Equifax, FICO join forces to give banks one-stop analytics product

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Equifax and FICO have partnered to create a product for banks that combines consumer data with analytical software.

The new cloud-based software product, called Data Decisions Cloud, is intended to help banks and other financial institutions make quicker decisions on credit applications by integrating consumers’ credit histories with advanced software programs, Equifax CEO Mark Begor said in an interview.

Banks must now perform the job of integrating credit-history data into their existing software platform on their own, Begor said. But the new arrangement between Equifax and FICO will combine the two elements into one product.

“FICO has a very advanced software business,” Begor said. “Equifax, we have the data but we don’t have the depth of software they have.”

Begor said most banks acquire consumer data from two of the three major credit bureaus (Equifax, Experian and TransUnion). With the new product, banks will still be able to use consumer data from more than one credit bureau, but only the Equifax data will be already integrated into the FICO software.

The new software product will compete with other cloud-based software from the SAP and IBM, among others.

Financial terms of the agreement were not disclosed. FICO develops analytics and decision management software, in addition to its namesake consumer credit scores.

The announcement comes at a time when Equifax is still facing scrutiny for a massive data breach in 2017 that affected over 145 million consumers, and lawmakers are weighing legislation to reform to the credit reporting industry. One proposal, sponsored by House Financial Services Committee Chairwoman Maxine Waters, D-Calif., would expand access to free credit reports and scores for consumers, and shift the burden in credit report disputes from the consumer to the credit bureaus and furnishers.

But so far, the deal between Equifax and FICO is winning praise.

An executive at KeyCorp in Cleveland said that Equifax and FICO's integration of credit data and software in the same product will benefit the industry.

“There is a deluge of data, and while we have processes to extract meaningful insights to make it actionable, it is a cumbersome and time-consuming process,” Liza Yannon, director of quantitative analysis at KeyBank, said in a news release jointly distributed by Equifax and FICO.

“I look forward to seeing how they help us obtain more ready access to data, enabling better use of it in analytics and business decisions,” Yannon said.

Before he was named CEO of Equifax, Begor was a director of FICO. Begor and FICO’s chief executive, Will Lansing, both also previously worked at General Electric.

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Credit reporting Consumer banking Customer data Credit scores Analytics Equifax FICO