Sixty-one percent of credit risk
professionals from 27 countries say cross-selling products to existing
customers will be a priority in 2013, and 54% say they will analyze Big Data to
better understand customers' needs and risk, according to the sixth European
Credit Risk Survey by FICO and Efma, the European Financial Management
Association.
"In this risk-averse period,
banks are looking for credit growth primarily from existing customers, on whom
they have more data," says Frans Labuschagne, general manager for FICO in
Europe, the Middle East, and Africa. "But customers are risk-averse too,
so banks need to really dig into customer needs to identify offers that might
work. That's where Big Data comes in-it's a new resource that, if used wisely,
can guide much more customer-centric offers and services."
In the survey, 71% of respondents
say demonstrating a higher return on capital is a priority for next year,
making this the top priority for 2013. The other highest priorities identified are
using mobile channels (49%) and increasing capital to meet Basel requirements
(just 40%, but 21% put it as a top priority).
On the risk front, at least 40% of
respondents see delinquencies rising in the next six months on mortgages, auto
loans, credit cards, small business loans, and overdrafts. "This
represents an improvement on the prior survey, released in July, when these
numbers were above 50%," says Labuschagne. "For example, 44% of
respondents forecast an increase in mortgage delinquencies, compared to 55% in
the last survey."
The biggest change in the credit
demand and supply picture occurred in the so-called "credit gap"
between the percentages of respondents forecasting a rise in demand for credit
vs. a rise in supply. The credit gap forecast for small businesses fell sharply
in this survey, to the lowest point this year, just 9 points. The respondents
forecasting an increase in volume of credit requested by small businesses fell
from 37 to 35%, while those forecasting an increase in credit granted rose from
16 to 26%. However, the credit gap forecast for consumer lending rose to a full
20 points. Now, 35% of respondents predict a rise in the amount of credit
requested by consumer, compared with just 15% who predict the amount granted
will rise.
"Governments continue to
pressure lenders to expand credit to businesses, and recent programs like the U.K.
small business lending scheme announced by the Bank of England should
help," adds Patrick Desmarès, secretary general of Efma. "However,
FICO and Efma believe lenders can and should do more to make capital available
to small and medium-sized businesses, which can fuel economic growth and which
continue to struggle to get credit."
http://www.fico.com/en/Company/News/Pages/11-20-2012-Europe-Bankers-Rank-Analyzing-Big-Data-on-Customers-Among-Top-2013-Priorities-FICO-EfmaSurvey.aspx
[This article was posted on December 4, 2012, on the website of ABA
Banking Journal, www.ababj.com.]
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