Nationwide aims for personalised loans pricing with Nomis

Nationwide aims for personalised loans pricing with Nomis

The UK's Nationwide Building Society is implementing technology from Nomis Solutions in a move it says will help it extend credit to more customers by improving the pricing practices of its personal loans business.

With the economic downturn making it increasingly difficult for Brits to get loans, the vendor says its Nomis Price Optimizer will help Nationwide extend credit to more people by offering rates that are tailored to the market, account for risk, and best suit the customer.

In addition, the technology will help Nationwide demonstrate regulatory compliance by enabling its pricing team to track and store all past decisions and the rationale behind them.

"We've partnered with Nomis Solutions to use a more customer-centric and tailored approach to pricing that will enable us to price our unsecured loans business appropriately and prudently," says Simon Beresford, head, consumer lending, Nationwide Trust. "The Nomis Price Optimizer enables us to understand the impact of pricing on customer response and use that insight to make smarter pricing decisions in this difficult environment."

Last week Nationwide outlined plans to introduce "personalised pricing" for all personal loans.

Jeremy Wood, director, consumer finance, Nationwide, said: "As a prudent lender in the current credit environment it is important that, in pricing personal loans, we are placing a greater emphasis on risk and lending appropriately."

Comments: (2)

A Finextra member
A Finextra member 10 December, 2008, 22:11Be the first to give this comment the thumbs up 0 likes

As a consumer, I sense something rather sinister in this approach that gives me the chills.  Up until now we had actuarial departments that assessed the risks across the portfolios and smoothed out blips in the patterns to come up with a risk profile that translated into an single interest rate across the whole portfolio.

The benefit of this to the consumers is that more consumers get a loan.  The benefit to the bank is that ...oh yes...more consumers get a loan.  Now it seems that we may begin to penalise those people who, by way of financial status, marital status, age or misfortune are classed as less favourable risks.

I don't adhere to this principal and it seems like a retrograde step in the evolution of our financial and social wellbeing.  It seems that this era of cost cutting and profit management has no moral bottom line.

Matt White
Matt White - Finextra - Toronto 11 December, 2008, 09:35Be the first to give this comment the thumbs up 0 likes

Completely agree Steve. Quite how Nationwide and the vendor can claim this system will result in more loans I don't know. Surely it will just mean that the people who need loans the most will find it the most difficult and expensive to get them.

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