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FICO Says Asian Banks Can Gain Double-Digit Growth In Customer Profitability With More Focus On Existing Customers

SINGAPORE, Dec. 19, 2012 /PRNewswire/ -- FICO (NYSE:FICO), the leading provider of analytics and decision management technology, today called on Asian lenders to strengthen their portfolios from within by cultivating existing customers for untapped profit potential. According to Dan McConaghy, president, FICO in Asia Pacific, continued macroeconomic pressures, decreased rates of regional growth, more expensive capital, and competition from non-traditional lenders demand that Asian lenders ensure they are attracting the best customers, continuing to lend to them, and realizing the full value of the relationship.

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"Asian lenders are quickly embracing the notion of having to do business with customers, not accounts," McConaghy said. "Yet while many banks in Asia Pacific are beginning to adopt customer-level decisioning, there is increased urgency to improve on these efforts and shift away from over-reliance on new customers, fees and credit limit increases to drive growth."     

This need to expand customer-level decisioning and increase customer profitability was echoed at the recent third-annual FICO APAC Chief Risk Officer Forum, a gathering of more than 30 risk officers from retail banks around the Asia Pacific region. Findings and discussions from this closed-door meeting held last week, highlighted the increasing role of risk officers in enabling profitable growth through a more fine-tuned risk assessment of a customer across accounts and products.

"Customer-level management is not a new idea, but for many Asian banks it's still a vision rather than reality," said Dr. Andrew Jennings, chief analytics officer and head of FICO Labs. "To keep pace with the front-runners, banks still operating in product-specific silos will need to move ahead with data integration initiatives, harness the techniques and technologies of Big Data, and tap additional data sources such as transaction data on existing current or DDA accounts."

Banks should not be intimidated by the idea of achieving a 360-degree view of the customer. As Dr. Jennings told the risk officers in attendance at the forum, there are usually 20-30 aspects about each customer that a bank needs to understand. These will provide the basis for 80% to 90% of the profit lift.

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