© 2019 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient

only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. 1

© 2019 Fair Isaac Corporation. Confidential.

This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.

© 2019 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient

only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. 2

© 2019 Fair Isaac Corporation. Confidential.

This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.

UltraFICO™ Score & Consumer Contributed Data Experience

Dave Shellenberger

Vice President, Product Management FICO

Thorsten Jaeckel

Product Lead for Consumer Lending Square Capital

Kalpesh Kapadia

CEO & Co-FounderDeserve, Inc.

Yingfeng Xu

DirectorPenFed Credit Union .

© 2019 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient

only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. 3

UltraFICO™ Score Pilot Participants

Kalpesh Kapadia

CEO & Co-Founder,

Deserve, Inc.

Thorsten Jaeckel

Product Lead for Consumer Lending, Square Capital

Dave Shellenberger

VP Product Management,FICO

Yingfeng Xu

Director, Credit Card

Credit Policy Lending

Services, PenFed

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only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. 4

Development, Model Design & Performance

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only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. 5

Leveraging Financial Transaction Data

• The UltraFICO™ Score incorporates transactional data from consumer’s checking,

savings and money market accounts

• Extends the scorable population and refines prediction to broaden financial inclusion

UltraFICO™ Score

• Scaled to align to the standard FICO® Score

• Same 300-850 score range

• Score factor reason codes/Exclusion codes

• DDA index

• All supporting documentation for Risk Based Pricing and consumer dispute notification

Experian Credit Bureau

Data

Finicity DDA

Aggregation

ExperianDistribution &

Support

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Providing a Demand Deposit Account Consumer Report

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Is DDA Data a Leading Indicator of FICO Score Migration?

Benchmark: FICO® Score Migration on Population with FICO® Score 9 = 620-679

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When DDA Data Indicates Stronger Risk Profile

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When DDA Data Indicates Weaker Risk Profile

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Enhanced Score Performance

Meaningful increase in predictive power

Comparing KS Values UltraFICO™ Score FICO® Score 9 % Uplift

THIN/YOUNG PRIME POPULATION

Bankcard Originations 43.78 38.52 13.7%

Auto Originations 41.25 36.77 12.2%

NON-PRIME POPULATION

Bankcard Originations 44.55 42.69 4.3%

Auto Originations 48.35 46.43 4.1%

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Applicant Population: Total (with self-selection filters)

Score Difference Distribution: FICO® Score 9 vs. UltraFICO™ Score

• Consumers with no negative balances and $400 average balance in past 3 months • 70% of population experiences a score increase

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only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. 12

Applicant Population: Thin/Young Prime (with self-selection filters)

Score Difference Distribution: FICO® Score 9 vs. UltraFICO™ Score

• Consumers with no 78% of population experiences a score increase

• More than 40% see increase over 20 points

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only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. 13

Applicant Population: Non-Prime Credit Files (with self-selection criteria)

Score Difference Distribution: FICO® Score 9 vs. UltraFICO™ Score

• 77% of population experiences a score increase

• More than one in ten see an increase of 20 points or more

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Sample Process FlowConsumer

applies for

credit

Minimum

criteria not

met

Consumer

presented with

UltraFICO™

option

Consumer

shares

accounts for

consideration

UltraFICO™

Score

calculated

Credit

decision

refactored

Minimum

criteria met

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Square

Thorsten Jaeckel

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only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. 17

Payments are at the center of all we doAccept every payment type with Square and never miss a sale.

Transparent pricing and fast deposits included.

Start Run Grow

POINT OF SALE ANALYTICS CAPITAL

HARDWARE EMPLOYEE MANAGEMENT CUSTOMER ENGAGEMENT

INVOICES APPS

Free point of sale app that runs on iOS and Android devices

A real-time, centralized view of business data to help to manage operations

Fast, transparent loans offered to prequalified sellers based on payment history and repaid automatically through card sales

Start accepting card payments in minutes with Square’s hardware, including Square Stand and the contactless and chip reader

Manage employee timecards, oversee multiple locations, and view detailed sales reports

Engage customers and conduct closed loop email marketing

Quickly and easily create custom digital invoices and quickly collect payment

Marketplace to select third-party software products (such as Intuit) to integrate with Square

Square Installments allows our sellers to offer POS financing to their customers

18

For Consumers

● Loans from $250 - $10,000 for 3 - 12 months

● Rates from 0% - 30% APR

● No hidden fees

For Sellers

● Quick & easy onboarding in minutes

● Full integration into Square POS

● Accessible to sellers of all sizes - no required minimums

We use Machine Learning on top of a wide range of data sources to make underwriting decisions

19

CRA, IDV & Fraud Data

Square Proprietary Data

Consumer Contributed Data

Machine Learning

Square Installments Application

This allows us to expand access to credit for our borrower base

20

Swap-ins from our proprietary ML model

Swap-outs

Approved by model & score

Consumer Contributed data helps us capture customers we can’t otherwise lend to

21

PenFed OverviewOctober 2019

About PenFed Credit Union

WHO WE AREWe are America’s member-owned, growth-oriented financial leader providing

competitive pricing, digital convenience and exemplary service to those who serve.

OUR HISTORYEstablished in 1935 as the War Department Federal Credit Union, We are one of

the country’s strongest and most stable financial institutions.

OUR SIZE$24.5 billion in assets and 1.8 million members

OUR MISSIONTo empower the members of our communities in achieving their financial well-being.

OUR VISIONTo be recognized as one of America’s

Premier financial institutions, delivering convenience and compelling value.

24

PENFED CORE PRODUCTS

Auto Loans Credit Cards Home Loans Deposits

+ Unsecured Loans Student Refi Wealth Management

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Tell us how we did!

Before you leave, please take

a couple of minutes to take our

session survey found in the

FICO World app in the session

details.

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Learn More

Related Sessions• Keynote: Behind the Number that Transformed Credit – Financial Inclusion

Innovation

• Sally Taylor - Thursday at 1:30

Solution Center • Scoring Strategies

Experts Here

• Ethan Dornhelm

• Radha Chandra

• Dave Shellenberger

• Julie Wooding

Demo Theater• Financial Inclusion & Empowerment through FICO Score Innovations

• Wednesday, Nov 6th at 10:30 am

• Tom Quinn

FICO Blog• https://www.fico.com/blogs/lendit-keynote-analytic-innovations-using-

consumer-permissioned-data

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Thank You!

Dave Shellenberger

VP Product Management, FICO