Fico and Equifax have announced that they have launched a new risk and affordability decision Suite, which uses advanced predictive analytics to assess a consumer’s repayment risk as well as their ability to afford new credit.

The partnership was announced at the Money20/20 Europe conference in Amsterdam.

The Risk and Affordability Decision Suite is designed for lenders who need to decide which customers can handle additional or existing credit obligations. Unlike heuristic solutions based on income and its presumed link to affordability, this RegTech solution is based on thorough research into risk and affordability factors and their relationship to consumers’ payment patterns. While initially available for cards, the solution is designed to address credit and affordability risk across all credit portfolios.

Steve Hadaway, general manager for FICO in Europe, the Middle East and Africa “For lenders in the UK, basing credit decisions on credit risk alone is no longer enough. Lenders need to consider affordability along with creditworthiness while ensuring they make fair, equitable decisions based on the most accurate data available. Through our partnership with Equifax, we’re giving lenders a systematic and sound way to lend responsibly.”

Neil Cunningham, Partnerships Director at Equifax UK said “The Consumer Credit sourcebook issued by the FCA includes detailed obligations for lenders to avoid over-burdening consumers with debt, and the FCA recently issued new rules with the same goal. We have designed the Risk and Affordability Decision Suite to be used by lenders to help meet the evolving regulatory landscape. Lenders may have struggled in the past to embed affordability considerations into their decision systems — but now we’ve made that easy.”

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