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

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…

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