FICO launches next-generation Originations Solution for digital-first account openings

FICO Originations Solution, Powered by FICO Platform, makes loan origination decision-making faster, smarter and more profitable for financial services providers, putting customers in the driver's seat.

FICO announced today a new loan origination solution powered by its FICO Platform - and delivered globally on Amazon Web Services (AWS) Cloud - enabling financial services businesses the ability to make faster, smarter and more profitable decisions by further automating the loan origination process.

According to the Silicon Valley-based data analytics company that pioneered the FICO credit score used to predict the likelihood of customers paying back a loan on time, the FICO Originations Solution, Powered by FICO Platform, "empowers businesses to deliver exceptional, personalized customer experiences by automating a frictionless customer journey throughout the loan origination process."

Loan origination occurs when a buyer requests and obtains a loan from a lender or bank. It consists of several stages, starting with the loan application from the borrower, the submission of necessary documentation, the lender's assessment of the application and final granting of the loan.

For years, customers had to apply for a loan either in person at a bank branch or over the phone. Those with above-average to excellent credit (a high FICO score) could be approved for a low rate instantly, often within a day, while those with a lower FICO score required additional time - usually a few days - for the lender's back office to review the customer's financial and personal background. But with the advent of Cloud computing in the past decade, use of online resources, increased competition from fintech firms, digital lenders and other banking alternatives, financial services companies have had to step up the loan process to compete for customer experience.

"Customers want speed, convenience and personalization," said Tim Van Tassel, vice president and head of product management at FICO. "Legacy technology has become inflexible and outgrown; agility and ability to move into the future quickly and extend solutions is really critical to what we see in the marketplace," he told ZDNet during a product demonstration.

FICO said that the pandemic has played a significant role in forcing financial institutions globally to rethink their business strategies to better compete in a digital-first economy. According to a recent FICO study, more than 70% of customers worldwide are willing to open an account digitally using an app or website. Half of all customers, however, abandon the digital onboarding process if they must answer more than 10 questions, and only 21% of respondents said they would complete the process if asked to move outside digital channels such as by visiting a branch.

While financial services providers seek to use every bit of available data to make better decisions for their customers, they continue to seek greater efficiency across their products and channels. FICO's Originations Solution lets financial services providers make precise, value-based decisions at origination while helping them grow more profitable portfolios and manage customer-level risk, according to the company.

Van Tassel said that financial services providers today need data-hungry, analytics-ready, agile, extensible systems in order to compete in a digital-first economy. "FICO Originations Solution provides the digital and analytic sophistication that enables financial institutions to offer the safety, convenience, and personalization that customers look for during the account opening process through their chosen channel, while closely managing customer-level risk," he added.

And being AWS-cloud native, FICO Originations Solution provides financial institutions with the open, extensible platform they need to deliver personalized experiences today's digitally savvy customers expect. "What we deliver is intended for a very sophisticated user, not someone who is going after a market and saying that they're just going to follow the same policy everyone else does, but rather someone who says I'm going to use my understanding of my customers differently and how they apply that," Van Tassel told ZDNet. 

According to the company, by having FICO Platform drive the Originations Solution, organizations can see the following benefits:

Fast, flexible, frictionless digital account opening: Enabling financial institutions to easily deliver those experiences, no matter where the organization is in their digital transformation journey.

Efficient, IP-laden configuration templates across domains: Configurable templates incorporate decades of leading FICO origination IP and best practices, enabling business users to adopt existing end-to-end origination solutions that meet their needs, rather than waiting for IT staff to develop solutions for them.

Improved automation, autonomy, and access: Financial institutions can reduce their dependence on multiple technology vendors by automating and replacing their legacy systems with a unified, centralized, cloud-based solution that works across products, regions and lines of business.

More precise, data-driven predictions about what customers will do: Businesses can use the right combination and sequencing of data to drive insights, then use analytics to mathematically identify the best possible decisions and products for each customer.

Easy access to 130-plus global data sources through FICO's data library: With increased access to data, financial institutions can make faster and better customer decisions across every line of business.

Future-proof, agile decision-making that's easily scaled across multiple regions: Standardize and centralize legacy originations systems across multiple regions to drive greater efficiencies, transparency and big economies of scale.

Underlying capabilities provide a foundation for the future: Firms can easily add more customer-centric decisioning applications in other areas of the business, such as customer management or fraud prevention. 

Nikhil Behl, chief marketing officer at FICO, said in a company announcement that the additional benefits of deploying solutions on FICO Platform include the ability to share decision assets and platform capabilities across the entire customer lifecycle, from onboarding and originations through customer management, fraud and collections optimization. "FICO Platform goes beyond any single use case to give firms true customer-centricity with deep, real-time, 360-degree insights into every customer touch, across all channels, for the full duration of the customer lifecycle," he said.

The company didn't provide details on pricing, but Van Tassel told ZDNet that it's priced competitively on a per-application basis.