over... Continue reading
Posted Mar 14, 2013 at Banking Analytics Blog
Last month I wrote about growing optimism of US bank risk managers. A large majority of those polled expect consumers over the next six months will be applying for more new credit, asking for higher credit limits and carrying larger balances. Is their optimism well-founded? We all know that it... Continue reading
Posted Mar 4, 2013 at Banking Analytics Blog
In our latest quarterly survey of US risk managers, we asked bankers about their institutions' priorities for 2013. Overwhelmingly we found that their top priority was increasing return on capital. Coming in as a close second was increasing their use of data to better understand customers. It's a familiar tune—one... Continue reading
Posted Jan 14, 2013 at Banking Analytics Blog