said TowerGroup's Research Director of the Consumer Lending Practice, David Hamermesh, who is a residential mortgage lending expert.
San Bruno, CA (PRWEB) March 24, 2009
Nomis Solutions, the leading provider of best-in-class Pricing and Profitability Management for financial services companies, today announced the availability of the Nomis Mortgage Portfolio OptimizerTM (NMPO) Suite for banks and building societies in the United Kingdom. These lenders are under immense pressure from factors such as significant declines in gross lending volumes, spread compression as a result of low deposits rates, escalating impairment costs, and exposure to the financial services compensation scheme. Optimising net profit contribution and capital utilisation are the quickest ways to improve the performance of mortgage portfolios in 2009.
NMPO Suite enables UK Mortgage Lenders to address these issues and take a more proactive and profitable approach to driving growth in their mortgage portfolios. It optimises net profit contribution and capital utilisation in two steps. First, classifying borrowers into detailed profiles based on pre-payment and delinquency behaviour and based on response to product features, pricing levels, channel convenience, and brand benefits. Second, developing product, pricing and contact strategies to improve retained net profit by optimising three key questions: Who to contact? When to contact them? What product to offer them?
Most UK Banks and Building Societies are relying on an unscientific approach to manage their mortgage portfolio by responding reactively to all borrowers at the point of maturity. As a result, they are unintentionally allowing creditworthy borrowers with the lowest impairment risk to pre-pay and disproportionately retaining high credit risk borrowers who have no alternative than to remain on the standard variable rate (SVR). Net profit contribution and capital reserves are further threatened by the cost of loss provision in the back book. The cost of loss provision is reported to have risen by up to 100 basis points in the last 12 months.
UK mortgage lenders will face new challenges and renewed pressure on margins. They have seen a dramatic fall-off in remortgaging, and government-owned banks will start to publish low pay rates," said TowerGroup's Research Director of the Consumer Lending Practice, David Hamermesh, who is a residential mortgage lending expert. "Banks must invest in new tools to analyse and segment borrower behaviour to drive growth in net interest and other income from mortgages."
"The Nomis Mortgage Portfolio Optimizer Suite enables Mortgage Lenders to drive net profit and return on capital by differentiating customers who respond well to proactive repricing from those who don't," said Nomis Solutions' Director of Mortgage Solutions, Nick Young. "Through deep customer insight, leading edge predictive analytics, and best-in-class practices and processes, these software solutions help Mortgage Lenders understand the profiles and behaviour of segments within the portfolio, make decisions about which customers to proactively contact and when, and configure the optimal offer or discretionary discount structure to maximise the profitability of each customer."
With Nomis Solutions, Mortgage Lenders gain financial, operational and strategic benefits quickly. They can increase net income contribution, market share, and net interest margin. A closed-loop contact strategy ensures their operational processes are aligned to retain borrowers and optimise net profit contribution. A more efficient and effective renewal and retention process reduces operational complexity and focuses expert resources on high value segments. In terms of strategic benefits, Mortgage Lenders can drive profitable gains in market share through asset growth and retention. They can reverse margin compression by better controlling price discretion and increase customer retention and satisfaction by better understanding customer behaviour.
Nomis Solutions' Mortgage team has acquired deep knowledge of the UK Mortgage market based on five years of experience implementing proven Mortgage solutions and access to up-to-date consumer research. The team also has experience implementing the company's award-winning Nomis Price OptimizerTM software in other lines of business in the United Kingdom, Canada and the United States.
About Nomis Solutions
Nomis Solutions enables best-in-class Pricing and Profitability Management for financial services companies. Through a combination of advanced analytics, innovative technology, and tailored business processes, the Pricing and Profitability ManagementTM Suite delivers quick time-to-benefit, and improves financial and operational performance throughout the customer acquisition and portfolio management processes.
The Pricing and Profitability ManagementTM Suite of business solutions includes the award-winning Nomis Price OptimizerTM, the Nomis Offer OptimizerTM, the Nomis Mortgage Portfolio OptimizerTM Suite, and the Nomis NavigatorTM. These solutions are designed to meet the specific requirements of auto finance, home equity lending, personal lending, mortgage, and deposits executives. Select customers include Abbey (part of the Santander Group), AmeriCredit, Bank of Montreal, Chase/WaMu, Chrysler Financial, HBOS plc (part of the Lloyds Banking Group), Nationwide Building Society, Royal Bank of Canada, Skipton Building Society and Yorkshire Building Society. Headquartered in San Bruno, CA, Nomis Solutions also has offices in London, United Kingdom. Visit http://www.nomissolutions.com or contact us at 1-650-588-9800 or +44 0207-189-8327.