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Daniel Melo
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Reporting on the results of credit decision strategies is a vital function – but it’s often given less thought than other components of risk management. With the multitude of data variables available, selecting the key performance indicators relevant to the decision being made will be essential in making sure your... Continue reading
Posted yesterday at Banking Analytics Blog
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An area of concern for risk managers is how “adverse selection” may impact default rates. If you’re not familiar with the term, adverse selection refers to the fact that an uncompetitive credit offer – such as one with high interest rates or a low initial credit line — will be... Continue reading
Posted Mar 24, 2014 at Banking Analytics Blog
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As the UK economic recovery continues, so does the good news on how cardholders are spending and managing their payments. Today FICO released its quarterly UK cards data showing that average spend on “classic,” non-premium credit cards hit a 10-year high in December 2013. The proportion of classic UK credit... Continue reading
Posted Mar 13, 2014 at Banking Analytics Blog
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When was the last time you reviewed your client communications wording, tone and layout? When was the last time they were changed? If the answer to the above is more than a year, you may want to consider conducting a review. Why? Because however carefully crafted your messages are —... Continue reading
Posted Feb 27, 2014 at Banking Analytics Blog
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I am a movie addict. A Jedi Trekker with double zeros on my ID, who fights against angry birds (not Angry Birds) at Bodega Bay. That’s why the Big Data boom reminds me of the last scenes of Raiders of the Lost Ark. Remember the scene? A government official tells... Continue reading
Posted Feb 24, 2014 at Banking Analytics Blog
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The two-year decline in Russian’s credit health has stabilized. FICO and the National Bureau of Credit Histories (NBKI), Russia’s leading credit bureau, announced new figures showing that Russian borrowers’ credit repayment delinquencies remained stable from October 2013 to January 2014. This was the first time in 18 months that the... Continue reading
Posted Feb 12, 2014 at Banking Analytics Blog
Transparency, sustainability, governance, good practices, clear selling process…. All these buzzwords sound familiar, right? They seem to apply in every banking market. Here’s one that doesn’t: conduct risk. You can read about conduct risk nearly every day in the UK, where many of the top banks have been tarnished for... Continue reading
Posted Feb 10, 2014 at Banking Analytics Blog
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With customer behavior changing as the UK economic recovery builds, how are cardholders paying off their balances? Our latest research suggests little change in this pattern, with fewer than 50% of cardholders overall classed as revolvers vs. transactors. Our Global Business Consulting team reviewed more than 11 million active card... Continue reading
Posted Feb 6, 2014 at Banking Analytics Blog
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Everyone knows the UK economy is recovering, and retailers had a good Christmas. This upturn is coming none too soon, as our review of more than 38 million UK credit cards shows that the percentage of UK card accounts that are active has dropped from November 2012 to November 2013.... Continue reading
Posted Jan 28, 2014 at Banking Analytics Blog
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Our latest European Credit Risk Outlook, developed with Efma, contains a snapshot of how risk managers in Central and Eastern Europe see the next six months. This region represents a great diversity of economies, at different stages of credit maturity and with different growth rates. But the usual pattern is... Continue reading
Posted Jan 22, 2014 at Banking Analytics Blog
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Regulatory compliance and raising capital have been at the top of risk managers’ To Do lists for years. Our latest survey of European risk managers shows that is starting to change — bankers now say increasing lending will be a greater priority this year. New lending to consumers is a... Continue reading
Posted Jan 14, 2014 at Banking Analytics Blog
I was recently asked for my predictions for risk management in 2014 by Retail Banker International. My comments for that publication would also be germane to readers of this blog. First, all of our banking clients are focused on regulation, even while they restart the revenue growth engines. Banks are... Continue reading
Posted Jan 9, 2014 at Banking Analytics Blog
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Mobile technology is revolutionizing the way we live. The number of smartphone users globally has already topped the one billion mark, and continues to climb. Smartphone sales now exceed feature phone sales. This expansion of new mobile technologies is transforming every aspect of how consumers interact with businesses – from... Continue reading
Posted Dec 18, 2013 at Banking Analytics Blog
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Responding to clients’ concerns over a rise in delinquencies among newly booked card accounts in the UK, our benchmarking team analyzed the performance of UK card accounts that had been on the books less than 4 months. As the data shows, there was indeed a rise in August, though this... Continue reading
Posted Dec 17, 2013 at Banking Analytics Blog
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Here’s sobering news for one of the world’s fastest growing credit economies: Russian borrowers’ credit health reached nearly a four-year low in October. The country’s FICO® Credit Health Index fell to 102, down from 104 last quarter, and just 2 points above the low experienced in late 2009. This information... Continue reading
Posted Dec 12, 2013 at Banking Analytics Blog
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“Delinquent” is not a nice word — it sounds like a criminal. Perhaps you prefer to call them late payers, or forgetful borrowers, or customers in arrears. Whatever you choose to call them, there are more of them now, according to our survey of UK debt collectors, conducted with Marketforce.... Continue reading
Posted Dec 3, 2013 at Banking Analytics Blog
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FICO’s latest research on UK credit cards bears out the healthy trends we have been seeing over the last couple of years. Cardholders are making more timely payments, as demonstrated by a reduction in the growth of delinquent balances compared to the growth of current balances. The chart below tracks... Continue reading
Posted Nov 18, 2013 at Banking Analytics Blog
A call from a debt collector can strike fear into the heart of a consumer — but what makes collectors themselves shake in their boots? These days, the answer is clear: Regulators! The latest proof of this can be found in a survey of UK collectors conducted by FICO and... Continue reading
Posted Nov 14, 2013 at Banking Analytics Blog
Every lender – like virtually every company – wants to provide consistent treatment to customers, as part of fair treatment. Regulators insist on it — witness the UK’s Financial Conduct Authority, which states, “Treating customers fairly (TCF) remains central to our expectations of firms’ conduct, that firms put the well-being... Continue reading
Posted Oct 30, 2013 at Banking Analytics Blog
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Are you a “Mobile Native”? You are if you interact with businesses every day on your mobile phone or tablet. And if you are, you’re more likely to be living in China than in the U.S. or Europe, according to FICO’s latest research. In an international survey of businesses and... Continue reading
Posted Oct 23, 2013 at Banking Analytics Blog
The South Africa financial services industry has built a credit risk management practice with world-class sophistication. But with this sophistication comes the tough balancing act faced by first-world banks worldwide. This was abundantly clear at this month’s FICO World Summit in South Africa, where a group of talented and savvy... Continue reading
Posted Oct 1, 2013 at Banking Analytics Blog
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This week Britain’s Organisation for Economic Cooperation and Development forecast that economic growth would accelerate by a relatively brisk 1.7 percent between June and December this year. With the economy picking up, will consumers have the credit they need to keep the momentum going, or will the “credit gap” stall... Continue reading
Posted Sep 5, 2013 at Banking Analytics Blog
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What are the latest figures showing the decline in Russian’s credit health really telling us? As shown in the data released today by FICO and the National Bureau of Credit Histories, Russia’s leading credit bureau, Russian borrowers’ credit repayment delinquencies rose again in July 2013. After a year and a... Continue reading
Posted Aug 14, 2013 at Banking Analytics Blog
The economic crisis of the past few years has created a new breed of debtor. In FICO’s research, these people have sometimes been dubbed “fallen angels” — people who used to pay their bills on time but lost their jobs or had other financial hardship that made them fall behind... Continue reading
Posted Jul 19, 2013 at Banking Analytics Blog
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One reason banks have been less proactive about customer service than they might have been is that they could count on customer complacency. Switching banks was fairly rare. That may be changing. In our latest European Credit Risk Survey, performed with Efma, 41% of bankers said customers are more likely... Continue reading
Posted Jul 17, 2013 at Banking Analytics Blog