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Fair Isaac's (FICO) AI Tools Help Lenders to Improve Pricing
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Fair Isaac (FICO - Free Report) recently announced that various European Banks have been adopting its AI-powered optimization tools that improve lenders’ ability to manage pricing changes amid rising interest rates.
Banks across Europe are facing challenges from rising interest rates, making it difficult to balance profitability and customer experience. Major banks like ??eská spo??itelna have developed FICO optimization to create a dynamic pricing solution and ensure positive customer engagement.
In savings and deposits product pricing, banks need to make trade-offs between volume and margin whilst understanding the flow of funds. FICO optimization enables a deep understanding of the impact of price changes, providing the ability to set prices that avoid cannibalizing portfolios, thereby achieving portfolio goals.
Banks practice trial and error to determine prices and see how the market reacts which results in inefficiency and damaging customer relationships. FICO’s mathematical optimization tools address this issue by laying out the ideal decisioning foundation institutions’ need to avoid setting prices that are uncompetitive or unprofitable.
FICO’s Strong Product Portfolio to Boost Prospects
Shares of FICO have gained 33.6% year to date compared with the Zacks Computer and Technology sector’s increase of 32.4% over the same time frame.
The outperformance can be attributed to its strong product portfolio and ability to empower businesses to rapidly build cost-effective AI- and ML-powered applications.
High demand for its scores and software solutions is well reflected in the strong net-retention rate of current customers. FICO continues to focus on helping clients maximize their customer experience by improving and expanding client’s solutions.
In second-quarter fiscal 2023, its software dollar-based net retention rate was 114%, with platform software at 146% and non-platform software at 105%.
It has a strong customer base with enterprises like Mastercard (MA - Free Report) , Telus (TU - Free Report) and Truist Financial (TFC - Free Report) . These companies are adopting FICO’s solutions to improve its business processes.
Mastercard uses FICO Customer Communication Services and FICO Falcon Platform to improve its fraud protection platform and prevent fraud losses for institutional lenders.
Telus deployed FICO’s application fraud solution to improve operational efficiency, help manage high volumes and combat the risk of subscription fraud.
Truist Financial adopted FICO Origination Manager and FICO Customer Communication Services solutions to transform its origination processes and improve business lending process for the bank and its customers.
FICO Leveraging on AI to Boost The Top Line
The company experienced strong growth in its scores business, primarily driven by increased origination revenues. Its scores revenues increased 8% year over year to $198 million in the fiscal second quarter.
FICO continues scaling its latest analytic and AI technology to optimize consumer interactions and revolutionize businesses through digital transformation.
The Zacks Consensus Estimate for third-quarter fiscal revenues is pegged at $380.68 million, indicating a 9.09% growth from the year-ago quarter’s reported figure.
The consensus mark for third-quarter fiscal 2023 earnings remained unchanged at $5.32 per share in the past 30 days, indicating a year-over-year rise of 19.02%.
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Fair Isaac's (FICO) AI Tools Help Lenders to Improve Pricing
Fair Isaac (FICO - Free Report) recently announced that various European Banks have been adopting its AI-powered optimization tools that improve lenders’ ability to manage pricing changes amid rising interest rates.
Banks across Europe are facing challenges from rising interest rates, making it difficult to balance profitability and customer experience. Major banks like ??eská spo??itelna have developed FICO optimization to create a dynamic pricing solution and ensure positive customer engagement.
In savings and deposits product pricing, banks need to make trade-offs between volume and margin whilst understanding the flow of funds. FICO optimization enables a deep understanding of the impact of price changes, providing the ability to set prices that avoid cannibalizing portfolios, thereby achieving portfolio goals.
Banks practice trial and error to determine prices and see how the market reacts which results in inefficiency and damaging customer relationships. FICO’s mathematical optimization tools address this issue by laying out the ideal decisioning foundation institutions’ need to avoid setting prices that are uncompetitive or unprofitable.
Fair Isaac Corporation Price and Consensus
Fair Isaac Corporation price-consensus-chart | Fair Isaac Corporation Quote
FICO’s Strong Product Portfolio to Boost Prospects
Shares of FICO have gained 33.6% year to date compared with the Zacks Computer and Technology sector’s increase of 32.4% over the same time frame.
The outperformance can be attributed to its strong product portfolio and ability to empower businesses to rapidly build cost-effective AI- and ML-powered applications.
High demand for its scores and software solutions is well reflected in the strong net-retention rate of current customers. FICO continues to focus on helping clients maximize their customer experience by improving and expanding client’s solutions.
In second-quarter fiscal 2023, its software dollar-based net retention rate was 114%, with platform software at 146% and non-platform software at 105%.
It has a strong customer base with enterprises like Mastercard (MA - Free Report) , Telus (TU - Free Report) and Truist Financial (TFC - Free Report) . These companies are adopting FICO’s solutions to improve its business processes.
Mastercard uses FICO Customer Communication Services and FICO Falcon Platform to improve its fraud protection platform and prevent fraud losses for institutional lenders.
Telus deployed FICO’s application fraud solution to improve operational efficiency, help manage high volumes and combat the risk of subscription fraud.
Truist Financial adopted FICO Origination Manager and FICO Customer Communication Services solutions to transform its origination processes and improve business lending process for the bank and its customers.
FICO Leveraging on AI to Boost The Top Line
The company experienced strong growth in its scores business, primarily driven by increased origination revenues. Its scores revenues increased 8% year over year to $198 million in the fiscal second quarter.
FICO continues scaling its latest analytic and AI technology to optimize consumer interactions and revolutionize businesses through digital transformation.
This Zacks Rank #3 (Hold) company raised its guidance for fiscal 2023. It expects total revenues of $1.48 billion, suggesting a 5.7% growth from fiscal 2022 levels. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for third-quarter fiscal revenues is pegged at $380.68 million, indicating a 9.09% growth from the year-ago quarter’s reported figure.
The consensus mark for third-quarter fiscal 2023 earnings remained unchanged at $5.32 per share in the past 30 days, indicating a year-over-year rise of 19.02%.