Fair, Isaac introduced ‘OpporTune’ Tuesday at InterACT ’98’. ‘OpporTune’ is an open architecture account management product that performs advanced profitability assessment at the account level.OpporTune calculates profit forecasts based on the most predictive information available to a financial institution. It can analyze transaction data, master file data and credit bureau data — or any combination of these data sources — in order to calculate a readily understandable profit metric. OpporTune will also feature intuitive profit profiles, which provide specific reasons for the account’s anticipated level of profitability. OpporTune enables banks to improve account and portfolio strategies through a more complete picture of future account profitability, based on multiple data sources.Details
Over the past two years more than four million American households have shifted $26 billion in credit card debt to home equity loans, according to a new survey by Atlanta-based Brittain Associates. Based on a May survey of 6,000 households, about three million households totally paid off their credit card debt using home equity loans with nearly 1.5 million remaining credit card debt-free months later. The explosion in home equity lending has been fueled, in part, by the wide gap between card rates (18%) and home equity loan rates (9%). Consumers are also attracted to the tax deductibility of home equity loans and the highly leveraged home equity loans of up to 135% of market value. Brittain says it’s a double whammy for card issuers: not only do they lose interest accruing balances but they may also face higher losses down the road as some consumers pile up card debt shortly after consolidating into a home equity loan. After high LTV loans there is little rope left except bankruptcy.Details
Fair, Isaac and Company, Inc. announced Tuesday at its InterACT ’98 conference that its Risk Management Technologies (RMT) subsidiary has extended its advanced financial analytics software to the planning and budgeting process of complex financial institutions with RADAR Planning and Budgeting.
RADAR Planning and Budgeting is the latest addition to RMT’s RADAR product line, which also includes RADAR RiskManager, RADAR ProfitBuilder and RADAR Transfer Pricing. Taken together, these products comprise a complete risk management and performance measurement solution.
RADAR Planning and Budgeting allows managers to integrate top-down strategic financial planning with bottom-up expense budgeting in a single process that uses common enterprise-wide data. This will enable managers to compare not only budgets and actuals throughout the year, but the strategic outlook as well. In addition, RADAR Planning and Budgeting includes budget workflow tools to facilitate the enterprise-wide planning and budgeting process.
“Traditionally, bank planning and budgeting has been a cumbersome manual process involving numerous rounds of discussion and negotiation,” explained Alan Tobey, product manager for RADAR Planning and Budgeting at RMT. RADAR Planning and Budgeting replaces this process with an automated process that enables managers to create high-level strategic plans based on RADAR’s financial projections, and then use that information in creating business unit expense budgets that reflect net interest margin, yields, and spreads as well as revenue. Traditional bank budgets, based simply on revenue, do not provide sufficiently complete or accurate information to effectively manage for maximum profitability.
The bank planning and budgeting process historically has required two separate, though related, processes. For strategic planning, managers use analytical and forecasting tools such as RADAR to develop business outlooks for the coming year. In the budgeting process, managers of business units determine an appropriate budget based on simple revenue and expense projections on spreadsheets. However, it is rare that proposed revenues and expenses at the department level, when rolled up, actually agree with the strategic goal numbers descending from above. As a result, a great deal of negotiation must take place.
RADAR Planning and Budgeting, created expressly for the complex planning and budgeting of financial institutions, brings both processes together, allowing managers to use common enterprise-wide data and assumptions, such as revenue information and cost forecasts. RADAR also gives managers insight into such measurements as expected net interest margins to better refine the budgeting process. This allows managers to base budgets on more precise measurements of income and profit rather than gross revenue.
“RADAR Planning and Budgeting allows bank managers to finally get beyond the last-year-plus-10% planning approach. It also enables three-way comparisons of budget, actuals, and outlook,” noted Tobey. In addition, the system provides versioning, which enables organizations to simultaneously create multiple budget cases, such as best and worst cases, as managers explore key alternatives.
Since 1956, Fair, Isaac has helped businesses maximize the value of data for strategic decision making. The company pioneered the use of credit scoring in consumer and commercial lending. Today, Fair, Isaac provides data-driven decision-making solutions including data management, analytics, software and consulting to businesses in financial services, direct marketing, personal lines insurance, retail, and healthcare. Headquartered in San Rafael, Calif., Fair, Isaac employs more than 1300 people in 16 offices worldwide. For the fiscal year ended September 30, 1997, the company reported revenues of $199 million, a 28 percent increase over the prior year. For more information, call Fair, Isaac at 800-999-2955.Details
Complete Management, Inc. announced Tuesday that its 60% owned financial services subsidiary, CMI Capital Corporation has entered into an agreement with MBNA America Bank N.A. of Wilmington, Delaware. Under the terms of this agreement, MBNA America, an industry leader in credit card and financial services, will provide credit card and other financial services under the CMI Capital banner to select clients of CMI Capital.
Steven Rabinovici, Chairman and Chief Executive Officer of CMI, stated, “The agreement with MBNA America to market their financial products under CMI Capital’s logo further enhances our overall efforts to support the growing network of services. CMI provides these services through its preferred provider organization, owned by its Consumer Health Network subsidiary, which includes over 34,000 members. In addition, CMI Capital will utilize this strategic alliance with MBNA America to help reach their target market for accounts receivable financing on a nationwide basis.”
Complete Management, Inc. provides physician practice management services to medical practices and hospitals located in the New York metropolitan area, particularly New York City, Long Island, the Hudson Valley region, and portions of New Jersey and Connecticut. The Company also owns Consumer Health Network, a preferred provider organization operating in New Jersey and, to a more limited extent, New York and Connecticut. Consumer Health Network is the largest PPO in New Jersey. CMI Capital Corporation, purchases and finances medical accounts receivables to third party medical providers on a nationwide basis.Details
In order to meet the ever-growing demands of business travelers Global Network Architects (GNA), the architect, builder and implementer of broadband virtual communities, finalized an agreement yesterday with OANDA for the provision of the world’s most popular currency conversion service to users of GNA’s highly advanced hospitality system.
Under the terms of the agreement, GNA will introduce into its virtual communities OANDA’s () customized currency converter service and its companion customizable cheat sheet service, an interactive currency conversion tool which creates printable, wallet-sized conversion tables for foreign travelers.
OANDA’s 164 Currency Converter, the most complete service of its kind, offers current and historical exchange rates from 1990 to the present in 164 different currencies. Aside from English, it is available in French, German and Italian.
The agreement with OANDA comes on the heels of GNA’s landmark agreement with the online travel service, Biztravel.com (a href=http://www.biztravel.com>http://www.biztravel.com), the Internet company for frequent business travelers. The two companies inked an exclusive agreement, which will extend Biztravel’s reach overseas, via the GNA Hospitality Community and other GNA virtual communities, such as the small office and a proposed road warrior community.
Deployment of OANDA’s services by GNA will begin with GNA Hospitality Community, a personalized in-room communications service soon to be deployed in hotels and resorts worldwide. GNA Hospitality Community will make interactive information and entertainment — as well as powerful computing applications — available via televisions in the comfort of a guest’s hotel room. Aside from GNA Hospitality Community, GNA will also bring OANDA services to GNA’s other communities to be deployed, including those aimed at road warriors, networked learning professionals and students and business and residential communities. GNA’s solution of delivering broadband, streaming video is deployable to many different types of end-users.
“We are extremely pleased to be partnering with OANDA to deliver this much needed service. In today’s globalized economy, timely and ubiquitous access to currency information is absolutely essential — as important as stock market information,” said GNA chief executive officer Raymond Cheng.
“Seamlessly integrating OANDA’s currency conversion service into the GNA Hospitality Community and other virtual communities is one of the most effective and elegant ways to bring the right content to the right audience,” said OANDA chief operating officer Jenny Zhan Sidler. “Combining OANDA’s superior data service with GNA’s virtual communities, this partnership is a first step to unlock the tremendous market potential for personalized currency information delivered with guaranteed quality and reliability,” added Sidler.
Announced in November 1997, the GNA Hospitality Community brings together several strong interests: Microsoft Corp.; Global Network Architects; Compaq/Tandem, and 3Com. GNA Hospitality Community dramatically redefines what hotel guests can expect in their hotel rooms by delivering a personalized office away from the office and a home away from home. After a trial period, GNA Hospitality Community will be swiftly deployed to hospitality properties worldwide. In addition to video-on-demand, games and shopping services, the new service will allow travelers to utilize Microsoft Office products from a central source, as well as to receive personalized, private and secure e-mail, faxes and voice mails from the comfort of their hotel rooms through in-room televisions.
Known as the global architect, builder and implementer of broadband virtual communities, GNA has an impressive track record dating back three years. It is best known for its innovative approach to constructing virtual communities for companies and organizations. In its early years, GNA established a reputation in Southeast Asia for developing hardware and software tools for medium to large-scale communities, for virtually every type of network. Some of GNA’s landmark achievements include pioneering the world’s first high-speed, interactive community networks and hosting the first interactive, online discussion between Southeast Asian leaders.
With offices in the United States, Malaysia, Hong Kong, Australia and the United Kingdom, GNA has a truly global reach, and one which will allow it to further extend the services of its content providers. GNA derives much of its strength from its ability to bring together the best expertise in technologies, design, content and management. End users range from academics and business travelers to consumers and connected professionals.
The Currency Site by OANDA is best known for its easy-to-use Currency Converter for more than 164 currencies and innovative currency information services on the Internet. Established in late 1996, as the Internet subsidiary of the Zurich-based leading financial technology firm, Olsen & Associates, OANDA develops and markets a full spectrum of quality FX services with a strong focus on customizability.
OANDA’s popular products also include the practical wallet-sized currency “cheat sheet”, historical graphs and tables, bid/ask details, and advanced forecasts for the currency markets.
OANDA is committed to making the essential currency information easily accessible to anyone including currency investors and traders, professionals in corporate procurement, business and private individuals who buy and sell globally, or the peripatetic road warrior. Actively providing currency conversion services for the Internet users of CNN, Pathfinder, Swissair, Mastercard, among others, OANDA has won wide acclaim as the best source for foreign exchange rates.
Strongly backing OANDA’s superior services is the advanced predictive technology and the high frequency financial data collection of Olsen & Associates. O&A offers products and services to major financial institutions worldwide including FX forecasts, trading models, volatility services, price validation, risk management, and portfolio analysis.Details
The League of American Theatres and Producers, a 500-member national trade organization for the Broadway industry, and First USA raised the curtain yesterday on the new ‘Live Broadway VISA’ card. Under the new program cardholders will earn points redeemable for a variety of premium Broadway items, including theatre tickets, backstage tours and limited-edition memorabilia. ‘Live Broadway VISA’ cardholders will also receive a complimentary annual membership in the ‘Live Broadway Transmedia Dining program’, and advanced notification of special Broadway events and promotions. After the first purchase or balance transfer, cardholders will also receive a limited-edition framed poster from one of several current Broadway hits, including “Chicago” and “Rent”. First USA is offering a fixed 4.9% teaser rate and its standard go-to rate of 13.99%. The trade group says it reaches 30 million consumers annually.Details
First Chicago NBD bumped Citibank Universal for the highest volume per active account according to the latest numbers compiled by CardData. Citibank’s acquisition of AT&T Universal has impacted its per account averages. Meanwhile MBNA leads the top ten with the largest active balances per account.
ACTIVE ACCOUNT ANALYSIS
(for period ending 4-30-98)
ISSUER AA AAB AAV
1. Citibank Universal 28.5 $2158 $1407
2. MBNA America 17.5 $2731 $1371
3. Banc One FUSA 17.8 $2208 $ 792
4. Discover 22.5 $1684 $ 707
5. Chase Manhattan 13.3 $2429 $1045
6. Household Bank 8.0 $2175 $1363
7. First Chicago NBD 9.5 $1789 $1663
8. Capital One 9.3 $1441 $ 667
9. Fleet 5.7 $2316 $1053
10. Bank of America 7.2 $1417 $ 764
TOT/AVGS 139.3 $2035 $1084
AA- number of active accounts in millions; AAB- average balance per active account; AAV-average YTD volume per active account Source: CardWeb’s forthcoming CardData serviceDetails
The Smart Card Forum (SCF), a multi-industry organization working to accelerate the widespread acceptance of smart card technology, announced Tuesday that seven new corporate and government members have joined the organization. This brings total Forum membership to 192.
The new members are:
ID Technologies, Inc.
Smart Cards Solutions, LLC.
University of Michigan
“We welcome our new members, who have joined us at a very exciting time in the life of both the Forum and our industry,” says SCF President Bill Barr. “As the potential of smart cards multiplies over time, so does the interest of organizations such as these who want to be on the cutting edge of this industry of the future, and that is exactly where the Forum is located. By becoming an important part of the Forum family, these members now have access to a unique blend of valuable benefits available nowhere else.”
“We at Polaroid know it is time to turn on the smart card switch,” says Martha Gilbertson, worldwide marketing director for Polaroid’s Identification Systems business. “As a member of the Smart Card Forum, we will be on the front lines of information regarding this technology. As a result, we effectively will build our business to the point where we can offer complete smart card products, services and capabilities to our client base. We’re jumping in now to stay ahead of the future for our clients.”
The Forum also announced that two of its current members – Certicom Corp. and Food Marketing Institute (FMI) — have upgraded their participation in the organization, and now serve as principal members. By becoming principal members, both are voting members of the organization and have access to a full spectrum of Forum privileges.
— Atmel Corporation designs, develops, manufactures and markets a broad line of technically advanced integrated circuits (ICs).
— Certicom Corp. is the leading provider of cryptographic technologies for computing and communications companies.
— Chevron Corporation is a Fortune 20 company and one of the world’s largest energy companies.
— Food Marketing Institute (FMI) is a non-profit association conducting programs in research, education, industry relations and public affairs on behalf of its 1500 members, including their subsidiaries.
— ID Technologies, Inc. is a quality manufacturer of high-technology auto ID products.
— Mosel Vitelic designs, manufactures and markets dynamic RAMs (DRAMs) and high-speed static RAMs (SRAMs) for the worldwide markets.
— Polaroid Corporation designs, manufactures and markets worldwide a variety of imaging products.
— Smart Card Solutions, LLC. is a leader of software development and system integration for the financial payment industry.
— University of Michigan’s Mcard is the university’s single-card program combining such features as ID, library privileges, building access, meal plans and stored value.
All of these members have joined the Forum since its joint work group meetings in February 1998. The Forum’s work groups focus on various aspects of smart card technology, including: interoperability, legal and public policy issues, technology, telephony, multi-applications and network applications. Sectors examined in the work groups include: retail, education, transportation, health care and travel and entertainment.
The Smart Card Forum ([www.smartcardforum.org]) is a non-profit, multi-industry organization of 192 members working to accelerate the widespread acceptance of multiple application smart card technology by bringing together, in an open forum, leading users and technologists from both the public and private sectors.
AT&T and CheckFree signed agreements yesterday to enable AT&T’s residential customers to view and pay their communications bills on the Internet using CheckFree’s electronic billing services. The first phase of the agreement will go into effect in the third quarter of this year, initially benefiting AT&T customers who view and pay their bills at the AT&T Web site. They will be able to have their AT&T bill automatically debited from a savings or checking account on a monthly basis. Customers who pay their AT&T bills through a CheckFree-supported Web site will obtain bill presentment capabilities later this year. CheckFree will provide the back-office systems and technical components for the service, including Year 2000 compliance and back-up services for disaster recovery.Details
With the widespread acceptance of credit cards, debit cards, and electronic money, cash is going the way of the dinosaur, says a new market research report from INSIGHT RESEARCH. And smart card systems may prove to be the best method for secure, convenient low-value transactions between businesses and their customers.
According to INSIGHT’S report, Beyond Payphones: Vending, Low-Value Transactions and the Information Age 1998-2003, telecom service providers have the opportunity to rejuvenate the long stagnant payphone calling market with smart card technology. With its own data processing capabilities, a smart card can store both customer profiles and electronic money. This e-cash is added and subtracted directly from the card — making transactions more secure and convenient for the vendor and the customer. Plus, expanding smart card usage beyond payphones could result in an e-cash system for all low-value transactions, including vending machines, transit fares, or even Internet payments.
“Look at where payphones are located — in airports, at gas stations, in the shopping malls — all places where the consumer has the opportunity to or needs to make other low-value transactions,” says Robert Rosenberg, president of INSIGHT. “We see payphones as a way of jump starting the widespread use of multifunctional smart cards in the US,” Rosenberg concludes.
According to INSIGHT, global spending on smart cards will grow from $1.1 billion in 1998 to nearly $2.8 billion in 2002, with prepaid phone cards representing about 35 percent of the market by the end of the forecast period.
Further insights into the smart card and payphone markets, including five-year revenue forecasts segmented by application, vendor, and region, are published in Beyond Payphones: Vending, Low-Value Transactions and the Information Age 1998-2003, a 120-page market research study now available from INSIGHT RESEARCH for $3,495.
INSIGHT RESEARCH, based in Parsippany, NJ, is a respected source for telecommunications market research reports, competitive analysis, and custom research. INSIGHT can be reached via the web at , and an excerpt of this study is on the page.Details
The card industry continues to have the upper hand on bank credit card fraud this year. According to CardData U.S. fraud as a percentage of gross volume has declined from 12 basis points to 9 basis points during the first four months of this year. Nevertheless, total U.S. fraud will most likely top $1 billion for 1998. Account takeover fraud continues as the fastest growing fraud while counterfeit fraud is showing signs of new life. Based on issuer reported data, account takeover fraud will top $120 million this year in the U.S. while counterfeit fraud will top $140 million.
FRAUD 1998 ESTIMATES
Lost & Stolen $270,000,000
Not Recv Issued $190,000,000
Acct Takeover $120,000,000
Other $ 60,000,000
Source: CardWeb’s forthcoming CardData service
Fair, Isaac announced two new strategic alliances yesterday at its InterACT ’98 conference. Fair, Isaac president Larry Rosenberger named Hewlett-Packard as a customer relationship management partner and Prime Response as a customer marketing management partner. As part of the new alliance, Fair, Isaac and HP’s Financial Services Business Unit will make the ‘TRIAD’ adaptive control system, available on the HP-UX operating environment. This is the first time that ‘TRIAD’, which until now has been available only on mainframes, will run in a UNIX system environment. The alliance, though non-exclusive, will leverage Fair, Isaac’s key strengths in predictive analytics and decision-making software and HP’s core strengths in enterprise computing and services to deliver a suite of business solutions, including customer valuation, customer risk management, and customer marketing management. Marketing automation leader Prime Response, with 100 employees worldwide, will partner with FI through its data services subsidiary DynaMark. The core product of Prime Response’s marketing automation suite is its campaign management software, ‘Prime Vantage’. Prime Response currently has the largest installed base of any campaign management software in the world.Details