According to market surveys, close to 90% of businesses in financial-intensive industries – banking, insurance, credit cards, payments, etc. – see digital disruption as a looming threat. Conversely, and with somewhat staggering disparity, only a fraction of those companies – for example, just 3% of banks –consider their organisations to be ‘extremely’ disruption proof. The first statistic should come as little surprise - the ongoing proliferation of innovative digital technologies is, after all, seeing every industry worldwide facing its own transformation. The second should cause more concern for those operating in the global financial services sector. 

FICO can inform those decisions. The business is a leading proponent of digital decisioning through its Centralized Decisioning solution, a unifying infrastructure that enables businesses to use raw data to better inform decision making and greatly improve the customer centricity of products and services or, as FICO suggests, “to take the offensive and be a disruptor, not a disruptee”. Customer-centric services are a key driver of change in all industry sectors, and yet many are seeing difficulty in becoming more customer-centric – 44% of banks and 24% of fintechs, for example, are not confident in their ability to anticipate customer needs and proactively offer ideal products and services, as stated in the aforementioned research. 

According to FICO, this shortfall in achieving customer centricity is a result of many businesses’ operational frameworks relying on siloed, on-premises systems, data and processes. “Typically, in financial services, there are multiple disconnected ways in which companies interact with customers; you can bank with one institution but have savings or checking accounts, credit cards, mortgages and investments. What’s holding many banks back from truly embracing digital transformation is their starting from a siloed set of systems that don’t view you as a customer, but rather, view you as an account,” explains Bill Waid, General Manager of FICO Decision Management.   

Waid affirms that this is where technologies such as machine learning and advanced analytics play a key role, enabling a rapid assessment and decisioning process based on the information presented in the data. “Customers of ours that adopt this approach tend to start with the limited data they have, deploy these advanced machine learning models and strategies, understand the data and the build in rapid succession,” he notes. “Once you begin on such a journey, you then have the flexibility to pull in even more data, further enrich your process and continue to build. It’s an incremental change that works at ‘digital pace’ rather than IT pace, and it’s working very well in financial services and also increasingly in insurance.”

Such a system, according to Deveau, is one that FICO offers and something that those in the industry should consider “the holy grail: bringing all of your data together, building the models and technology as rapidly as possible, and move to making decisions and acting in real time. It’s that approach that will bring the financial institutions and insurers to the levels of success seen by retail companies.” 

In order to achieve this ‘holy grail’, FICO works with clients on three pillars. The first of these is the ability to attach data and data sources, stream that data in real time and apply analytics and strategies to understand it at a customer level. Secondly, organisations should use the rich/enriched data to make better decisions about a consumer and improve the level of user experience. Lastly, understand the impacts of how data is applied and the decisions that it leads to in terms of the wider business outcomes. 

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“We refer to this as business simulation,” says Waid, “and it’s all about the ability to make comparisons, to understand the outcome should you make changes, take more risks with a certain customer profile and so on. Some of our customers refer to this aspect as ‘the brain’, as it’s specifically focused on the wider intelligence around their business.”

Understandably, as is the case with businesses in many sectors that are wedded to legacy systems or a particular company culture, FICO sees some hesitancy to fully adopt these three pillars in too quick a success. Waid states his belief that, if you are to make changes you must do so with confidence, understand the process and embark on a true digital transformation journey, while Deveau notes that, while many of FICO’s customers begin with small steps, once they see the potential offered by its services growth follows in rapid succession. For any business, what moves the dial is results,” Waid adds. “Most of our clients see results when their first use case goes live. They see material impacts to their business very quickly and that commitment to change, that desire to take the organisation forward, means that they want more to follow.”

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