MASSILLON, Ohio--(BUSINESS WIRE)--SubscriberWise®, the leading provider of analytics-driven subscriber risk management for the communications industry, announced today that its decision management technology is benefiting underbanked consumers as well as America’s cable and telecom operators who rely on the technology for fair and unbiased security underwriting of their programming and hardware offerings.
“It’s very interesting data and it’s essentially identical for every member anywhere in the country”
“In an environment where the majority of adults are credit consuming Americans, there remain millions of consumers today who are not actively using credit,” explained David Howe, president of SubscriberWise. “These are non-scorable consumers and they represent a significant population of applicants to operators everywhere. Statistically, approximately 20 percent of consumers are non-scorable at the time they apply for service from our members. Although these individuals may be consuming non-traditional forms of credit, I’m referring here to the type of credit accounts (also known as trade accounts) that are reported on consumer credit reports at the national repositories (TransUnion, Equifax, and Experian). These ‘traditional’ forms of credit include credit cards, installment loans, student loans, mortgages, personal finance accounts, and others,” explained Howe. “These accounts are generally reported and updated each month by the creditors with whom the account holder maintains the relationship. And that explains why the vast majority (80 percent) of American’s generate a credit score when they apply for credit.”
“According to Craig Watts, public affairs director for FICO, in order to generate a FICO Score, a person’s credit file at a national credit reporting agency needs to have at least one account six months old or older and have been updated by a creditor at least once in the previous six months (http://www.subscriberwise.com/Fico850.pdf),” Howe stated. “SubscriberWise leverages FICO 8 Scores exclusively as a leading component in its decision management technology,” continued Howe. “Among the 20 percent population of non-scorable consumers, they all have a file at the repository but there’s insufficient activity to generate a score…according to rules of FICO’s scoring algorithm.”
“So what’s the problem,” Howe asks rhetorically? “It’s simple. Not every non-scorable consumer behaves the same as evidenced by data contained in their consumer file. Risk varies among this population. But with automated rules and decision management technology, many systems simply treat every “0” (non-scorable) credit file the same way,” explained Howe. “And this is a big problem for operators looking to balance risk and reward. In other words, a consumer who does not generate a credit score but also has past due trade accounts and 75 outstanding collections, he is very different from a mature cash spender who has no adverse data but is simply not consuming credit today.
“Our technology solves this problem in a way that maintains strict and absolute compliance with federal, state, and local laws regarding score-based and rules-driven consumer credit decision systems that are leveraged specifically for underwriting purposes. SubscriberWise technology instantly evaluates non-scorable files and measures incidents of past due accounts, collections, length of history, and combinations of these factors to assign a decision level. Each decision level is empirically calibrated to performance metrics of actual telecom consumers spanning nearly 10 years of detailed payment data. In simple terms, there are no human or subjective factors with SubscriberWise rules and decision technology. The process saves operators time and money and eliminates completely any manual review of the data.
“It’s very interesting data and it’s essentially identical for every member anywhere in the country,” concluded Howe. “To be more specific, with proprietary decision technology invented by SubscriberWise, we can inform an operator of how their underbanked consumers will segment (as well as all their prospects) – before they’ve ever submitted a single credit submission – with extreme precision. For example, I can state unequivocally to an operator that 2 percent of their applicants are ‘mature cash spenders’ as defined by SubscriberWise segmentation technology. In other words, these are consumers who, despite a non-scorable file, will be treated more favorably because there’s an absence of other adverse information contained in their consumer file at the time of processing. It translates into an incredible benefit for our members while also providing America’s underbanked consumer a profoundly equitable risk assessment.”
For a detailed overview of how SubscriberWise technology works for the benefit of underbanked consumers, the following YouTube video is highly recommended: SubscriberWise Segmentation Technology: http://www.youtube.com/watch?v=bIuv0VWmXdU
SubscriberWise® launched as the first issuing consumer reporting agency exclusively for the cable industry in 2006. The company filed extensive documentation and end-user agreements to access TransUnion’s consumer database. TransUnion approved the request as part of a pilot project in 2007. In 2009, SubscriberWise and TransUnion announced a joint marketing agreement for the benefit of America’s independent cable operators (http://www.subscriberwise.com/TransUnionJointMarketing.pdf). SubscriberWise also became the first American company to integrate and launch the FICO 8 Score for every U.S. member operator. Today SubscriberWise is a risk management preferred-solutions provider for the National Cable Television Cooperative. The NCTC helps nearly 1000 members nationwide. SubscriberWise was founded by David Howe who is a consultant and credit manager for MCTV (www.mctvohio.com), where he has remained happily employed for nearly two decades. SubscriberWise estimates its contributions to the telecom industry in excess of twenty-five million dollars annually.