“The awareness and adaptability for the local banks in this matter is low. It needs to improve. Fewer than 10 million citizens are using credit cards; the country is looking to double that over the next 12 months. With that growth comes tremendous opportunity; but with that growth can also come considerable risk as we saw in other countries that did not do it right,” said Rita Chakravarti, analytic presales director at FICO Asia-Pacific, in an e-mail interview with the BusinessMirror.
Although banks—particularly those in the Philippines and other emerging credit markets in the Asia-Pacific region—are eager to grow their credit-card portfolio, Chakravarti said these institutions need to pursue this without taking on unreasonable amounts of risk.
As Philippine banks are creating or expanding their consumer credit businesses, she said they need to understand the creditworthiness of consumers before granting credit.
“Investing in analytics and decision management is important for banks of all sizes. In fact, innovation can often be a differentiator for smaller banks, as they can act more nimbly and creatively,” she said.
Chakravarti said there are encouraging signs in the Philippine market as response to FICO solutions has been greater and faster than the company anticipated.
“When banks first came to us, they were challenged in how to manage risk to make sure they are not just growing their consumer-lending businesses, but growing profitably,” she said.
“In the Philippines, it’s banks of all sizes that are doing a great job of thinking strategically and thinking ahead. They realize the value technology can play—in fact, seven of the top banks are currently installing core banking systems that we know of. Many more banks want to. Out of the top 20 banks, all of them are in the market for good originations systems, scorecards and other analytics solutions that will help them grow profitably,” she added.
She said their new partner, iSphere Global, recently organized a banking forum on analytics to promote FICO to the Philippine market.
