Transform Your Bank’s Customer Acquisition with Real-Time Decisioning

Credit decisioning isn't an art-it's a certainty. That was the key message from Jaron Murphy, one of FICO's banking subject matter experts, during his FICO World 2024 breakout session in San Diego. While the tools and processes organizations use for credit decisions may vary, one thing is clear: a solid framework can transform how you acquire customers in real time. By leveraging advanced analytics and machine learning, businesses can streamline their decision-making processes to build a more efficient and accurate credit evaluation system. These technologies are critical in navigating the expansive datasets companies are now able to collect, allowing for more precise customer insights. This shift towards data-driven decision-making ensures that businesses are not just meeting, but exceeding customer acquisition goals. And yes, 100% instant customer acquisition is not just possible-it's happening today. Here's how.

The Framework for Instant Credit Decisioning

A key challenge in customer acquisition is navigating the overwhelming volume of data. As companies work to harness exabytes of information, it's easy to get lost in the sheer volume. But it's not about collecting all the data-it's about getting the right data at the right time. This is where the concept of "data on demand" comes into play.

The framework that drives instant decisioning begins by bringing in both internal and external data. For existing customers, companies have a wealth of first-party data, but for new potential customers, third-party sources such as utility bills or alternative credit data can provide a more holistic view. With machine learning and AI, businesses can use this data to gain deeper insights and act accordingly, leading to faster, smarter decisions that support customer acquisition.

One client of FICO saw exposure rates increase by 15% without taking on additional risk by utilizing over 120 different data sources. "They revolutionized their understanding of who was applying for credit," said Jaron, explaining how the client leveraged alternative data and built proprietary machine learning models in real time to enhance customer acquisition.

Personalizing Digital Onboarding at Scale

With 90% of applications now originating from digital channels, delivering personalization in a fully digital environment is not only essential but also the most effective way to manage customer acquisition costs. Understanding customers through data insights enables banks and businesses to personalize their digital experiences at scale, which is essential for improving customer acquisition success rates and boosting long-term customer retention.

One of the biggest challenges is balancing personalization with speed. "If an application takes more than five minutes, abandonment rates go up by 60%," said Jaron. However, research shows that when customers understand why friction is introduced-such as to protect them from fraud-67% are willing to continue the process.

Applying the right friction at the right time, and communicating it clearly to customers, is key to maintaining a seamless onboarding experience without compromising security.

Fighting Fraud in Real-Time

Application fraud continues to rise, and it's a growing concern for many organizations working on customer acquisition. "41% of fraud last year was application fraud," Jaron noted, emphasizing that fraudsters are getting more sophisticated, often using synthetic identities or even deceased people's information. One FICO client faced a situation where "over 80% of deceased applicants were getting approved," Jaron shared, which impacts the security of customer acquisition.

The solution? Real-time fraud detection. FICO's fraud detection tools and application fraud scores allow businesses to verify data instantly and prevent fraudulent applications from being approved. "It's about reacting faster-staying a step ahead of fraudsters," Jaron said.

Optimizing Pricing with AI and Data

Customer acquisition doesn't end at onboarding. Optimizing pricing strategies based on data and predictive analytics can significantly enhance customer engagement and boost customer acquisition efforts. Many businesses fall into the trap of offering the lowest price to win customers. "It's not a race to the bottom," Jaron emphasized. "It's a race to the sweet spot."

Using FICO's dynamic pricing optimization, companies can offer the right price instead of the lowest price, tailored to each customer's profile. Jaron explained that one client saw tremendous success by embracing this personalized pricing approach, improving conversion rates and deepening customer trust.

Automating for Real-Time Decisioning

Automation is the key to instant customer acquisition. By automating the credit decisioning process-from data collection to fraud detection and pricing-businesses can streamline operations and enhance decision-making.

Through FICO Platform, companies can enable real-time decisioning with a composable architecture. This allows businesses to make changes on the fly, adapt strategies in real time, and ultimately deliver personalized experiences faster. "It's about empowering your business users to own the technology," said Jaron.

How FICO Can Help with Customer Acquisition and Onboarding

FICO Platform provides the tools to streamline and optimize customer acquisition through automation, real-time decision-making, and personalized onboarding. Here's how FICO can help:

• Watch how Trust Bank scaled rapidly: Trust Bank, Singapore's first digital-only bank, acquired 100,000 customers in just 10 days and exceeded 400,000 within four months, all while managing risk with FICO Platform capabilities, significantly improving their customer acquisition strategy.
• Read about Digital Account Opening: Learn more about consumer preference and tools to encouraging customers to embrace digital account openings
• Discover digital banking onboarding strategies: Find out how digital banking innovations can streamline onboarding, as GXS Bank successfully onboards customers in less than 3 minutes with FICO, enhancing their customer acquisition results.

By combining AI, machine learning, and automation, FICO enables businesses to achieve 100% instant customer acquisition, delivering secure, personalized experiences at scale. Leveraging these advanced technologies, companies can accurately analyze large volumes of data in real-time, facilitating more rapid and precise credit decisioning and enhancing lead generation efforts. This integration allows for the seamless onboarding of new customers by ensuring customized interactions that cater to individual preferences and needs, maximizing customer lifetime value. Furthermore, adopting these intelligent systems not only boosts operational efficiency but also enhances security measures against fraud, significantly reducing the risk associated with customer acquisition. Ultimately, FICO's technology suite empowers businesses to adapt dynamically to market changes, ensuring they stay ahead of the competition while fostering customer trust and loyalty.

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