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Daniel Melo
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As reported today by FICO and NBKI, Russia’s credit bureau, Russian borrowers’ credit health has been falling for two years, and reached a new low in July. The FICO® Credit Health Index had reached 98 points, the lowest level since the Index began in 2008, and two points lower than... Continue reading
Posted Aug 27, 2014 at Banking Analytics Blog
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Collections, a trending topic in our blog, is an invaluable tool for providing an outstanding customer experience. The collections unit is one of a firm’s important contact channels. For proof that the collections practice is becoming a customer service area, just look at the winners of the 2014 FICO Decision... Continue reading
Posted Jul 28, 2014 at Banking Analytics Blog
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One day your bank is at the top of the online pricing table for loans, with the most competitive pricing. The next day, your rival is on top. What do you do? If you’re the UK’s Nationwide Building Society, the world’s largest building society with over 14 million members, you... Continue reading
Posted Jul 17, 2014 at Banking Analytics Blog
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In my last post I discussed how important stress testing is to our credit risk management work. Generally, we think of stress testing a bank, or a portfolio of assets. But in fact, we can improve risk management by building customer-level stress testing into our stress test lab. This might... Continue reading
Posted Jun 19, 2014 at Banking Analytics Blog
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Overlimit? Dude, that’s so over. At least, that’s what the latest data from the FICO® Benchmark Reporting Service suggests. According to our latest report, the percentage of standard credit cards with overlimit balances has fallen from 2.6 percent in March 2012 to 1.9 percent in March 2014. The percentage of... Continue reading
Posted Jun 12, 2014 at Banking Analytics Blog
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In the wake of Lehman Brothers’ failure in 2008, the meaning of “stress test” changed. The worst global financial and economic crisis in the last 80 years created a confidence gap that forced regulators and institutions into simulating worst-case scenarios. In two big waves, 2009 for USA and 2010 for... Continue reading
Posted May 27, 2014 at Banking Analytics Blog
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Our analysis of UK credit cards shows that the average cardholder had 32.46% of unused exposure in February 2014, compared to 33.38% at the same time the previous year. This slight decrease puts unused exposure at around £41 billion. This slight change masks a larger fall since 2008, when the... Continue reading
Posted May 22, 2014 at Banking Analytics Blog
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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 Apr 17, 2014 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