Rapidly growing St. Augustine, Florida-based Prosperity Bank faced the challenge of meeting high customer expectations for excellent customer service, while maintaining consistency of decision making across its 18 banking offices throughout northern Florida. Bank executives Wayne Colee, senior vice president of consumer lending, and Beverly Pile, vice president of consumer underwriting, had experienced the value of score-based lending decisioning at other institutions, and intended to introduce that approach at Prosperity Bank.

Another business goal included automating loan processing functions, which meant the bank needed to identify a solution that could handle all aspects of the origination process for an expanding number of growing portfolios. “We felt it would be more efficient to plan for and implement all the pieces of the puzzle at once, and complete our training on everything together,” explains Colee.

A combined solution for simplified operations

After researching options across the industry, by May 2006 Prosperity Bank identified systems from Fiserv and Fair Isaac—with Fair Isaac being specifically recommended by Fiserv as the best option for Prosperity—that would work together seamlessly as a combined solution. All consumer loan origination processing functions would be automated by Fiserv’s easyLENDER® Consumer/Commercial iDM application processing system, while loan decisions relied on the analytic and Decision Management expertise provided by Fair Isaac’s LiquidCredit® Decision Engine with Application Risk Models for direct and home equity loans. Implementation of both systems proceeded quickly, and the combined systems were in operation by July 1, 2006.

Today, loan officers simply enter applicant information into easyLENDER online, and the required data is automatically passed to the LiquidCredit system, which accesses necessary third-party consumer bureau information and the appropriate analytic model to calculate a risk score. Fair Isaac Application Risk Models enable lenders to reduce risk exposure and boost volume. The application considers the score along with other decision criteria that Prosperity has selected to support its credit strategy and policies, and recommends an action—either approve, decline or refer for further review.

After a few weeks of observation, Prosperity made a slight adjustment to its cutoff score, and continued to track results as the bank gained confidence in using scores as key decision criteria. “Relying on scoring has enabled us to safely accept more applicants, including applicants that would have otherwise been declined,” describes Colee. “And as we got more comfortable with the results, we could reduce the level of human intervention and operate more efficiently.”

Everything they need right at their fingertips

The most notable benefit for Prosperity Bank has been the fast turnaround time, which improves responsiveness to the customer and the bank’s competitive position. Boat, car and home equity loan decisions are now provided in a matter of hours, sometimes minutes.

“Everything we need to make a loan decision is right at our fingertips,” explains Pile. “It has definitely simplified operations and made life easier.” This frees up underwriters to spend more of their time contacting new business prospects and generating sales.

Because loan decisions across all Prosperity branches are based on the same criteria, the bank is in a much stronger position when it comes to demonstrating compliance. Instead of being channeled through one central office, consistent loan decisions can be made quickly at all 18 banking centers. “Scoring has entirely changed our underwriting for the better,” concludes Pile.

“We plan to continue to rely on score-based lending decisions to help us improve consistency, meet compliance requirements and reduce losses going forward,” Colee reports.

Decision Yield

Precision
Relying on Fair Isaac scoring, Prosperity is now safely accepting more loans, including loans that would have been declined in the past.

Consistency
With the Fair Isaac solution, loan decisions across all Prosperity branches are based on the same criteria, placing the bank in a much stronger position when it comes to demonstrating compliance.

Agility
Prosperity was able to quickly adjust its cutoff score to achieve its objective in volume risk exposure.

Speed
Loan turnaround time has significantly decreased—boat, auto and home equity decisions are returned to customers in hours, and sometimes in minutes.

Cost
Underwriters are now relying on scoring more, freeing up their time for other tasks, such as generating new business.