Look for this fraud prevention analytics article in Credit Risk International’s September 2004 issue. Authored by Experian’s Jon Jones and Experian-Scorex’s Chris Celka, the article looks at types of fraud perpetrated around the world and focuses on fraud prevention for each stage of the customer life cycle. Fraud such as identity theft, account takeover, skimming, phishing and bustouts are on the increase worldwide. For financial services, the goal is to utilize increasingly sophisticated analytical fraud prevention measures at every stage of the customer life cycle: to avoid fraud by not soliciting applications from previously ‘bad’ customers, to prevent fraud through sophisticated data comparison techniques at the new business stage, and to detect fraud in open accounts through analytically developed models designed to flag suspicious account behavior. This article discusses how fraudsters operate and the types of fraud solutions being offered, or developed, to combat losses at each life cycle stage. You’ll gain a broad knowledge of fraud and how markets around the world are impacted. So pick up the September 2004 issue of Credit Risk International. For a FREE trial copy of CRI Magazine, email Alfa-Romeo D Tan:alfa-romeo@crimag.com

The July/August 2004 issue of Collection Advisor published an article about PMP, Experian-Scorex’s service bureau solution for account management and collections, designed specifically for the needs of credit grantors, such as auto finance companies, banks, credit unions, retail, TEC and collection agencies. The article covers PMP’s four product segments, which include installment lending debt, revolving credit debt, credit union debt, and post charge-off debt. In addition, the article reports scoring models for PMP are based on industry-wide data or customized from the client’s account portfolio. Experian-Scorex provides a risk management consultant who helps integrate PMP’s features into collection and recovery efforts, and who also perform quarterly performance reviews and suggest improvements. Collection Advisor reports PMP "can significantly drive down delinquency rates and losses for a client." Often, clients experience a 20 to 40 percent gain in efficiency during the first year of service and a 30 to 60 percent gain over a two-year period. Such gains, reports Collection Advisor, "can enable a client to double the volume of accounts it handles within a three-year period without having to hire additional staff."

Experian-Scorex ramps up QA

Recognizing how critical quality is to our clients, Experian-Scorex is investing in its QA capabilities to build a state of the art Quality Assurance Program, designed with an end-to-end process methodology to facilitate rapid and efficient delivery. Investments in a quality assurance environment include infrastructure, hardware, tools, and people. Our goal is to create the industry's most admired service for on-boarding new clients, making enhancements to existing client systems and managing change. In addition, a Program Management Office and System Development Lifecycle standards have been established to facilitate and ensure business and technical requirements translate into reliable, flexible and cost efficient client solutions. From an overall infrastructure prospective, Experian-Scorex continues to invest in process methodologies such as disaster recovery system and back-up processes.

Standard Aggregation 101

One statistical risk tool used by financial institutions to predict payment behavior is a scorecard. Many scorecards rely explicitly on credit bureau generated attributes. Many creditors use data from two or more of the three credit bureaus. While there are standard formats by which creditors report account information, the information is represented and classified differently by each of the three credit bureaus. As a result, attribute aggregation instructions must be developed for each credit bureau. While seemingly straightforward, the different data formats create significant challenges to the creation of attributes with the same intrinsic values across the three bureaus. Experian-Scorex has invested significant resources in the research and development of attributes that are ‘data agnostic,’ called STandard AGGregation, or STAGG for short. 

STAGGs provided by Experian-Scorex are tri-bureau, which means they have been specified such that congruent values are calculated regardless of the input credit bureau. This also means scorecards, segmentations, and other financial tools can be created using data from one credit provider and then applied to bureau data from the other two bureaus. Experian-Scorex currently offers a set of 447 attributes on its latest release. To remain current and effective, STAGGs are updated regularly to adopt legislative changes, new available information, and to precisely define bureau attributes so the intrinsic value of the attribute is consistent over time despite changes to the input data. Please join us for a Standard Aggregation 101 Webinar on Tuesday, September 28 at 2pm Eastern to learn more about how STAGGs are used in scorecards, segmentation and prescreen strategies. Register here.

Facing the Future of banking

Leading executives share their vision for the future of the banking industry in a supplement to be distributed by American Banker, US Banker and Bank Technology News. Experian-Scorex weighs in with an article by Walt Ramsey, President of Experian-Scorex North America, where he discusses the evolution of Customer Relationship Management (CRM) into Customer Value Management (CVM). Ramsey notes the financial services sector was not immune to CRM hype in the 90s, which promised to dramatically change the client experience and give banks a larger competitive advantage.

What’s new and different about the CVM approach versus the CRM of the 90s? The type of customer level decisioning achieved with today’s CVM capabilities is truly a business solution and not simply a database solution. The beauty of a CVM approach comes from the dynamic, instant decisioning made from the "snapshot" of a customer’s broader relationships. It is a process of assessing the costs to service a customer versus income derived from the customer relationship. CVM now stands for focused and meaningful business solutions including customer level optimization and scoring, real-time decisioning, and Business Intelligence experts experienced in determining the most predictive variables and meaningful intelligence. Watch for the Future of Banking supplement in American Banker (September 15), US Banker (October) and Bank Technology News (October) and read Ramsey’s vision of CVM’s role in helping banks achieve successful futures.

Vision Conference 2004 - October 24-28, 2004

Meet future financial services industry challenges head-on at Experian’s 24th annual Vision 2004 Conference. Receive real-world answers to tough questions about how to improve business performance at every stage of the Customer Life Cycle. Vision 2004, to be held at the Boca Raton Resort & Club in Boca Raton, Fla., is the most exciting Vision conference ever – with more industry experts, more interactive discussions, more value-added solutions, more client success stories, more networking opportunities and additional fraud sessions. Attending Vision 2004 is a decisive action you can take now to address the challenges affecting your organization’s profitability and vulnerabilities. Compelling guest speakers and industry experts will show you how to use the power of cutting-edge technology and insightful analysis to become – and remain – a profit leader. Receive email updates for more details about the Vision 2004 conference as they become available, or Register now.

Workshops & Webinars

Collection decisioning workshop
September 23-24, 2004, Orlando, FL
Hyatt Regency Grand Cypress Resort
Ideal for risk managers and credit professionals, this workshop focuses on the behavior scorecard development process used by our decisioning experts, as well as strategy design and implementation techniques for successful account management. Register now!

Maximizing customer satisfaction via quality data (Webinar) - Sept. 9, 2004, 2pm Eastern
This session will assist you in defining the quality of your data, balancing the impact of privacy risks and promoting a culture of data advocacy. Register now!

Advanced risk-based pricing (Webinar) - Oct. 7, 2004, 2pm Eastern
This Webinar is designed to help you understand the dynamics of a cost-plus pricing model for new applicant pricing. Plus, you’ll learn how to set pricing tiers based on a scoring model validation or forecast. Register now!

The new world of bureau risk scores: Scorex PLUS^SM - Oct. 14, 2004, 2 pm Eastern
Until now, you've had two scoring alternatives for managing risk: traditional bureau risk models (that often fall short in predictability) or more costly custom models. Experian-Scorex developed Scorex PLUS to give you a more precise, high-performance scoring alternative. Register now!

Optimization (Webinar) - Nov. 4, 2004, 2pm Eastern
Meet business goals while satisfying real-world business constraints with optimization. This Webinar shows you how to achieve significant competitive gains such as 120+ percent improvements in "good" balances on credit cards or 10 -100+ percent improvements in marketing performance. Register now!

Learn more about our workshops and webinars at http://www.experian.com/corporate/event_calendar.html.

Experian-Scorex provides solutions that enrich customer data and allow organizations around the world to proactively manage their relationships with their clients.  For more information on industry news, forthcoming events, contact details, the latest Basel II news and details of all our solutions please visit the new Experian-Scorex website.

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