21 October 2014

Fico introduces analytics-based portfolio profitability service

17 April 2014  |  785 views  |  0 Source: Fico

Fico (NYSE:FICO), a leading predictive analytics and decision management software company, today announced a new service designed to help retail banks discover new ways to increase portfolio profitability.

The Fair Isaac Advisors P&L Insight Service, offered by the Fair Isaac® Advisors consulting group, provides financial services organisations with an analysis of their portfolio trends and profit drivers, along with portfolio-level profitability forecasts and what-if scenarios for strategic planning purposes.

Tightening banking regulations and economic turbulence have made it harder for portfolio managers to forecast results, and also to increase profitability. At the same time, senior management and bank directors are demanding detailed strategic plans that clearly spell out the expected impact on the bank's financial targets. With Fair Isaac Advisors P&L Insight Service, Fair Isaac Advisors provide tactical and strategic recommendations for capitalising on opportunities and mitigating risks revealed in the analysis, creating a clear roadmap of actions for improved profitability.

"In our work with retail banks around the world, we see risk managers and portfolio managers struggling to consistently provide accurate forecasts, due to economic uncertainty and competitive market shifts," said Robert Duque-Ribeiro, vice president and general manager of Fair Isaac Advisors. "This is particularly true for banks that have grown through mergers and acquisitions and those that are undergoing a conversion or divestiture. We are also seeing banks that have aggressive growth plans but stagnant results. With Fair Isaac Advisors P&L Insight Service, we provide continuous indicators to our clients on the health of their portfolios, and combine the output with the analysis of seasoned advisors to help institutions uncover opportunities, detect signs of trouble, drive growth and facilitate sound strategic planning. What's more, we will deliver the results quarterly and the analysis in a matter of days."

"By combining our portfolio-level data with FICO's proprietary analytics and expertise, we have been able to determine both positive and negative portfolio trends, identify portfolio opportunities and gather insights into our portfolio's future performance," said Kevin Takac, director of Quantitative Analysis at KeyBank. "Fair Isaac Advisors provided us with clear observations and recommendations for areas of improvement that have enhanced our business, ensuring we can mitigate future risk, realise risk-adjusted growth, and use solid information for our risk management planning. We found our portfolio advisory, assessment and analysis extremely useful for current planning and beyond."

Unlike traditional P&L assessments, the P&L Insight Service examines potential impacts across the credit lifecycle, including marketing, originations, customer management and collections. FICO's advisors can rapidly generate actionable insights using a proprietary FICO tool with built-in forecasting models that can be tuned to the particular dynamics of a bank's portfolio. Advisors convert 12 to 24 months of portfolio-level data into coherent business intelligence, provide automated trend analysis of profit drivers, deliver actionable and quantifiable recommendations, and assist with strategic planning activities for short-, medium-, and long-range objective-setting.

"By combining the bank's data with FICO's proprietary analytics and expertise, we have been able to deliver phenomenal results for our clients," said Jose Tagunicar, a principal scientist at FICO, who directs the new service. "For example, we helped one bank achieve a 10 percent improvement in average credit line yields and a 14 percent increase in revenue with only a 1 percent increase in losses."

Fair Isaac Advisors' mission is to bring analytic innovation and business expertise to refine businesses' decision-making process. Advisors design and devise visionary approaches to business challenges, relying on years of experience working with clients around the world. They leverage new data science and proven analytics techniques, along with FICO's market-leading decision management applications, to drive success and improve performance. 

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