Nomis Price Optimizer for Home Equity provides a pricing optimization and rate management platform driven by data, analytics, technology, and methodology. The solution enables home equity executives to:

  • Achieve more consistent, predictable results
  • Control credit losses by tier
  • Attain and sustain profit targets
  • More accurately forecast volume in the context of competitor actions and the interest rate environment
marketing_collateral_icons_infographic.png View Infographic »
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The efficient frontier graph shows where you are vs. optimal growth/profit points.

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Running different scenarios allows you to make smarter decisions that keep you on track to meet your goals.

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By using a closed loop pricing process you constantly measure how your actuals are performing against plan.

Solution

Core to the solution is the ability to gain valuable insight into customer preferences and to leverage a more consistent and efficient pricing process. The Nomis pricing and profitability management solution offers an established approach to creating business value and competitive advantage through a proven pricing methodology that:

  • Incorporates price elasticity, utilization of credit limits, and prepayment impact
  • Optimizes outcomes subject to strategic goals at any segmentation level
  • Improves book-to-approval rates, increases margins, and stabilizes losses

The solution is rapidly delivered with minimal IT impact through our proven implementation process and secure hosted environment. View 3-minute video »

Why Nomis?

Strategic partnership with ICON Advisory Group

The Nomis and ICON strategic partnership allows for the seamless integration of ICON LenderBenchmark data into the NPO. This exclusive partnership allows lenders to leverage empirical insights and a complete view of competitive rates and transactions across 6MM+ home equity transactions, representing over 80% of the US market, within the Nomis Price Optimizer. The integration automates the link between a lender’s review of competitive rates and pricing decisions, empowering lenders to:

  • Evaluate current pricing strategy against the most recent competitive changes in the market and determine if action is required
  • Evaluate competitive positioning by pricing cell at a local market level based on actual rates
  • Enforce pricing relative to the market through business rules

Using response and profit models in the pricing process

For each pricing segment, Nomis fits a price response model to each client’s historical data in order to predict customer behavior (conditional and final book-to-approval rates) as a function of rate relative to a competitive benchmark.  

In addition to the price response model the solution also applies an incremental profit model that forecasts profitability at the segment level. The profit model forecasts a full P&L for each segment including operating costs and credit losses as well as the impact of pre-payment and utilization on profitability.

This combination of response and profit models enables lenders to run what-if scenarios based on assumption changes to examine and evaluate potential performance outcomes.

Constraint-based pricing optimization

The Nomis pricing and profitability management solution enables pricing managers to translate their business goals directly into the constrained optimization process. Constraint-based optimization combines price response models with your business objectives to generate pricing scenarios. It then automatically makes the profit/volume tradeoff on a cell-by-cell basis.

With the Nomis solution, lenders can:

  • Set pricing bounds — permissible rate changes at the segment level
  • Manage performance goals — targets for any subset of the portfolio along any key performance indicator, such as a 5% increase in $50K+ sales
  • Set linear relationship rules — rate relationships across segments (e.g., rate increases with risk & term, decreases with amount)
  • Evaluate pricing scenarios: effective what-if analysis
  • Shorten the rate review process by creating a single pricing workbench
  • Maximize the number of rates which can be reviewed
  • Leverage price response & profit models to forecast the profit and volume impact of rate changes
  • Drive financial, strategic, and operational benefits

This robust functionality enables lenders to stress-test their portfolio and pricing decisions under varying macroeconomic, competitive, cost, and risk scenarios.

Performance analysis

NPO provides extensive analysis and reporting functionality for performance monitoring, creating a more informed basis for pricing decisions, including the ability to:

  • Compare predicted vs. actual performance to analyze profit, volume, and risk variances due to competitive pricing actions, rate discretion, changes in funding costs, and shifts in customer preferences
  • Drill down into any combination of segments and pricing variables to understand underlying portfolio trends
  • Improve estimation of future anticipated vintage performance through pro forma profitability estimations on an account level

marketing_collateral_icons_data_sheet.png View the Data Sheet »

Summary

The Nomis pricing and profitability management solution for home equity leverages customer data, competitive market data, advanced analytics, innovative technology, and tailored business processes to enable complete pricing scenario planning and profitability management.

This solution enables home equity lenders to change the nature of pricing from a computed metric to a strategic lever to achieve portfolio goals.

Case Study Summary


Customer

US Regional Bank

Business challenge

Improve profitability while keeping volume stable

Financial results

20 bps increase in NIM without loss in volume

Strategic benefits

Better understand volume profit trade-off and better stakeholder management

Operational gains

Using weekly ICON Lender Benchmark data performance can be reviewed and strategy can be adjusted based on changes in the market

Price Optimization for Home Equity

View the infographic »

Price Optimization for Home Equity

CEO Insights for Home Equity Portfolio Growth

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View webinar: CEO Insights for Home Equity Portfolio Growth Webinar

Learn More

Download the Solution Brief.

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Price Optimizer for Home Equity is part of a comprehensive suite of advanced decision-support and frontline pricing solutions for retail bank lending.

HOME EQUITY