China Construction Bank (CCB), one of the leading banks in China, has significantly lifted its approval rate and increased the automation rate in its credit card business using the FICO® Score X Data and FICO® Scorecard solutions to facilitate the origination process and grow its business with the youth market
The bank has been on a digital transformation journey to broaden its online and mobile banking offering to reach millennial consumers, 18 to 35 years of age. This group represents a significant opportunity for CCB with a growing demand for credit, however many of these consumers also have limited on-bureau credit history which limits the bank’s ability to understand their credit risk. CCB was looking for a way to gather insights on these potential customers using new technologies.
“This project has enabled us to combine external big data, bureau scores with our internal data to enhance our predictive power when calculating the credit risk for the youth population,” said Mr. Erpeng Zhang, director of credit card center, China Construction Bank. “Partnering with the FICO team, we have significantly improved our origination efficiency while maintaining our risk profiles. Our new risk-based underwriting strategy is helping to us to maximize our overall profitability while expanding lending to millennials.”
Using the FICO big data scorecard, CCB has achieved a number of benefits. It has seen a significant lift in its credit card approval rates and the automation of these approvals. The bank has also increased its lending predictive power using eight segment-level scorecards. Plus, CCB has integrated FICO’s industry-leading big data score with its reservoir of application, bureau and internal data.
“China Construction Bank has managed to both expand its business while also extending credit to many young people for the first time,” said Ms. Sandy Wang, managing director, FICO China. “The bank has raised the bar of automated origination and risk management in the industry by applying alternative data to responsibly improve the credit score process and reach more consumers. FICO estimates there are up to 500 million people in China with a thin file or who are unbanked. CCB through this project is helping to create a path to access credit for many young people who will be good customers with a good credit risk profile.”