Virgin Money tests Jaywing AI technology to enhance risk models

Virgin Money recently worked with data science expert, Jaywing, to deploy Artificial Intelligence (AI) tests through the use of its AI product, Archetype in its credit card business. AI modelling enables Virgin Money to gain a deeper understanding of its customers, so that it can further improve the customer experience and enhance risk modelling.

AI is driving the future of financial services marketing. Some of the most exciting and effective uses of AI in financial services include process automation, predictive modelling and customer service applications.

Through Jaywing, Virgin Money is able to identify which customers are most likely to consider switching credit card provider with more accuracy than ever before. This enables the bank to tailor marketing and promotional offers based on individual customer circumstances, improving the customer experience and reducing the likelihood of customers deciding to switch providers.

Compared with existing models (built on the same data sample), Archetype delivered a double-digit improvement in the ability to predict customers most likely to leave.

Jaywing also ran a proof of concept to demonstrate the potential of Archetype’s AI capabilities to enhance credit risk models. Virgin Money has built a high-quality credit card book with the existing scorecard approach. Running alongside this traditional risk model, the Archetype model combined internal data and bureau information to demonstrate the potential for AI to even more accurately assess credit risk and predict low risk applications. More precise profiling of applications provides the ability to make even more accurate lending decisions, with the potential to reduce bad debt while taking on more customers.

Nick Martin, Head of Analytics, Virgin Money Credit Cards, said: “AI is clearly a technology with immense potential, and we wanted to test the ways in which it can provide practical support to our team by improving the customer experience, increasing the effectiveness of marketing for our credit card customers and enhancing our credit risk processes. We were impressed with the results from Archetype and are now exploring how we can incorporate it further within our business.”

Ben O’Brien, Managing Director, Jaywing, added: “We’re delighted that Virgin Money, like many other brands, recognises the importance of AI in its future development. The biggest strides made possible by AI will be those that allow institutions to better understand their customers’ intentions. Archetype has provided this ability, with the potential to save significant amounts of money.

“In addition to using Archetype in the marketing function, Virgin Money is also evaluating the use of Jaywing’s AI technology within its risk function. We believe that those banking and financial services firms that embed AI across business functions are likely to ride the waves of disruption.” 

Archetype is the first commercially available deep learning-based scoring product which solves the ‘black box’ problem around explainability, giving a full account of how a model has been constructed. The software replaces the role of traditional modelling tools and, unlike other approaches, offers a mathematical guarantee that its output will adhere to behaviours specified by the user for each individual variable – a feature that is critical in regulated environments like banking and lending.