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Live from InterACT - What do bankers worry about in the current crisis?

(Posted by guest blogger, James Taylor)

Fair Isaac recently worked with TowerGroup, a well known analyst firm in financial services, to survey 108 executives at the top 50 U.S. banks and credit card issuers. The press release is here and there were a number of interesting results but two caught my eye:

  • The top investment area among respondents in the coming 12 months is in the area of analytics, with fully 75 percent planning such improvements
    This is interesting as this is the opinion of people who already make huge investments in analytics. Clearly, even if you are already a very sophisticated analytic organization, analytics deserves (or perhaps even requires) an ongoing focus.
  • While roughly half of respondents currently have an enterprise-wide fraud solution in place in their organizations, those who do not are most daunted by the perceived complexity of implementing one
    I was impressed that half already had an enterprise-wide solution but concerned about the other half. It's pretty clear that crooks will target any gap in your fraud defenses and so an enterprise-wide approach is really important.

Ted Iacobuzio of TowerGroup has a great quote in the press release:

No one doubts the seriousness of the current credit crisis, but it’s noteworthy that the largest financial institutions are more likely than others to characterize its impact as severe or worse. The fact that these larger institutions took on more risk in recent years and are feeling more pressure now that delinquencies are rising and defaults are increasing certainly has something to do with that perspective.

This reminded me of the presentation Joe Breeden gave yesterday in which he laid out the pattern of behavior that drove lenders, particularly large ones focused on how Wall Street sees their results, to  put themselves on the path to the current crisis.

Ted is about to present and I will be blogging that over on the Smart (enough) Systems blog.

JT

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