Zoot, a leading provider of advanced instant credit decisioning and loan origination solutions, announced its partnership with ID Analytics, at the 2011 TowerGroup/CEB Annual Financial Services Strategy & Technology Conference & Exhibition.
The companies' joint capabilities provide financial institutions with new options for demand deposit account (DDA) opening that are more profitable and more effective at analyzing risk.
In the retail banking sector, the sources of losses are not always obvious--they may be related to credit risk, fraud, or a combination of the two. A solution that is highly predictive of the potential for both credit and fraud losses has proven to enhance visibility and reduce losses.
"A risk assessment strategy focused on either fraud or credit losses can fall short of isolating transactions that fall in the gray area-fraud that looks like credit risk and vice versa," said Steve Seoane, Vice President, Enterprise Solutions for ID Analytics, Inc. "Working together, Zoot and ID Analytics enable banks to avoid exposure from both types of risk."
To better assess applicants at account opening, banks leverage ID Analytics' ID Score fraud score combined with Credit OpticsTM, a supplemental credit score. ID Score quickly discerns legitimate consumers from fraudsters, while Credit OpticsTM fine-tunes credit decisions and enables banks to more accurately determine the best product, pricing, or credit line decision. This dual strategy reduces the number of fraudulent accounts approved while safely increasing the number of accounts booked.
The retail demand deposit landscape continues to change as new regulations are implemented and banks seek to bring profitability back to this line of business. Additionally, consumers are still hesitant from the economic downturn and lack loyalty, shopping around for the best deals available. Successful financial institutions are responding by enhancing their account opening ability to evaluate consumers' risk while making personalized offers to establish long-term relationships with the most profitable customers. Zoot has added a new capability to its zInitiate℠ account opening solution to support this movement.
Zoot's zInitiate account opening solution utilizes an open marketplace of unique, predictive data providers, including ID Analytics, to optimize the evaluation of all consumers during DDA opening. Alternative data sources can be used to pursue underbanked consumers and fine-tune decisions at a granular level that traditional DDA data sources do not provide. Having more information gives banks the ability to approve more accounts and reduce losses by better identifying those who pose a significant risk. The solution's functionality includes a rules engine that facilitates instant decisioning, cross-sell and the ability for business users to make modifications to logic quickly as the market changes.
"New regulations and decreasing profitability of demand deposit accounts are forcing banks to consider a new approach. They need better control of their risk exposure and flexibility to respond to regulatory changes quickly," said Dennis Dixon, president for Zoot Enterprises. "Zoot has responded with a solution that gives banks more account opening options and a richer perspective on customers by providing data not previously available to them. zInitiate allows banks to maximize every customer interaction, optimize their data selection and improve profitability by easily integrating with ID Analytics' ID Score and Credit Optics."