™
FICO: Make Every Decision Count
Elena Koneva
+7 926 2181324
elenakoneva@fico.com
Confidential. This presentation is provided for the recipient only and cannot
be reproduced or shared without Fair Isaac Corporation's express consent.
© 2013 Fair Isaac Corporation.
FICO delivers
superior predictive analytic solutions
that drive
smarter decisions.
Thousands of businesses worldwide,
including 9 of the top 10 Fortune companies,
rely on FICO to
make every decision count.
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© 2013 Fair Isaac Corporation. Confidential.
FICO: Game-Changing Analytics
First credit line
optimization
solutions
FICO holds 110+ patents in analytic
and decision management technology,
with 100+ patents pending
First predictive
systems for
insurance fraud
We are pioneers at transforming Big Data into
insights that drive smarter decisions
First insurance
underwriting
scoring systems
First
commercially
available credit
scoring systems
First automated
origination
systems with
analytics
1960s
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© 2013 Fair Isaac Corporation. Confidential.
1970s
First adaptive
control systems
for managing
card accounts
1980s
First crossbureau credit
scores
First analytic
systems for
retailers to
optimize offers
First small
business scoring
systems
First adaptive
analytics for
fraud
First neural
network-based
fraud solutions
First credit
capacity scores
First cardholder
profiling for fraud
1990s
First score for
prescription
adherence
2000s
We Work with the Most Successful Businesses
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Industry
Clients Include
Banking
More than half of
the top 100 banks
Insurance
Two-thirds of the
top US P&C
insurers
Retail/
Consumer
Goods
One-third of the
top US retailers
Health Care/
Pharma
7 of the top 10
pharma
companies
Government
100+ government
agencies
© 2013 Fair Isaac Corporation. Confidential.
Client Sample
FICO Snapshot
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Profile
The leader in predictive analytics for decision management
Founded: 1956
NYSE: FICO
Revenues: $676 million (fiscal 2012)
Products
and Services
Scores and related analytic models
Analytic applications for risk management, fraud, marketing, mobility
Tools for decision management
Clients and
Markets
5,000+ clients in 80 countries
Industry focus: Banking, insurance, retail, health care
Recent
Rankings
#1 in services operations analytics (IDC)
#6 in worldwide analytics analytics software (IDC)
#7 in Business Intelligence, CPM and Analytic Applications (Gartner)
#26 in the FinTech 100 (American Banker)
Offices
20+ offices worldwide, HQ in San Jose, California, USA
2,400 employees
Regional Hubs: San Rafael (CA); San Diego (CA); New York; Roseville,
MN; London; Birmingham (UK); Istanbul; Madrid; Munich; Sao Paulo;
Bangalore; Beijing; and Singapore.
© 2013 Fair Isaac Corporation. Confidential.
FICO Solution: Enhanced 360 Degree Risk View
1.Risk View
-Risk Today of default
Specific range of FICO® Scores
4.Other Views
-Propensity to consume
&FICO® Score Service
Determine risk of
repayment for lifecycle
lending, setting rates &
controlling loss
Assess market
performance competitive position
and usage of facility
Ascertain future
value & ability to take
manage additional debt
Quantify economic
impact on credit
risk
FICO® Credit Capacity Index™
2.Opportunity View
-Capacity to manage more credit
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© 2013
2010 Fair Isaac Corporation. Confidential.
FICO® Economic Impact Index
3.Macro View
-Sensitivity to changes in market
Leadership: Credit Scoring
World’s #1 credit bureau score, the FICO® Score
• 100 billion sold to date
• Powers 10 billion+ decisions a year
• 70,000+ businesses rely on FICO® Score
• Used by rating agencies and secondary market to improve risk
assessment, transparency
• Delivered through Biroul de Credit from 2008
• High predictive power and stability
“Your FICO® Score is the No. 1 piece of data to determine how much you’ll
pay on a loan and whether you’ll get credit.”
US News and World Report
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© 2013 Fair Isaac Corporation. Confidential.
Leadership: Regulators & Policy Leaders
» For many years FICO has offered technical assistance to all banking agencies
(OCC, Fed, FDIC, CFPB, OSFI) on credit scoring matters
» FICO has regularly provided multi-day FICO credit scoring training to bank
examiners, most recently for the OCC (Fall 2012) OSFI (Spring 2013)
» FICO has an ongoing dialogue with FDIC, Federal Reserve and CFPB on
consumer financial education issues related to credit scores
» Presented latest quarterly study findings of credit risk professionals to Council
of Economic Advisers
» FICO is a partner with University of Missouri FTC research study on credit
report accuracy and completeness
» FICO has testified before Congressional and State House Subcommittees on
credit score related issues for banking and insurance industries
» FICO has started meeting with FSA/Bank of England and EU regulators on risk
model development and governance, Basel III capital allocation assessments
and international portfolio alignment and calibrations
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© 2013 Fair Isaac Corporation. Confidential.
Economic Impact Index in Summary
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CHALLENGE
 Macroeconomic conditions affect consumer risk
 How do forecasts translate into actionable information at the
account level?
 How do forecasts apply to portfolio level analysis?
SOLUTION
 EII provides an adjusted FICO risk score based on up-to-date
macroeconomic forecast scenarios, driven by Analytics
 Translates market direction into actionable metrics for account
decisions, strategy adjustments, and portfolio analysis
BENEFITS
 Limit losses by tightening credit policies during downturn
 Grow portfolio responsibly as markets recover
 Better prepare for the future by quantifying the impact of future
macroeconomic conditions on portfolio performance
© 2013 Fair Isaac Corporation. Confidential.
Leadership: Marketing
Action Effect modelling
• Predicts the consumer’s reaction to an action the lender takes
• Action Effect models are sensitive to actions
• Provide a dynamic output contingent on input values (e.g. balance
given a specific limit amount)
• Combines predictive characteristics with a particular “action”
variable. (e.g. limit amount)
• Efficient Capital Allocation - Assign credit limits where most likely to be
utilized
• Improve Profitability Projections - Increased accuracy of projected
Net Interest Income calculation
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© 2013 Fair Isaac Corporation. Confidential.
Leadership: Fraud
Leading card fraud system: FICO® Falcon® Fraud Manager
• Protects more than 2.5 billion cards worldwide
• First use of neural networks in payment card fraud, combined with
proprietary cardholder profiles
• Many clients experience 50% reduction in payment fraud
• Strong detection and low false-positive rates enable clients to
maintain sharp focus on customer experience
• Large library of segment and region-specific consortium models for
quick time-to-value and shared learning across the industry
• Link analysis and data mining
“This is simply the best system for a growing bank facing today’s fraud
threats.”
Absa Bank
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© 2013 Fair Isaac Corporation. Confidential.
Thank you!
Elena Koneva
+7 926 2181324
elenakoneva@fico.com
Confidential. This presentation is provided for the recipient only and cannot
be reproduced or shared without Fair Isaac Corporation's express consent.
© 2013 Fair Isaac Corporation.