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© 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac.

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Presentation on theme: "© 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac."— Presentation transcript:

1 © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. A Strategic Risk Infrastructure Making Better Lending Decisions and Improving Customer Experience Andrew Jackson Head of Unsecured Credit Risk, Data, Systems and Credit Financial Planning Nationwide Building Society

2 © 2014 Fair Isaac Corporation. Confidential. Strategic Risk Infrastructure—single decision engine to extend more credit, faster at a lower cost. 2

3 Agenda © 2014 Fair Isaac Corporation. Confidential. ► Nationwide: Who We Are ► Our Challenge: Sub-Optimal Decision Infrastructure ► Our Strategic Solution and Why FICO ► Results ► Lessons Learned ► The Future 3

4 © 2014 Fair Isaac Corporation. Confidential. Nationwide Building Society ► Who We Are ► What Makes Us Different 4

5 © 2014 Fair Isaac Corporation. Confidential. Nationwide Building Society—Who We Are Number 1 for customer service ► 8% lead over highest in peer group UK’s 3 rd largest mortgage provider ► £144bn retail mortgage assets ► Soon to be number 2 ► Largest UK savings brand Mutually owned with assets of £200bn ► Owned entirely by members ► 93% of customers are members ► One vote per member 5

6 © 2014 Fair Isaac Corporation. Confidential. Nationwide Building Society: Our Retail Lending Products Credit Cards ► 2 million cards ► £8bn limits ► 25k applications ► £70m limits offered ► Behavioural score and multiple limit reviews for every account Mortgages ► 1.5 million loans ► £145bn asset ► 35k new applications ► 3k further advances ► £5bn application value Personal Loans ► 300k loans ► £2bn asset ► 24k applications ► £300m application value Current Account ► 6 million accounts ► £4bn limits ► 58k apps ► Behavioural score and multiple limit reviews for every account Decisions per month 6

7 © 2014 Fair Isaac Corporation. Confidential. Our Challenge 7

8 © 2014 Fair Isaac Corporation. Confidential. Our Challenge—A Sub-optimal Decision Infrastructure… Expensive ► Simple changes require much effort ► Multiple contracts ► We pay a 3 rd party to access our own data Complex ► Multiple decision engines ► Built up over many years ► Complex architecture Inconsistent ► Decisions can vary across systems ► Data we use can be up to 6 weeks old ► Inefficient data matching Inflexible ► Tied to single bureau provider ► Slow to market ► Not 24/7 ► Reliant on IT and 3 rd parties 8

9 © 2014 Fair Isaac Corporation. Confidential. A Strategic Solution 9

10 © 2014 Fair Isaac Corporation. Confidential. Our Solution—A New Decision Infrastructure… Cost-Effective ► Shorten time to make changes ► Simplified contract structure ► In-House data Simple ► Single Decision Engine ► Simplified architecture Consistent ► Shared logic across products ► More up to date data ► Better matching Flexible ► Multi bureau ► Speed to Market ► 24/7 service ► Less reliance on IT 10

11 © 2014 Fair Isaac Corporation. Confidential. What Makes This So Special for Nationwide True Multi-Bureau Highly Agile Single System for Everything 11

12 © 2014 Fair Isaac Corporation. Confidential. Why FICO? We Took A Balanced View 12 ► Agile Business Object Model ► Does everything we wanted ► Strategy promotion governance ► Scorecard code sanity check ► Forward dated rule changes ► Bulk test functionality Pros ► Restrictive data orchestration layer ► Users preferred Strategy Manager ► Steeper learning curve ► Less ‘interesting’ interface Cons

13 © 2014 Fair Isaac Corporation. Confidential. How Did We Pay for This Strategic Change? Personal Loans… Combine to deliver £130m more lending per year +5%+4.9m Before After Acceptance RateNumber of Pre-Assessed Customers #m % 13

14 © 2014 Fair Isaac Corporation. Confidential. How Did We Pay for This Strategic Change? Mortgages… £370m more lending per year +10% BeforeAfter % Mortgage Conversion Rate 14

15 © 2014 Fair Isaac Corporation. Confidential. How Did We Pay for This Strategic Change? Overall Annual Benefit So Far… +£30m -£1m RevenueCosts 15

16 © 2014 Fair Isaac Corporation. Confidential. What Did We Learn Along the Way? Don’t bite off more than you can chew Iteratively test impact on operations teams Don’t dumb down the data design Better models take more time to build Take care when integrating multiple supplier solutions 16

17 © 2014 Fair Isaac Corporation. Confidential. The Future—An Optimised Risk Infrastructure 17

18 © 2014 Fair Isaac Corporation. Confidential. Exploit Credit Cards Mortgages Current Accounts ► Overdrafts ► Collections ► UW Solutions Enable Personal Loans Specialist Lending ► Multi-Bureau All products Optimise ► Property Risk ► Paperless Process ► Behaviour Alerts The Future—An Optimised Risk Infrastructure 18

19 © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. Thank You! 19 Andrew Jackson Nationwide Building Society

20 © 2014 Fair Isaac Corporation. Confidential. Please rate this session online! 20 Andrew Jackson Nationwide Building Society

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