Welcome!

News Feed Item

FICO-Efma Survey: European Risk Managers Say Increasing Lending is More Important than Increasing Capital

-- Customer experience and profitability are also top priorities

LONDON, Jan. 14, 2014 /PRNewswire/ -- As European economies recover from the recession, risk managers say increasing lending will be a higher priority for 2014 than increasing capital. That was one finding from the ninth European Credit Risk Survey, conducted by FICO (NYSE:FICO), a leading predictive analytics and decision management software company, and Efma.

(Logo: http://photos.prnewswire.com/prnh/20111010/CG83314LOGO)

At the top of the list of risk management priorities for 2014 were improving risk management processes and systems (96 percent of respondents named it a priority or a top priority), improving the customer experience (also 96 percent) and growing the profitability of existing customers (93 percent). These were also the top priorities for risk managers in the U.S. and Canada, according to a similar survey by FICO and PRMIA released today.

Some 85% of respondents said increasing lending to consumers is a priority, and 74 percent said the same for lending to small businesses. By contrast, more than half of respondents (51 percent) said increasing capital to meet regulatory requirements is not one of their bank's risk priorities for 2014.

"Regulatory compliance is still top-of-mind for banks, but the pressure to build capital has eased and banks need to apply their capital to support new business growth," said Daniel Melo, senior director of Fair Isaac Advisors, FICO's consulting group. "New lending to consumers and small businesses is a higher priority, but the use of capital today demands better results, so risk managers will focus not only on increasing customer profitability but also on improving the customer experience, to build loyalty and fuel new sales."

"This forecast is good news for consumers and the European economy," said Patrick Desmares, secretary general of Efma. "While credit demand will not return to normal for some time, the supply side of the equation appears to be recovering."

While the priorities for capital may have changed, the focus on regulations has not. "Like most other financial institutions, our priority continues to be driving forward the regulatory compliance agenda," said Denis Hall, chief risk officer of GE Capital International. "The demands from our lead regulator, the Federal Reserve, as well as from regulators across all the countries we serve, continue to increase, and that will not stop in 2014. The greatest concern I have is how to ensure that this heightened risk awareness continues once times return to the heady days when volume is king."

Lenders Take New Collections Approaches
The forecast for delinquencies is more optimistic in the new survey, with fewer than 50 percent of respondents forecasting an increase in delinquencies for all products, and most respondents expecting mortgage and auto loan delinquencies to remain at their current levels. However, these forecasts vary widely by market, and lenders interviewed for the survey discussed new ways they are working with distressed borrowers.

"We continually optimize our strategies for working with customers who experience financial difficulties," said Maria Topaler, credit and risk head at Germany's Targobank. "For example, during the 2009 crisis, unemployment in Germany increased only slightly, but some of our customers experienced a temporary income reduction because of the short working hours program, which was introduced by the German government to help avoid major layoffs and encourage companies to keep qualified workers through the crisis. We implemented a new remedial tool for the impacted customers: a temporary reduction of monthly installments for the duration of the short working hours program. I think this was a very timely measure that helped both our customers and our bank to get through the difficult times."

"We have put in place a debt restructuring policy that enables our customers with difficulties to spread their repayments over a period which takes account of their financial capacity," said Michel Galiay, director of risk for retail banking in France at Societe Generale. "We have organised our recovery procedures to ensure that they are more reactive, in order to improve our efficiency. At the same time, by being proactive before difficulties emerge, we are able to avoid worst-case scenarios and adjust repayment schedules to reflect the new financial constraints of our customers."

Some 73 representatives from 32 European countries and 66 institutions participated in the ninth European Credit Risk Survey. A detailed report, including specific results for the UK/Ireland, Germany/Austria/Switzerland and Central and Eastern Europe, is available online. Participants included credit-granting institutions ranging from local banks to global institutions.

About Efma
As a global not-for-profit organisation, Efma brings together more than 3,300 retail financial services companies from over 130 countries. With a membership base consisting of almost a third of all large retail banks worldwide, Efma has proven to be a valuable resource for the global industry, offering members exclusive access to a multitude of resources, databases, studies, articles, news feeds and publications. Efma also provides numerous networking opportunities through working groups, online communities and international meetings.

For more information: www.efma.com

About FICO
FICO (NYSE: FICO), formerly known as Fair Isaac, is a leading analytics software company, helping businesses in 80+ countries make better decisions that drive higher levels of growth, profitability and customer satisfaction. The company's groundbreaking use of Big Data and mathematical algorithms to predict consumer behavior has transformed entire industries. FICO provides analytics software and tools used across multiple industries to manage risk, fight fraud, build more profitable customer relationships, optimize operations and meet strict government regulations. Many of our products reach industry-wide adoption — such as the FICO® Score, the standard measure of consumer credit risk in the United States. FICO solutions leverage open-source standards and cloud computing to maximize flexibility, speed deployment and reduce costs. The company also helps millions of people manage their personal credit health. FICO: Make every decision count. Learn more at www.fico.com.

For FICO news and media resources, visit www.fico.com/news.

FICO and "Make every decision count" are trademarks or registered trademarks of Fair Isaac Corporation in the US and other countries.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
We are always online. We access our data, our finances, work, and various services on the Internet. But we live in a congested world of information in which the roads were built two decades ago. The quest for better, faster Internet routing has been around for a decade, but nobody solved this problem. We’ve seen band aid approaches like CDNs that attack a niche's slice of static content part of the Internet, but that’s it. It does not address the dynamic services-based Internet of today. It doe...
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
Qosmos has announced new milestones in the detection of encrypted traffic and in protocol signature coverage. Qosmos latest software can accurately classify traffic encrypted with SSL/TLS (e.g., Google, Facebook, WhatsApp), P2P traffic (e.g., BitTorrent, MuTorrent, Vuze), and Skype, while preserving the privacy of communication content. These new classification techniques mean that traffic optimization, policy enforcement, and user experience are largely unaffected by encryption. In respect wit...
While DevOps promises a better and tighter integration among an organization’s development and operation teams and transforms an application life cycle into a continual deployment, Chef and Azure together provides a speedy, cost-effective and highly scalable vehicle for realizing the business values of this transformation. In his session at @DevOpsSummit at 19th Cloud Expo, Yung Chou, a Technology Evangelist at Microsoft, will present a unique opportunity to witness how Chef and Azure work tog...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...
SYS-CON Events announced today that Isomorphic Software will exhibit at DevOps Summit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Isomorphic Software provides the SmartClient HTML5/AJAX platform, the most advanced technology for building rich, cutting-edge enterprise web applications for desktop and mobile. SmartClient combines the productivity and performance of traditional desktop software with the simp...
Although it has gained significant traction in the consumer space, IoT is still in the early stages of adoption in enterprises environments. However, many companies are working on initiatives like Industry 4.0 that includes IoT as one of the key disruptive technologies expected to reshape businesses of tomorrow. The key challenges will be availability, robustness and reliability of networks that connect devices in a business environment. Software Defined Wide Area Network (SD-WAN) is expected to...
Between the mockups and specs produced by analysts, and resulting applications built by developers, there exists a gulf where projects fail, costs spiral, and applications disappoint. Methodologies like Agile attempt to address this with intensified communication, with partial success but many limitations. In his session at @DevOpsSummit at 19th Cloud Expo, Charles Kendrick, CTO at Isomorphic Software, will present a revolutionary model enabled by new technologies. Learn how business and deve...
DevOps at Cloud Expo – being held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Am...
Developing software for the Internet of Things (IoT) comes with its own set of challenges. Security, privacy, and unified standards are a few key issues. In addition, each IoT product is comprised of (at least) three separate application components: the software embedded in the device, the back-end service, and the mobile application for the end user’s controls. Each component is developed by a different team, using different technologies and practices, and deployed to a different stack/target –...
SYS-CON Events announced today that Hitrons Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Hitrons Solutions Inc. is distributor in the North American market for unique products and services of small and medium-size businesses, including cloud services and solutions, SEO marketing platforms, and mobile applications.
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Enterprises have forever faced challenges surrounding the sharing of their intellectual property. Emerging cloud adoption has made it more compelling for enterprises to digitize their content, making them available over a wide variety of devices across the Internet. In his session at 19th Cloud Expo, Santosh Ahuja, Director of Architecture at Impiger Technologies, will introduce various mechanisms provided by cloud service providers today to manage and share digital content in a secure manner....
As the world moves toward more DevOps and Microservices, application deployment to the cloud ought to become a lot simpler. The Microservices architecture, which is the basis of many new age distributed systems such as OpenStack, NetFlix and so on, is at the heart of Cloud Foundry - a complete developer-oriented Platform as a Service (PaaS) that is IaaS agnostic and supports vCloud, OpenStack and AWS. Serverless computing is revolutionizing computing. In his session at 19th Cloud Expo, Raghav...