Strengthening conventional fraud detection

Financial institutions are always looking for ways to combat newer fraud schemes—schemes that arise between fraud model developments and are not well-represented in the historical data. As I discussed in a recent post, one way to boost performance is to add analytics that are adaptive or self-learning. Deploying adaptive models...

Optimizing Credit Limits Under New Regulations

July 2012. Add a reminder to your Outlook calendar, because that’s when new Australian regulatory changes for credit card lending will take effect—specifically Phase 2 of the National Consumer Credit Protection Act 2009 (as detailed in my colleague Paul Swyny’s recent post). What does this mean to portfolio managers throughout...

How can fraud models combat new tricks?

The fight against payment card fraud resembles an arms race. Card issuers are deploying ever more sophisticated anti-fraud measures, and fraudsters are continually evolving strategies to evade those measures. Typically, issuers rely upon neural network fraud models trained on huge historical datasets to recognize recurring fraud patterns and reduce fraud...

Fundamentals of analytic learning loops

My last few posts have discussed the analytic learning loop. By accelerating feedback about market performance, analytic learning loops enable banks to target the right products to consumers most likely to respond and generate profits. And banks can adjust decision strategies to boost results while campaigns are still ongoing. So...

Propelling growth with analytic learning loops

These days, economic volatility, new regulations and competitive forces all make analytic learning speed and yield critical to success. In my last post, I discussed how an “analytic learning loop” accelerates feedback about market performance, enabling banks to make decisions based on how consumers are behaving today. By providing a...

Why increased capital adequacy is only part of the solution

We’ve blogged a lot about the various proclamations of the Basel Committee, specifically how our banking clients around the world are using analytics to ensure capital adequacy and manage portfolio risk. Under the most recent Basel III measures, banks would have to hold six percent of Tier 1 capital, up...

FICO discusses risk management challenges in Cards International

A recent Cards International article explores the challenges of risk management in a dynamic economy and implications of the CARD Act, as well as new analytics-driven solutions that can help. In the article, FICO blog author Chisoo Lyons discusses how the economic downturn has heavily constrained the creativity of risk...

Mark Greene: Join us for FICO World 2011 (video)

How are the top competitors in banking worldwide changing the game to grow in a difficult economy? FICO CEO Mark Greene invites you to discover the answers at FICO World 2011, November 1-4 in New York. Mark Greene: Discover Game Changers at FICO World 2011 Attendees will join hundreds of...

Origination strategies of the best-in-class

In a recent post, I broke down a simplified origination decision model to illustrate how it can be used to improve decision strategies. But many of our clients are beginning to look to more advanced uses of these analytics, to boost originations performance. These lenders are leveraging custom decision models,...

Can Australian lenders learn from the US CARD Act aftermath?

Australian banks often look to their overseas counterparts for hints of new best practices, emerging challenges or troubles to come. So it appears to be with Australian regulators. Like their peers in Western markets like the US and UK, they are aggressively attempting to change the local banking landscape in...

Moving away from a fixed view of customer behavior

These days, portfolio growth and a bank's ability to quickly understand and adapt to changing consumer behavior are interconnected. The challenge, of course, is that traditional approaches to acquisitions and originations, based on analyzing past behavioral data, provide a historic view of customer risk and reward potential. But in today's...