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Rising Interest Rates Fuel Demand for FICO AI-Powered Optimization

June 12, 2023 at 4:05 AM EDT

Deposit pricing optimization is critical for European banks such as Česká spořitelna that want to drive positive customer engagement




  • Mathematical optimization improves lenders’ ability to manage pricing changes in a period of rising interest rates
  • Česká spořitelna is among the European lenders that have purchased FICO optimization to improve pricing
  • FICO optimization tools are part of FICO® Platform

Banks across Europe are challenged by rising interest rates, which make it difficult to balance profitability and customer experience. Many are turning to the AI-powered optimization tools offered by leading global analytics firm FICO as part of its award-winning FICO® Platform.

More information: https://www.fico.com/en/solutions/optimization

“Setting new prices by trial and error to see how the market reacts is inefficient and damaging to customer relationships,” said Jens Dauner, vice president for Central Europe at FICO. “Mathematical optimization gives you the power to meet conflicting objectives, achieve or exceed targets and simulate responses so that you avoid setting prices that are uncompetitive or unprofitable.”

In savings and deposits product pricing, financial institutions need to make precise trade-offs between volume and margin whilst understanding the flow of funds in and out of the bank as well as between products. FICO optimization enables a deep understanding of the impact of price changes to both the front and back books, providing the ability to set prices that avoid “cannibalising” portfolios whilst achieving the portfolio goals for the products. In the current rising rate environment, banks can leverage the solution to determine how much of the rate increase is passed on to the consumer and when and whether to lead or follow its competitors.

Česká spořitelna, the Czech Republic’s oldest and largest bank, has already developed a center of excellence for optimization based on FICO technology. Last year, the bank won a FICO Decisions Award for its use of optimization in collections, improving efficiency of its collections operation by 25 percent.

“We are one of the most advanced banks in Europe in terms of our use of decision optimization,” said Dusan Sykora, head of Sales Planning and Performance Management, Retail Division, Česká spořitelna. “Expanding our use of FICO’s optimization technology to pricing decisions for deposit accounts and term deposits was a logical step in the current economic situation. With FICO technology, we are creating a much more dynamic and responsive pricing solution.”

Mathematical optimization tools are part of FICO® Platform, which provides the ideal decisioning foundation companies need to successfully achieve digital transformation. Glean unprecedented insight into your customer’s immediate and future needs by eliminating data silos and enabling interoperability between your enterprise applications. FICO Platform empowers businesses to rapidly build new AI and machine learning powered applications rapidly and cost-effectively. This is achieved by supporting standard, open source tools and technologies.

FICO® Platform received placement as a leader among top providers in “The Forrester Wave™: AI Decisioning Platforms, Q2 2023” report.

About FICO

FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics, AI and data science to improve operational decisions. FICO holds more than 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, manufacturing, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in nearly 120 countries do everything from protecting 2.6 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and other countries, improving risk management, credit access and transparency. Learn more at fico.com.

FICO is a registered trademark of Fair Isaac Corporation in the US and other countries.

For further comment on the FICO UK Credit Card activity contact:
Wendy Harrison/Parm Heer/Matthew Enderby
+44 (0)208 977 9132

Source: FICO