FICO's big data AI analytics reduces risk by 50% with an approval rate that is four times higher
BEIJING, June 28, 2018 /PRNewswire/ --
- Since January SPDB Credit Card Center's total number of successful credit card applications using FICO originations has exceeded 9 million.
- Origination rate increased more than two fold to 88 percent of applications.
- SPDB has won the 2017 FICO Decisions Award for Customer Onboarding and Management
Shanghai Pudong Development Bank (SPDB) Credit Card Center, a credit card lending pioneer in China, has increased its customer base using originations powered by technology from analytics software firm FICO. SPDB Credit Card Center's total number of credit card applications using originations driven by a big data AI analytics strategy has exceeded 9 million, since January 2017. During this incredible growth, SPDB has maintained a controllable risk level while increasing its origination rate more than two-fold to 88 percent of applications.
For its achievements, SPDB has won the 2017 FICO Decisions Award for Customer Onboarding and Management.
More information: http://www.fico.com/en/products/fico-customer-communication-services
FICO's origination and big data AI analytics solution was introduced with the aim of overcoming the challenges brought by the rapid development of SPDB's credit card business. One of the key limitations holding back speedy originations was the limited credit data available on customers.
"Using custom scorecards and models from FICO built using Big Data AI analytics, SPDB Credit Card Centre has managed to significantly improve its risk assessment of consumers with either thin files or no files at the People's Bank of China credit bureau," said Sandy Wang, managing director in China for FICO. "The coverage rate or scorable population of the FICO models built using big data AI analytics, covers more than 75 percent of applicants."
Using the FICO solution has enabled SPDB to approve more people while controlling credit risk. Compared to SPDB's control group, the FICO big data AI analytics strategy has delivered a 50 percent lower risk level but an approval rate that is four times higher.
SPDB has also deployed a collections system from FICO, which has automated many tasks and freed human agents to work on high-value cases. FICO's Customer Communication Services (CCS) solution incorporates machine learning and sophisticated analytics to deliver a collection service that can adapt to the specific requirements of the customer base.
The multi-channel solution can be optimized and adjusted on an ongoing basis, to meet the changing collection business objectives. It is estimated the solution is currently shouldering the volumes previously completed by 60 human agents while maintaining the same cure rate.
The CCS solution has allowed SPDB Credit Card Center to more efficiently utilize its team members on the more challenging collection work. It has also allowed the business to scale in a way that just would not have been possible if the bank had to find, train and deploy more people in the collections department.
SPDB Credit Card Center team continues to test new ideas and contact strategies using a champion / challenger methodology, which promotes successful "challenger" strategies that outperform the current "champions". FICO Customer Communication Service therefore plays an important role in providing a closed loop for collection optimization.
Previous to the FICO solution, SPDB was relying on outbound phone calls only. They now have a multi-channel customer engagement system in place for collections. This change helped keep the collection rates high through a clever and systematic system that allows the collections team to follow up with customers at the right time, using the right channel and with the right message.
Joy Macknight, deputy editor of The Banker, one of this year's judges for the FICO Decisions Awards, said, "I gave SPDB top marks because of their customer-centric success. They are achieving great results by taking a holistic approach to risk management across originations and collections."
"SPDB has harnessed analytic technologies to reduce their overall risk, greatly increase the proportion of automatic originations, increase approval rates and scale their collections," said Sandy Wang. "They have skillfully created a data-driven and comprehensive origination optimization strategy, using advanced decision science technologies and cutting-edge modelling experience from FICO. It has been a fruitful partnership and a project that has yielded significant results."
About the FICO Decisions Awards
The FICO Decisions Awards recognize organizations that are achieving remarkable success using FICO solutions. A panel of independent judges with deep industry expertise evaluates nominations based upon measurable improvement in key metrics; demonstrated use of best practices; project scale, depth and breadth; and innovative uses of technology. The 2017 judges are:
- Giorgi Alibegashvili, Strategic Project Manager, TBC Bank (2016 award winner)
- Julie Conroy, Research Director, Aite Group
- Douglas Gray, Director, Enterprise Data & Analytics, Southwest Airlines (2016 winner)
- Joy Macknight, Transaction Banking and Technology Editor, The Banker
- Daniel Mayo, Chief Analyst, Financial Services Technology, Ovum
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 185 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, manufacturing, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.
Learn more at www.fico.com.
FICO is a registered trademark of Fair Isaac Corporation in the US and other countries.