AI SOLUTIONS
HSBC ACHIEVES A 15 % UPLIFT IN MONTHLY CARD SPEND USING FICO ’ S AI-POWERED OPTIMISATION
changes in economic and regulatory conditions . We were also able to better meet customer needs by targeting offers to customers that wanted and would use a credit line increase .”
HSBC worked closely with FICO to design the decision influence process that captured their credit line increase business . Eight action-effect models were created to forecast the impact of the existing credit line increase strategy . These models were configured within the FICO Platform , together with HSBC ’ s profit calculations , and a suite of around 40 scenarios were developed to find the best solution .
When COVID-19 hit in 2020 , HSBC rapidly redeveloped its strategies to deal with the new economic climate . Despite reduced demand for credit during lockdown , the optimised strategy proved to be more effective than its previous strategy at generating card use .
At FICO World , a leading analytic and AI event , FICO announced that HSBC , one of the world ’ s largest banking and financial services organisations , has used AI-powered mathematical optimisation technology to grow its credit card portfolio . The project saw a 15 % uplift in monthly spending by customers on their cards , as well as improvements in active card use and share of wallet , without increasing bad debt . HSBC has won a 2024 FICO Decisions Award for AI , Machine Learning and Optimisation .
“ With FICO optimisation , we can adjust credit limits to each customer ’ s risk , reward and engagement levels , and manage them with scientific precision , at speed , as our strategy and the economic climate change ,” said Mike Roberts , Head of Unsecured Retail Risk , HSBC UK .
The retail banking sector in the UK is particularly competitive , and customers have fractured wallets , with three financial relationships on average . As part of its digital journey , HSBC has been focused on creating easy-to-use , tailored customer experiences , whilst delivering long-term revenue growth . The HSBC credit card portfolio was one of the areas targeted for sustainable and responsible growth by providing tailored credit line increase offers to customers .
“ Setting new credit limits through testing programs is inefficient , and could damage customer relationships ,” added Roberts . “ By using FICO ’ s mathematical optimisation , we were able to simulate responses to customer engagement , levels of spend , activations , loss rates , profitability and customer outcomes , whilst factoring in
In July 2023 , the UK passed Consumer Duty regulations , aimed at ensuring banks delivered products and services that are tailored to individual needs , deliver fair value , and do not put consumers at risk of unaffordable debt . By using FICO Decision Optimiser ’ s precise mathematical techniques , HSBC is well equipped to determine the best outcomes and assist its customers to deal with this regulatory change .
“ The ability to test vast decision strategy possibilities , inter-relationships and subsequent permutations in volumes and scenarios is way beyond the capacity of the human brain to calculate ,” said Roberts . “ At the same time , we are executing explainable decision strategies that provide the visibility and certainty to know that we are doing the right thing for customers .” �
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