European Bankers Expect "Credit Gap" to Shrink for Consumers and Small
Businesses, According to FICO-Efma Survey
LONDON, April 2, 2013
LONDON, April 2, 2013 /PRNewswire/ --FICO (NYSE:FICO), a leading predictive
analytics and decision management software company,and Efma today announced
the results of the seventh European Credit Risk Survey, which measures retail
bankers' outlook for the availability of credit along with their investment
priorities for the year ahead. In the February survey, completed by 130 credit
risk professionals from 41 countries, the forecast for a "credit gap" between
credit supply and demand fell sharply from the last survey, conducted this
For consumers, the projected gap was just 4 percentage points, with 30 percent
of respondents projecting some increase in the amount of credit requested and
26 percent projecting an increase in supply. By comparison, in the autumn 2012
survey the spread between projected demand and supply was a full 20 percentage
For small businesses, the gap was even smaller. In the new survey, 31 percent
of respondents reported that they expect the aggregate amount of credit
requested by small businesses to increase, and 29 percent expect the amount
granted by lenders to also increase.
"Most of the new business growth in our corporate sector is coming from the
SME segment," said Dr. Cüneyt Sezgin, board and audit committee member at
Turkey's Garanti Bank in the FICO/Efma report. "Loans represent the primary
relationship between banks and SMEs, as other financing alternatives for
smaller companies are not well-developed in this market. Cash loans to SMEs
represented 37 percent of total Turkish lira cash loans in 2012, and this
ratio has been continuously increasing."
"Despite the economic challenges in many countries, lenders are telling us
they're prepared to meet a modest increase in credit demand," said Mike
Gordon, senior vice president for FICO sales, services and marketing. "Given
last month's report that European banks have dramatically cut their Basel III
capital shortfall, it appears that they gradually may be able to make more
capital available for borrowers."
European bankers also laid out their priorities for investment in analytics.
More than 40 percent of respondents reported they will invest in improving
their analytics, with the highest priorities being credit risk models for both
new credit applicants (61 percent of respondents) and existing customers (50
percent). In addition, 38 percent of respondents said they will increase their
investment in risk analytics that incorporate Big Data.
"Although consumer lending is a mature process using analytics to support risk
classification, marketing, underwriting and authorizations, predictive models
must constantly be calibrated to accommodate changes in consumers' behavior,"
said Manuel Goncalves, director of the Risk and Decision Models Unit at
Portugal-based Millennium bcp in the report. "These changes are driven not
only by the adverse economic context but also by greater mobility and social
networking. At the same time, there are new and richer sources of data that
can be used to improve risk management and deliver a better customer
The delinquency forecast was nearly unchanged from the last survey, with at
least 40 percent of respondents forecasting an increase in delinquencies
during the next six months on mortgages, credit cards and small business
loans. "We don't expect a reversal of this trend until the economies of Europe
show greater recovery," said Patrick Desmarès, secretary general of Efma.
"That said, Europe is a heterogeneous region, with some countries preparing
for a triple-dip recession while others, such as Turkey, look quite robust.
The uncertainty across much of the region is particularly challenging for
A detailed report, including specific results for the UK/Ireland,
Germany/Austria/Switzerland and Spain/Portugal, is available online.
Participants included credit-granting institutions ranging from local banks to
FICO (NYSE:FICO), formerly known as Fair Isaac, delivers superior predictive
analytics solutions that drive smarter decisions. The company's groundbreaking
use of mathematics to predict consumer behavior has transformed entire
industries and revolutionized the way risk is managed and products are
marketed. FICO's innovative solutions include the industry-leading solutions
for measuring credit risk, managing credit accounts, identifying and
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regulatory and competitive demands. Learn more at www.fico.com. FICO: Make
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For FICO news and media resources, visit www.fico.com/news.
As a global not-for-profit organisation, Efma brings together more than 3,300
retail financial services companies from over 130 countries. With a membership
base consisting of almost a third of all large retail banks worldwide, Efma
has proven to be a valuable resource for the global industry, offering members
exclusive access to a multitude of resources, databases, studies, articles,
news feeds and publications. Efma also provides numerous networking
opportunities through working groups, online communities and international
For more information: www.efma.com
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subject to risks and uncertainties that may cause actual results to differ
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personnel, competition, regulatory changes applicable to the use of consumer
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including its Annual Report on Form 10-K for the year ended September 30, 2012
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Contact: Media - FICO: Irina Babicheva for FICO, Catalysis, +44 (0)20 7759
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