Fico and Equifax have launched a new RegTech solution to help lenders meet affordability requirements.
The FICO Risk and Affordability Decision Suite, which is powered by Equifax, uses advanced predictive analytics to assess a consumer’s repayment risk as well as their ability to handle both existing and new credit.
With the UK’s Financial Conduct Authority pursing measures to stop consumers becoming trapped by persistent debt, the solution is designed for lenders who need to decide which customers can handle additional or existing credit obligations.
It is based solution is based on thorough research into risk and affordability factors and their relationship to consumers’ payment patterns. Despite being initially available for cards, the solution is also designed to address credit and affordability risk across all credit portfolios.
“For lenders in the UK, basing credit decisions on credit risk alone is no longer enough,” said Steve Hadaway, general manager for FICO in Europe, the Middle East and Africa.
“Lenders need to consider affordability along with creditworthiness, while ensuring they make fair, equitable decisions based on the most accurate data available. Through our partnership with Equifax, we’re giving lenders a systematic and sound way to lend responsibly.”
The Risk and Affordability Decision Suite is comprised of 46 decision keys, a combination of scores, indexes and carefully selected characteristics – that can be used in credit decisions. FICO analysed more than 4,500 variables from Equifax data to determine which data and combinations of data would add value from an affordability risk perspective.
Founded in 1956 and based in Silicon Valley, FICO provides its solutions to businesses in more than 100 countries, offering 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.
In April, FICO launched several solution upgrades to help banks, lenders, FinTechs and other institutions fight financial crime. These solutions claim to bring ‘unparalleled efficiency’ and machine learning capabilities to fraud, risk and compliance professionals.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
