Equifax and FICO have entered
into a new partnership in the UK with the aim of challenging the
status quo in the risk management arena. Mike Gordon,
vice-president and managing director of EMEA for FICO, and Shawn
Holtzclaw, Equifax UK managing director, tell Douglas Blakey it is
a game-changing alliance.
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Following a 10-year courtship, FICO
and Equifax have tied the knot in an alliance described by the
vendors as the perfect match.
Equifax brings to the party
market-leading data on UK consumers and for its part, FICO is
unarguably a leader in decision management software; both partners
to the alliance bring to the party analytics power.
Currently, banking clients of
Equifax and FICO can use data from Equifax and scores on the FICO
TRIAD Customer Manager, FICO Blaze Advisor platform, and the FICO
origination management platform as part of the Equifax Decision
Navigator solution.
The thinking behind the alliance is
simple: customers will welcome the chance to do business in one
place and will appreciate greater competition in the market.
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By GlobalDataEquifax and FICO reason that banks
do not like vendor dominance.
Advanced
solutions
The subtext behind the deal is a
combined assault on rival Experian and its number one market share
slot in the UK; Callcredit will also be viewing developments with
interest.
By combining their respective
strengths, Equifax and FICO said they will offer advanced solutions
that enable clients to:
- make sharper lending
decisions based on more precise customer assessments; - comply with more stringent
regulations; - adapt to fast market changes
by testing and evolving customer strategies quickly; - reduce fraud;
and - improve the consumer’s
experience
Mike Gordon, vice-president and
managing director of EMEA for FICO told RBI: “Things
changed with this announcement. Both sides see this as very
significant.
“We have been having conversations
over the past few months and see that there is a great opportunity
for us to bring more to the UK market. The alliance means that we
can make stronger lending decisions and really help [our]
customers.
1+1 = 3
“It is really a case of 1 plus 1
equals 3.”
Shawn Holtzclaw, managing director,
Equifax UK, told RBI: “There will be significant joint
opportunities in the months ahead for us.
“Together, Equifax and FICO know
what the UK market needs: it needs greater choice and will get that
from an alliance that brings together the best in data software,
analytics, customer management profitability, collections, fraud
and originations.”
In a small number of business areas
where the parties overlap and are direct competitors, there will be
no day-to-day change-that competition will continue.
Nor do Gordon and Holtzclaw
envisage job losses resulting following announcement of the
alliance within either firm.
“This is a growth opportunity: I do
not anticipate pulling people back,” Gordon said.
Gordon added the two firms will put
together joint teams from the two firms to identify how best to
plan and service their account management.
New initiatives begin in
June
“What we would look at is a series
of joint teams to identify how best to plan accounts,” he said.
A series of announcements will kick
off in June, regarding initiatives to be rolled out by the Equifax,
FICO alliance; a new website at www.efxfico.com is already up and
running.
Looking ahead, further deals
between the two firms outside the UK are not ruled out. Equifax is
strong in the UK and has invested in Spain; FICO has the greater
international presence of the two firms across EMEA.
“Both firms are encouraged and
excited,” concluded Gordon. “With hindsight, the question may be
why did not we do this earlier?”
Neil Munroe, external affairs
director, Equifax conceded the ongoing wave of increased regulation
around the world was a welcome development, commercially.
He told RBI:
“Regulation has created
opportunities for us; the latest wave really started with
anti-money laundering, Basel, single customer view and the
financial compensation scheme, the mortgage credit directive from
Europe and so on.
“But one major change is that banks are now coming to us to ask
for assistance and tapping into our core competencies.”
Another key priority for Equifax is the wealth management
data sector.
“The liabilities side is pretty well
developed; the asset side is woefully developed” Munroe said.
Equifax has made two acquisitions in the past couple of years
to beef up its wealth and asset data business.
In March, it acquired Workload Financial
Business Consultants, a leading UK provider of strategic
intelligence to wealth and investment financial product
providers.
The UK purchase followed on from Equifax
snapping up US-based IXI Corporation, a firm that tracks the
assets, income and spending activity of consumers in a $124 million
deal in 2009.
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