What Fair Isaac Predicts

Credit scoring became a big business for Fair Isaac because determining the likelihood that a loan would be paid was of vital importance to lenders. “But a twin question, with marketing implications, is, ‘How much can I safely lend?’” says Larry Rosenberger, Fair Isaac’s CEO from 1991 to 1999 and now its vice president of analytic research and development. He runs R&D from San Rafael. “If Bob is a great risk, good for another $100,000 in lending exposure, then I want to market all kinds of things to Bob. If Larry is on the brink of being overextended, then I don’t want to market to him.”

The lending industry “doesn’t have a good solution to that second question,” Rosenberger adds. “Our research suggests we have a better answer.” A new product that provides it, and a related application that’s still under development, could dramatically change the way the financial industry markets its products and services, he suggests.

Due to the silo problem that Greene described, the typical marketing approach used by banks today is for various units to “carpet bomb” customers with so many offers “that they finally quit opening their mail,” Rosenberger says. His mathematicians are working on a solution to help pinpoint the customers who should receive specific offers from specific silos within the bank—and not from others.

The more Fair Isaac can put together products that address those marketing dilemmas, and ensure that they communicate well with the software that handles credit and fraud issues, the more it has a sales story to tell about decision management across the entire enterprise—EDM. But can it tell the story effectively?

Fair Isaac describes itself in its 2006 annual report as being in transition from being a “product-oriented” company to a “customer-oriented” one. And Greene agrees that sales efforts have centered too much on the benefits of individual products and not on cross-selling and value across a group of products.

His own background sets the stage for how he wants the sales process to work. In 1982, at the age of 28, with master’s and doctorate degrees in economics from the University of Michigan, Greene became the youngest officer in the history of the U.S. Federal Reserve Board in Washington, D.C. He ran the board’s forecasting group: “What will inflation be next month? That kind of thing. So I know something about predictive science.”