Custom Modeling And Analytical Consulting

Custom Modeling andAnalytical Consulting 2012 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks ofExperian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners.No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian.Experian Public.

AgendaProviding clients with our expertise and strategic thinking to deliver advancedcustom models for enhanced decisions Modeling in the current environment Custom modeling overview Our modeling approach Our experience 2012 Experian Information Solutions, Inc. All rights reserved.Experian Public.2

Modeling in an increasingly regulated environmentOverviewIt is becoming increasingly important to assess your custom risk modelsto ensure optimal predictive performance The OCC 2011-2012 Supervisory Guidanceon Model Risk Management requiresthe annual validation of existing risk modelsand the attributes used to build themTo help you meet current regulatory requirements,Experian’s analytical consulting team offers: Proven modeling methodologies Our consultants and analysts utilize the most sophisticated and advancedstatistical techniques to develop custom models The industry’s most comprehensive set of data assets and credit attributes formodel development Experian’s Premier AttributesSM incorporate the most up-to-date bureau dataavailable, resulting in the most robust and predictive models 2012 Experian Information Solutions, Inc. All rights reserved.Experian Public.3

Modeling in uncertain economic timesModel development Consumer behaviors and financing requirementscontinue to rapidly change A model development population should representthe future through-the-door population Experian may employ weighting of the sampleselection population to adjust for changes inproduct mix, product terms, policy rule changes,seasonality, etc. Recommend using an out-of-time validation sampleto compare to other available scores and ensurea stable scorecard 2012 Experian Information Solutions, Inc. All rights reserved.Experian Public.Out-of-time validation will be used to evaluatethe ability to update the model based onchanges to the overall economy4

Custom ModelingOur expertise As one of the leading modeling companies in the world, Experian DecisionAnalytics has a depth of experience in building custom scoring solutionsthat is unsurpassed in today’s marketplace Experian’s team of expert consultants and statistical analysts have a vastbackground and significant experience in developing and delivering custommodels which extend across all stages of the credit life cycle, including: Marketing analysis Account acquisition Account management Collections Our team leverages Experian’score data assets to design and developcustom models using advancedanalytical techniques that providefor better decisioning and efficiencies 2012 Experian Information Solutions, Inc. All rights reserved.Experian Public.5

Custom ModelingExamplesWhether the goal is finding new customers, offering them the most appropriate terms, ormanaging the relationship throughout the full Customer Life Cycle, Experian has developedmodels which allow our clients to ‘see’ their customers and manage the decisioning processThe following table provides an example of the types of solutions Experian has developed:Account acquisitionAccount managementAccount lossRisk Front-end riskPrescreen riskFraudBankruptcyFirst payment default Behavioral Credit linemanagement Roll rate Delinquency Transactional fraud Early stage collectionsLate stage collectionsRecoveryLoss forecastingTarget ResponseActivationConversionPurchase propensityIncome / wealthLoyalty Profitability Usage Activation /reactivation Balance transfer Cross-sell Revenue AttritionChurn ratePre-paymentRetention 2012 Experian Information Solutions, Inc. All rights reserved.Experian Public.6

Custom models to meet varying decision pointsCustomer Life Cycle AuthorizationRecoveryResponseRevenueActivationLoss forecastingAbility to payRetention Who to target Accept or decline Prioritization What to offer Loan amount Account review /monitoring How much to offer Loan terms What terms Pricing Authorization /shadow limits In-house vs.agency placement Who to price Up-sell / down-sell Increase response Cross-sell 2012 Experian Information Solutions, Inc. All rights reserved.Experian Public. Line management Future solicitations Strategic actions Capital allocation7

Custom ModelingOur approachClient-specific modeling engagementsaddress the unique characteristicsof a client portfolio Developed to solve for a specific clientneed using credit bureau and clientmaster-file data Used for finding new customers,offering the most appropriate terms,or managing existing relationships Custom-built to target a variety ofproducts and industries, includingbankcard, auto, student loan, personalloan, mortgage, telecommunications,utilities 2012 Experian Information Solutions, Inc. All rights reserved.Experian Public.8

Custom ModelingOur approachOur key differentiators in custom modeling One of the leading modeling companies in the world, with a depth of experiencein building custom scoring solutions Our best-in-class approach to attribute development Vast and unique data sources Team approach which focuses on your needs and goals Use of advanced segmentation techniques create a strong and robust model Over 1,500 custom solutions delivered world wide 2012 Experian Information Solutions, Inc. All rights reserved.Experian Public.9

Custom ModelingOur attributes Premier AttributesSM is the credit industry’s mostrobust and comprehensive set of creditattributes that enable organizations to makemore strategic and data driven decisions Experian credit data experts spent nearly threeyears developing Premier AttributesSM Premier AttributesSM were developed usingthe latest data sources, products andindustries available from the three creditbureausOver 1,000 attributes available includinga core set and a series of unique industryclassifications Premier AttributesSM provide consumer data atthe most granular level resulting in enhancedmodeling and analytical opportunities 2012 Experian Information Solutions, Inc. All rights reserved.Experian Public.10

Custom ModelingOur attributesPremier AttributesSM were developed by industry-best data experts to exploitall aspects of consumer credit data, including: Improved attribute accuracy – by utilizing new data elements and industrytrends in the detailed definition, the attributes warrant: Refinement of industry/productdesignations More accurate attribute levelingacross bureaus Significant lift in KS / single attributeperformance New attributes – expanding industryand product designations provideadditional opportunities in segmentationand risk assessment 2012 Experian Information Solutions, Inc. All rights reserved.Experian Public.11

Custom ModelingDevelopment processSteps in the model development processModeling methodModeling philosophy Our model development protocolfollows five phases: Our disciplined approach to modeldevelopment is employed in amanner which is both transparentand adaptable to the unique needsof each of our clients for: Model and sample design Data exploration Segmentation and preliminaryanalysis Final model development Delivery and implementation Sound model governance Intensive audit Thorough documentation The process is adaptable to meetany of your internal requirements 2012 Experian Information Solutions, Inc. All rights reserved.Experian Public.12

Custom ModelingOur expertise Within North America, Experian has been developing models since 1976 and ourclients include most of the Top-10 card issuers in the U.S., the Top-5 mortgagelenders / retail banks in the U.S., and the Top-4 consumer finance companies We develop scoring models using industry-approved statistical techniques These techniques, combined with industry-leading consulting expertise,ensure not only the most predictive models, but also the best fit for you Our consultants and statistical analysts have a vast background and significantexperience in developing and delivering custom models which extend across allstages of the credit life cycle We have proven methodology in linking data and building, tracking andimplementing sophisticated models, resulting in strong operational use Our knowledge transfer of the process and models are a core part of the projectprocess Our team develops models that are resilient in structure under constantlychanging economic conditions 2012 Experian Information Solutions, Inc. All rights reserved.Experian Public.13

Custom ModelingSummaryExperian’s modeling approach is flexible and adaptive to meet our clients’ needs We will build models which augmentexisting modeling infrastructure ordevelop new models to meet specificdecisioning requirements We strictly impose best in classmodeling practices, time seriesanalytics, model diagnostics andconsistency of results We will develop utilizing the richness ofhistorical credit information available andleverage our deep experience in workingwith multiple data sources We will ensure that each model worksfrom both a statistical as well as abusiness standpoint We will analyze segments by product,region, sales channel or otherconfigurations We will mine the data to find opportunityareas that might not be recognized at anaggregate level 2012 Experian Information Solutions, Inc. All rights reserved.Experian Public. We will provide extensivedocumentation, supporting modelgovernance We will work closely with you to providetransparency, from project designthrough implementation and beyond We will build models with strongperformance and longer shelf lives14

2012 Experian Information Solutions, Inc. All rights reserved.Experian Confidential.15

Experian’s analytical consulting team offers: Proven modeling methodologies Our consultants and analysts utilize the most sophisticated and advanced statistical techniques to develop custom models The industry’s most comprehensive set of data assets and credit attributes for model development Experian’s Premier Attributes. SM