Fair Isaac (FICO) Partners With Belvo to Expand Credit Access
Fair Isaac FICO recently announced a strategic partnership with Belvo, the leading open finance platform, to expand credit access in Latin America.
The two firms are creating a machine learning model that will generate a customer score based on open finance transactions from various financial accounts, with the customer's consent and Belvo's secure infrastructure. The score will be available in Brazil later this year.
The Belvo Open Finance Score, powered by FICO’s AI Innovation and Development team, will provide a credit risk score that will complement existing credit bureau scores and internal models. It will help financial institutions improve their risk management and offer personalized financial experiences to customers.
Open finance data can be a key part of a country's financial and economic system. This co-developed solution aims to use the open finance data to create a score that will enable financial institutions to make better risk decisions and identify more creditworthy customers.
Fair Isaac Corporation Price and Consensus
Fair Isaac Corporation price-consensus-chart | Fair Isaac Corporation Quote
Strong Product Portfolio to Boost FICO’s Top Line
FICO has been benefiting from strong growth in its scores business, primarily driven by higher origination revenues. Its scores revenues increased 8% year over year to $198 million in the fiscal second quarter.
High demand for its scores and software solutions is well reflected in the strong net-retention rate of current customers. FICO continues to focus on helping clients maximize their customer experience by improving and expanding client’s solutions.
In second-quarter fiscal 2023, its software dollar-based net retention rate was 114%, with platform software at 146% and non-platform software at 105%.
It has a strong customer base with enterprises like Mastercard MA, Telus TU and Truist Financial TFC. These companies are adopting FICO’s solutions to improve business processes.
Mastercard uses FICO Customer Communication Services and FICO Falcon Platform to improve its fraud protection platform and prevent fraud losses for institutional lenders.
Telus deployed FICO’s application fraud solution to improve operational efficiency, manage high volumes and combat the risk of subscription fraud.
Truist Financial adopted FICO Origination Manager and FICO Customer Communication Services solutions to transform its origination processes and improve business lending process for the bank and its customers.
FICO Leveraging on AI to Boost Prospects
Shares of FICO have gained 29.5% year to date compared with the Zacks Computers – IT Services industry’s increase of 9.7% over the same time frame.
Per an article by Gartner, the worldwide spending in IT services is expected to grow by 9.1% to $1.36 trillion in 2023 despite macroeconomic headwinds. The IT services segment will continue its growth through 2024, largely driven by the infrastructure-as-a-service market, which is expected to witness around 30% growth in 2023.
FICO, which belongs to the IT services industry, has outperformed the same owing to its strong product portfolio and ability to empower businesses to rapidly build cost-effective AI- and ML-powered applications.
It continues scaling its latest analytic and AI technology to optimize consumer interactions and revolutionize businesses through digital transformation.
This Zacks Rank #3 (Hold) company raised its guidance for fiscal 2023. It expects total revenues of $1.48 billion, suggesting a 5.7% growth from fiscal 2022 levels. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for third-quarter fiscal revenues is pegged at $380.68 million, indicating a 9.09% growth from the year-ago quarter’s reported figure.
The consensus mark for third-quarter fiscal 2023 earnings remained unchanged at $5.32 per share in the past 30 days, indicating a year-over-year rise of 19.02%.
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