Major UK Building Society Brings Innovation to Income and Expenditure Analysis
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© 2015 Fair Isaac Corporation. All rights reserved. 1 COLLECTIONS AND RECOVERY Major UK Building Society Brings Innovation to Income & Expenditure Analysis Major UK Building Society Brings Innovation to Income and Expenditure Analysis Client: Major UK Building Society* Challenge: Assess consumer income and expenditure in compliance with UK regulatory rulings. Ensure the repayment type and amount considers the consumer’s financial position in terms of affordability. Solution: FICO ® Affordability Calculator Results: The firm is now able to quickly and consistently collect income and expenditure information from consumers to make compliant assessments for collections arrangements. The solution is easily configurable to adapt to changes from the regulator or the business to provide an excellent customer experience. New UK Regulation Driving Change • New UK regulation was creating challenges for one of the country’s largest building societies. • The firm needed a solution that could quickly, consistently and accurately help it evaluate a member’s financial position to make better, more compliant credit decisions. • The FICO ® Affordability Calculator delivered a tool for their agents to consistently complete income and expenditure assessments compliantly. The firm is looking to now extend this solution to include FICO’s self-service member view as well. * This case study is based on information from a FICO client that requested anonymity.
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Transcript of Major UK Building Society Brings Innovation to Income and Expenditure Analysis
© 2015 Fair Isaac Corporation. All rights reserved. 1
COLLECTIONS AND RECOVERYMajor UK Building Society Brings Innovation to Income & Expenditure Analysis
Major UK Building Society Brings Innovation
to Income and Expenditure Analysis
Client: Major UK Building Society*
Challenge: Assess consumer income and expenditure in compliance with UK regulatory rulings. Ensure the repayment type and amount considers the consumer’s financial position in terms of affordability.
Solution: FICO® Affordability Calculator
Results: The firm is now able to quickly and consistently collect income and expenditure information from consumers to make compliant assessments for collections arrangements. The solution is easily configurable to adapt to changes from the regulator or the business to provide an excellent customer experience.
New UK Regulation Driving Change• New UK regulation was creating
challenges for one of the country’s largest building societies.
• The firm needed a solution that could quickly, consistently and accurately help it evaluate a member’s financial position to make better, more compliant credit decisions.
• The FICO® Affordability Calculator delivered a tool for their agents to consistently complete income and expenditure assessments compliantly. The firm is looking to now extend this solution to include FICO’s self-service member view as well.
* This case study is based on information from a FICO client that requested anonymity.
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COLLECTIONS AND RECOVERYMajor UK Building Society Brings Innovation to Income & Expenditure Analysis
FICO and Debt Manager are trademarks or registered trademarks of Fair Isaac Corporation in the United States and in other countries. Other product and company names herein may be trademarks of their respective owners. © 2015 Fair Isaac Corporation. All rights reserved. 4171CS_EN 11/15 PDF
Bringing Innovation to Income and Expenditure Analysis UK regulators have established a series of principle-driven rather than prescriptive guidelines that require lenders to make a reasonable assessment of a consumer’s financial position before granting credit or establishing a repayment plan. One major UK building society was looking to create a more streamlined system — reducing rework and ensuring consistency in data captured from each member.
The first step was to assess the following key aspects of the regulation:1. Affordability is the building society’s
responsibility: They needed a solution that would demonstrate reasonable steps to assess the member’s repayment ability, without incurring financial difficulties or significant adverse consequences. Data capture would be a significant element of addressing this challenge.
2. Income and expenditure information must be accurate, complete and robust: The building society needed to capture sufficient information with a system that was flexible enough to gather data
directly from the member, but robust enough to validate against external data as well (such as a credit reference agency file or the Office of National Statistics). Additionally, the challenge was to build a system that could adapt quickly to future changes in the regulation and the market (increases/decreases in interest rates).
3. Data verification: In addition to capturing the data from members, they needed a quick, predictable and reasonable way to validate that the information they collected was complete and correct.
4. Independent assessment of joint borrowers: Finally, they needed a tool that would allow them to evaluate each borrower separately and collectively.
The second step was to find a vendor that could help them implement a solution that was robust, agile and streamlined.
Ensuring Speed, Consistency and FlexibilityThis building society selected the FICO® Affordability Calculator to help it meet its income and expenditure challenges, and they worked alongside
FICO to configure the application to meet its regulatory requirements. The questionnaire workflow was designed to ensure consistency for every income and expenditure assessment completed. The solution also offered data pre-population to speed assessments, while providing the flexibility to allow either agents or members to input the data.
Finally, the FICO solution can be easily modified to adapt to future regulator or market needs. Those changes can be related to the specific questions asked of a member or the behind-the-scenes calculations and rules. It also offers easy integration to other FICO products, such as FICO® Debt Manager™ 9, to help action the assessment within other core systems.
As a result, the FICO® Affordability Calculator is now helping this building society lead the way for UK financial institutions in meeting the income and expenditure regulations.
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solutions, visit us on the web
at: www.fico.com
