December 05 - the latest news regarding the  Experian Decision Analytics Bulgarian Credit Bureau.

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Alliance & Leicester, one of the UK’s major financial services groups, has announced that it has implemented Strategy Optimization from Experian Decision Analytics to determine the best terms to offer each customer who is accepted for a personal loan.  The solution will enable the bank to identify the best combination of interest rate and other terms of business to maximise return and loan take-up, whilst managing credit risk.

Simon Baum, Director of Credit & Risk from Alliance & Leicester, commented: “Strategy Optimisation allows us to enhance our decision-making process, and offer the most appropriate terms to our customers.  Optimisation enables our business to consider all the dimensions of a loan pricing decision simultaneously.  It isn’t just about risk; it’s a complex decision that involves the marketing, credit risk and finance teams working together with a common set of objectives. Strategy Optimization provides us with the flexibility and control that helps us to achieve our targeted business volumes, revenues and long-term bad debt levels within the context of changing market conditions, economic outlook and operational volumes.  We were very impressed with the flexibility of the solution.  Now, if there is a change in base rates, we can dynamically re-optimise our pricing and simulate the effect on our revenues, bad debt estimates and take-up rates before implementation. Experian Decision Analytics worked with us to quantify and build the business case before delivering the complete end-to-end solution within our timescales of seven months ensuring the business will see benefit within this financial year.”

Strategy Optimization works in real-time by simultaneously considering all the relevant data, in the context of the organisation’s operational business constraints and targets, before objectively determining the optimum terms for each individual.  A key component of the Strategy Optimization deployment is the flexible optimisation desktop software, which allows the business user to quickly plan different scenarios and strategies, simulating and forecasting the impact of changing lending policy, operational constraints and business targets on profitability before operational deployment.

Alliance & Leicester is the UK's seventh largest bank, with around 5.5m customers and £36bn of retail banking assets, Alliance & Leicester offers a broad range of financial services to personal and commercial customers in the UK.  The bank has been a member of the FTSE-100 index of leading shares since 1997, when it converted from its original mutual building society status.
 

Volkswagen Financial Services has been providing finance on vehicles for the last 10 years and lends over £1.5 billion a year. It has funded more than half a million new and used vehicles to date and supports more than 750 retailers selling the Volkswagen Group brands, including Audi, Bentley, Lamborghini, SEAT, Škoda, Volkswagen Passenger Cars and Volkswagen Commercial Vehicles.

The company has elected  Experian’s services following a review of its asset management needs and  thorough research into the market to review other providers of similar services. It was the third party data (TPD) excellence of Experian coupled with the accuracy of its data and quality of its service that were the deciding factors in Volkswagen Financial Services’ decision.

Experian will be providing Volkswagen Financial Services with a complete range of Automotive Decisioning and Data Solutions - including Transact for application processing, Hunter for fraud prevention, consumer credit scoring, credit bureau information – that will assist Volkswagen Financial Services in making fast, accurate and consistent decisions on motor finance applications by individuals and will ensure that they have access to the most up-to-date consumer information.

Operations Director at Volkswagen Financial Services, Martin Ballard, said: “Volkswagen Financial Services currently funds over 180,000 vehicles in the UK, so not only is accurate information of key importance, but the ability to deal with customer requests and make decisions instantly enables us to provide an efficient service and helps in retaining good relationships with them. We need to be able to determine quickly and confidently whether to lend to certain individuals and have confidence that our assets are recorded accurately. Experian helps us to do this by providing the means by which we can make fast, accurate and consistent lending decisions.

Volkswagen Financial Services is also utilising Hunter to help identify and prevent potentially fraudulent applications for finance. Hunter screens all applications for finance in order to help prevent potential fraudsters from successfully obtaining credit by automatically checking new applications and claims against previous applications, suspect information and extensive fraud databases.

Volkswagen Financial Services is committed to using the very best in fraud prevention to protect our business and customers from fraud and, with Experian’s support, we are able to ensure that  fraudulent, suspect, declined or multiple applications can be identified, along with any adverse or previous address information which an applicant may be deliberately hiding. This is crucial to the ongoing success of our business".

 

For further information on solution for:
- Automotive sector
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- Hunter
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There is no doubt, that in a country where 50,000 people will turn out in any weather to see the F1 Ferrari team test a new tyre, that Italians love their cars. In the last 20 years car ownership has grown by almost 60% to 1.7 people per car, one of the highest levels in the world, with 90% of the adult population owning a car [1]. The ACI (Automotive Club Italia) yearbook lists 34 million cars in Italy in 2005 for the population of 58 million, with Italians still preferring Italian made cars. Fiat is the market leader, although it achieved a market share of only 28% in 2004, far below its historical high of 60%.

Exceeded only by Germany and the UK, Italy is Western Europe’s third largest new car market with sales of 2.2 million new vehicles in 2004. 34% of Italians plan to buy a new car in 20051. However, this year has shown a slowdown of 6% in new car sales, with dealers blaming the European and national economy, higher business costs and the rising price of fuel. There is also a clear divide between the thriving economy of the north and the less industrial areas in the south, with more new cars being bought in the north and a higher number of ownership transfers (sales of used cars) in the south.

Italians still like to use cash, but over the last ten years, like much of Europe, credit finance has increased, and now accounts for 54% of all sales. The average spend of each purchaser has risen to over 7,000 euros [2].

Similarly, the financing choices have increased and consumers can now choose between banks, finance houses, automotive finance companies tied to dealers and the fast growing leasing market. Strong competition has driven down interest rates, giving consumers even more options.

Banks and finance companies offer the traditional personal loan, not tied to the car purchase, but the finance companies also target consumers and businesses through dealers and branch networks. Automotive finance companies are captive to the dealer network and sell both through direct channels and also indirectly through concessions and dealer franchises. The fastest growing area of car finance is the leasing and rental market and with over 500,000 new contracts in the last three years (about 1.7% of all cars registered in the country), it is rapidly increasing, especially in the business sector as the costs of car ownership rise. Many finance organisations are also starting to offer leasing packages as well as installment loans and in this market the biggest brands are Mercedes, BMW, VW and Fiat although there is a significant proportion of luxury marques, including Ferrari and Porsche.

Whilst the market is buoyant and credit granters are keen to acquire more customers, there is the ever-present threat of both fraud and emerging bad debt. To help address these issues, many organisations use credit scoring and automated decisioning solutions supplemented with credit bureau data. Whilst this technology has traditionally been associated with the banks and finance houses, the automotive credit grantors and, more recently, the Leasing companies have started to use these techniques. In this highly competitive market, lenders are using an iron hand in a velvet glove, offering new types of contracts, tempting terms and conditions (buy now, pay next year) but together with strict risk control. With the Italians’ love affair with the car, it would be a foolhardy move to grant credit unwisely, only to have to repossess the car later.

1. ACNielsen Global Car Ownership Ranking and survey - 2004

2. Assofin-Prometeia Observatory – 2004

Equally the profile of fraud continually evolves and types of fraud that were common a few years ago, such as fraud on lost and stolen cards, have been superseded by other types, including application fraud.

To protect themselves from this ever-increasing risk LVBS knew that they needed to strengthen their fraud detection environment and put in place a flexible solution able to react to the changing face of fraudsters.

The solution

Having evaluated a number of Fraud Prevention products available in the market place LVBS selected Hunter, the application fraud prevention solution from Experian Decision Analytics.

The results

The Hunter system went live in November 2003. Its impact was almost immediate, with significant financial savings that could be directly attributed to the solution. Coupled with the financial savings, the solution also enabled the LVBS fraud team to offer an improved service, working more quickly and more effectively, targeting higher risk applications. 

For LVBS, credit card application fraud losses have fallen by 90 per cent in the 18 months since it installed the Hunter solution. As well as reporting a drop of 90 per cent in its credit card application fraud losses, LVBS’s loadings to CIFAS (The UK's Fraud Prevention Service) have seen a dramatic drop of 82% on cases being paid out and subsequent financial loss being reported.

About Hunter

Hunter works by checking new applications against previous applications or claims, suspect information and extensive fraud databases, in order to identify previously fraudulent, suspect, declined or multiple applications and any adverse or previous address information that an applicant may be deliberately hiding. Hunter also enables organisations using the system to share data on fraudsters across different product types and industry sectors to help prevent fraud. 

The LVBS team has reduced its review turnaround time and now maintains application processing far more efficiently. Hunter has proven itself to be a valuable investigation tool, enabling the fraud team to:

·         Detect and stop fraud faster

·         Take preventative measures with the use of proven fraud rules

·         Reduce the paper trail of investigation

·         Manage incoming work more efficiently and effectively

·         Profile what a fraudster looks like to Liverpool Victoria and use this data elsewhere

Make valuable use of the searching facility to explore applications and the links between applications more successfully.

Liverpool Victoria is one of the UK's leading financial services companies, renowned for top performing products and an enviable record in customer services. The Liverpool Victoria group of companies provides more than 2.5 million members and customers with a broad range of financial services managing around £6.8 billion of customer’s money. The Group offers a broad range of products and services including; savings, investments, life assurance, home and motor insurance, asset management, banking and independent financial planning advice. This breadth ensures they are ideally placed to meet their members' needs.

“Hunter is a cutting edge fraud prevention tool that continues to redefine the boundaries of fraud detection. Hunter has become a vital part of LVBS's fraud detection processes. The system promises to be at the forefront of leading technologies for many years to come and LVBS hopes to be right there next to them.   The standard of service proves that, if you invest in a quality company that prides itself on excellent service and delivery; you can expect a quality reward at the end of it.” Declared Rachael Carney, Manager Team Leader Fraud Investigations Liverpool Victoria Banking Business Services.

SOFIA - STRATEGY MANAGEMENT FORUM, November 22

The Chairman of the Association of Commercial Banks, Levon Hampartzoumian, Latchezar Bogdanov, Managing Partner of Industry Watch Group and Giovanni Leone, Head of Credit Risk Management of Bulbank were amongst the speakers taking part in the Sofia Strategy Management Seminar. The event, proudly organised by Experian Decision Analytics at the Sofia Sheraton Balkan hotel on 22nd November 2005, was dedicated to the analysis of strategies and solutions for credit risk management and was geared towards Bulgarian financial institutions and respective regulatory bodies. A specific section of the agenda was dedicated to Anti-Money Laundering and fraud, a topic that has recently attracted the attention of the financial community in Bulgaria and worldwide.

Presentations are available upon request >>.

MOSCOW - STRATEGY MANAGEMENT SEMINAR 2005, December 6th

In December, the second annual Experian Decision Analytics Strategy Management Seminar took place at Marriott Tweskaya hotel in Moscow, with 100 delegates from over 40 financial companies operating in the Russian and CIS markets. Delegates had the opportunity to network, and compare local experiences with those of other market players as well as with international best practices.
 

The event focused on the analysis of strategies and solutions for Credit Risk Management and encompassed a broad range of topics and issues, such as best practices in the Loan Origination process, strategies and solutions in Collection and tools and methodologies for preventing transactional fraud.
 

The agenda included practical case histories presented by leading market players. Dmitry Vechkanov, (Rosbank) illustrated the implementation of Scoring system in Rosbank, Alexander Morozov, (FASP) shared with the attendees his practical experience in Collection management in Russia and Tomáš Lehotský (Slovenske kreditne karty, a.s.) presented the successful implementation of Experian Decision Analytics risk solutions in the credit card sector.

Presentations are available upon request >>.

COLLECTION WORKSHOP, Istanbul January 24th

Debt management and collection is an issue that affects any organisation that receives payments from customers after providing credit or services. Experian Decision Analytics is going to hold a collection decisioning seminar in Istanbul, in collaboration with the Banks Association of Turkey on January 24^th 2006. The seminar, addressed to Risk Managers and credit professionals, will highlight the different strategies to be adopted in each phase of the collection process, from the pre-delinquency phase, proactive approach and strategic approach in the early collection phase. The program will focus on the behavioural scorecard development process used by Experian Decision Analytics experts in the collection phase management, as well as Strategy design and implementation techniques. Latest reporting and monitoring techniques and an international case study will complete the program.

For further information please contact: clementina.papagianni@experian-scorex.mc
 

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