After more than a year fine-tuning its credit analysis business, Equifax Inc. has introduced several products and services aimed at helping lenders identify profitable and risky customers.
Two products, Equifax Attrition Navigator and Equifax Behavioral Insights, are being offered as part of a new technology platform called Equifax Dimensions that analyzes customer behavior over 18- to 24-month periods, using more than 500 behavioral attributes.
Equifax Dimensions is sold through the year-old Knowledge Engineering subsidiary, formed after Equifax bought Decisioneering Group Inc., a privately held consulting company that specialized in customer loyalty and retention programs.
On Sept. 29, People's Bank of Bridgeport, Conn., signed a three-year contract with Knowledge Engineering, becoming the unit's largest customer to date. The only other announced deal is with Marks & Spencer, a retailer based in the United Kingdom. Equifax says other companies are working with Knowledge Engineering, but it declined to identify them.
People's Bank is buying services meant to build more sophisticated customer profiles so it can identify customers and prospects to whom it might be profitable to sell or cross-sell products.
Equifax says its products will improve marketing results by increasing response rates, reducing attrition, and increasing credit card use and balances.
In addition, Equifax is creating a single marketing system for People's card operations in the United States and United Kingdom, which together hold $4 billion of receivables.
Combining the two systems will reduce operating costs, according to executives at the thrift.
"Before, we had one process in the United States and one in the United Kingdom, so there was no cross-fertilization," said Mark Vitelli, executive vice president of People's card services.
The alliance with Equifax "allows us to have one common platform and to treat our marketing business globally."
The new data base will keep credit and demographic information on more than 200 million U.S. consumers and 44 million U.K. consumers. The acquisition-oriented network will "allow us to understand our potential customers from a more comprehensive perspective," Mr. Vitelli said.
Before signing on with Equifax, People's had had a partnership with Experian Inc., the Orange, Calif., credit bureau that competes in some businesses with Equifax.
The software developed by Equifax's Knowledge Engineering group "is the culmination of several years of research," said Thomas J. Blischok, executive vice president and group executive of the division. Mr. Blischok had been chairman and chief executive officer of Decisioneering Group.
"Consumers want greater product choices and broader flexibility from their financial institutions," Mr. Blischok said. Large data bases like the one Equifax is building for People's Bank will help meet this need, he said.
Equifax Attrition Navigator is meant to help card issuers understand trends in account attrition. Equifax Behavioral Insights analyzes patterns of consumer credit use.
At least a dozen companies market similar products, which look at consumers' historical behavior to predict future behavior, said Jeffrey Evanson, an analyst at U.S. Bancorp Piper Jaffray in Minneapolis. Among them are the other two credit bureaus -- Experian and Chicago-based Trans Union Corp. -- as well as Fair, Isaac & Co. of San Rafael, Calif., and HNC Software of San Diego.
By using credit information in new ways, Mr. Evanson said, these companies are enhancing traditional credit analysis products. Instead of simply evaluating risk, the new generation of products also looks at ways to enhance profitability, he said.
The credit bureaus have an advantage in developing these products because they own the consumer credit reports on which many predictive models are based, experts say. Fair, Isaac, best known for its credit scoring products, works with and competes with the credit bureaus.
For example, in September, Equifax and Fair, Isaac introduced several new products together. Fair, Isaac introduced Next Generation Credit Risk Score, which is designed to predict the likelihood of delinquencies of 90 days or more, and Equifax is the first credit bureau to offer it.
Another product, Revenue Evaluator Score, meant to identify customers and prospects who could be profitable for bank card issuers, is being offered jointly by Equifax and Fair, Isaac. Equifax has also begun offering Fair, Isaac's Bank Card Attrition Score, which predicts whether a card account's balance will decline by 50% or more over 12 months. Some of these products are also available through the other two credit bureaus.
"The Equifax-Fair, Isaac relationship is complex," said Mr. Evanson, the analyst. "Equifax would love to be able to offer the value scoring that Fair, Isaac sells, and they do offer a scoring product."
But the credit scores provided by Fair, Isaac's products -- so closely identified with the company that they are known as FICO scores -- are difficult to supplant, because they have defined the industry for so long, Mr. Evanson said.