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Fair Isaac (FICO) Rides on Solid Portfolio, Expanding Clientele
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Fair Isaac (FICO - Free Report) is benefiting from the growing adoption of its FICO Score 10 T. Encompass Lending Group and Equity Resources are the latest mortgage lenders selecting FICO’s most advanced Scores.
FICO Score 10 and 10 T were launched by Fair Isaac in January 2020, while FICO Score 9 and FICO Score 8 are the most distributed scores currently.
Expanding usage of FICO Score 10 and 10 T by the mortgage industry has been particularly noteworthy. Clients with more than $125 billion in annualized mortgage originations and roughly $380 billion in eligible mortgage portfolio servicing have signed up for the FICO Score 10 T.
Equity Resources, Inc., a central Ohio-based mortgage lender operating in 20 states plus the District of Columbia, is known for its diverse financing solutions, including FHA, USDA, and VA loans.
Encompass Lending Group, located in the greater Houston area, serves 46 states and the District of Columbia, focusing entirely on selling its loans to aggregators rather than government-sponsored enterprises.
The adoption of FICO Score 10 T is a strategic move to boost their origination capabilities. The new scoring model enhances precision in lending decisions, allowing lenders to better manage credit risk and default rates. It promises to increase mortgage originations by up to 5% without additional credit risk or reduce default risk and losses by up to 17%. Additionally, the model’s predictive power aids in more accurate cash flow projections.
FICO’s Solutions Drive Clientele
The FICO platform is being adopted by global banks, including Singapore’s GXS Bank. It used the FICO Platform to streamline its onboarding process for GXS FlexiLoan.
Nedbank, one of South Africa’s leading banks, through strategic collaboration with FICO, has established the Risk Intelligence Centre (RIC), which aims to consolidate various financial crime risk factors into a unified framework.
The RIC serves as a centralized repository, leveraging FICO technology to streamline processes such as relationship offboarding and account closures due to financial crime concerns. The key to the success of this initiative is the FICO Identity Resolution Engine, which enables Nedbank to establish robust identity resolution capabilities.
First National Bank of Omaha, one of the largest privately held banks in the United States, has worked with FICO to offer FICO Scores to its customers by participating in the FICO Score Open Access program.
FICO’s analytics and digital decision-making technology are helping its clients fight financial crime. Per a survey of 1000 Americans conducted by Fair Isaac, fraud and identity protection are top concerns of customers, which banks need to address while delivering more personalized experiences to increase customer trust.
FICO’s recent survey of Indian, Indonesian and Malaysian customers also identified fraud protection as their top consideration for selecting financial services providers.
Its expanding partner base is noteworthy. FICO recently inked a partnership with Cognizant (CTSH - Free Report) to launch a cloud-based real-time payment fraud prevention solution powered by FICO Falcon Fraud Manager.
FICO-Cognizant joint offering leverages AI and machine learning to help banks and other payment service providers in North America protect their customers from fraud.
The expanding clientele bodes well for FICO’s top-line growth trajectory in 2024. Fair Issac expects total revenues of $1.69 billion for this fiscal year.
The Zacks Consensus Estimate for revenues is pegged at $1.72 billion, indicating year-over-year growth of 13.45%. The consensus mark for fiscal 2024 earnings is pegged at $19.75 per share, unchanged over the past 30 days.
Image: Shutterstock
Fair Isaac (FICO) Rides on Solid Portfolio, Expanding Clientele
Fair Isaac (FICO - Free Report) is benefiting from the growing adoption of its FICO Score 10 T. Encompass Lending Group and Equity Resources are the latest mortgage lenders selecting FICO’s most advanced Scores.
FICO Score 10 and 10 T were launched by Fair Isaac in January 2020, while FICO Score 9 and FICO Score 8 are the most distributed scores currently.
Expanding usage of FICO Score 10 and 10 T by the mortgage industry has been particularly noteworthy. Clients with more than $125 billion in annualized mortgage originations and roughly $380 billion in eligible mortgage portfolio servicing have signed up for the FICO Score 10 T.
Equity Resources, Inc., a central Ohio-based mortgage lender operating in 20 states plus the District of Columbia, is known for its diverse financing solutions, including FHA, USDA, and VA loans.
Encompass Lending Group, located in the greater Houston area, serves 46 states and the District of Columbia, focusing entirely on selling its loans to aggregators rather than government-sponsored enterprises.
The adoption of FICO Score 10 T is a strategic move to boost their origination capabilities. The new scoring model enhances precision in lending decisions, allowing lenders to better manage credit risk and default rates. It promises to increase mortgage originations by up to 5% without additional credit risk or reduce default risk and losses by up to 17%. Additionally, the model’s predictive power aids in more accurate cash flow projections.
FICO’s Solutions Drive Clientele
The FICO platform is being adopted by global banks, including Singapore’s GXS Bank. It used the FICO Platform to streamline its onboarding process for GXS FlexiLoan.
Nedbank, one of South Africa’s leading banks, through strategic collaboration with FICO, has established the Risk Intelligence Centre (RIC), which aims to consolidate various financial crime risk factors into a unified framework.
The RIC serves as a centralized repository, leveraging FICO technology to streamline processes such as relationship offboarding and account closures due to financial crime concerns. The key to the success of this initiative is the FICO Identity Resolution Engine, which enables Nedbank to establish robust identity resolution capabilities.
First National Bank of Omaha, one of the largest privately held banks in the United States, has worked with FICO to offer FICO Scores to its customers by participating in the FICO Score Open Access program.
FICO’s analytics and digital decision-making technology are helping its clients fight financial crime. Per a survey of 1000 Americans conducted by Fair Isaac, fraud and identity protection are top concerns of customers, which banks need to address while delivering more personalized experiences to increase customer trust.
FICO’s recent survey of Indian, Indonesian and Malaysian customers also identified fraud protection as their top consideration for selecting financial services providers.
Its expanding partner base is noteworthy. FICO recently inked a partnership with Cognizant (CTSH - Free Report) to launch a cloud-based real-time payment fraud prevention solution powered by FICO Falcon Fraud Manager.
FICO-Cognizant joint offering leverages AI and machine learning to help banks and other payment service providers in North America protect their customers from fraud.
The expanding clientele bodes well for FICO’s top-line growth trajectory in 2024. Fair Issac expects total revenues of $1.69 billion for this fiscal year.
The Zacks Consensus Estimate for revenues is pegged at $1.72 billion, indicating year-over-year growth of 13.45%. The consensus mark for fiscal 2024 earnings is pegged at $19.75 per share, unchanged over the past 30 days.
Zacks Rank & Stocks to Consider
FICO currently carries a Zacks Rank #3 (Hold).
Arista Networks (ANET - Free Report) and Dropbox (DBX - Free Report) are some better-ranked stocks in the broader Zacks Computer & Technology sector, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rates for Arista Networks and Dropbox are currently pegged at 16.07% and 11.44%, respectively.