New Stress Test and Forecasting Capability Helps Businesses Plan
for Potential Recessions and Economic Downturns
ATLANTA, June 8, 2000
Equifax Inc. (NYSE: EFX) has created a new capability to help
businesses from all industries evaluate how economic fluctuations
will affect customer retention and, most importantly, the bottom
line. Equifax and WEFA, Inc. have partnered to offer a financial
"stress test" that will give businesses peace of mind
when calculating their financial futures.
Through the new "stress tests" now available, which
use an extensive range of recessionary and baseline scenarios,
businesses can evaluate the effect of market dynamics and create
strategies to optimize long-term customer relationship value.
This new capability is part of a comprehensive risk management
discipline currently used by some of the largest US financial
institutions, including Bank One and Household International,
Inc.
"Leading economic advisors, like Federal Reserve Board Chairman
Alan Greenspan, have advocated that companies test the economic
assumptions that underlie their strategic business objectives,"
says Jeff Dodge, executive vice president of Equifax Knowledge
Engineering. "Our clients can now stress test their business
assumptions and apply the results to revise contingency plans
in the event of sudden economic changes."
By combining Equifax's core strengths in information management
and analytics-based solution development with WEFA, Inc.'s leading
economic information and consulting practice, Equifax is able
to offer a solution which protects business in all industries
from customer attrition and other financial vulnerabilities caused
by recessions or downward turns in the economy.
"Most of the industry's current econometric models base
observations on periods of prosperity. As a result, many clients
have little or no quantitative evidence of the potential impact
that a recession would have on their accounts," says Mark
Lauritano, senior vice president, resource planning services of
WEFA, Inc. "By providing informed scenarios for both baseline
and recession situations, the Equifax Risk & Usage Forecast prepares
companies to act swiftly in case of abrupt economic shifts."
Using extensive aggregated credit data and econometric analytics,
the new capability assists companies in designing strategic business
objectives, including:
- Broad-based new market planning to aggressively target high
growth areas and analyze high risk markets;
- Stress testing based on customized solutions, combining
customer data with information about specific economic and
credit environments;
- Strategic target marketing capabilities for prioritizing
resources.
How It Works
The new capability, as part of the enhanced Equifax Risk & Usage
Forecast, integrates aggregated credit data from both Equifax
and client databases. By applying sophisticated econometric forecasting,
this tool allows clients to evaluate their customer bases using
an unlimited number of scenarios. The forecast overlays consumer
credit attributes with recessionary and baseline economic assumptions
to create a robust analytic and stress testing tool. Using 231
Metropolitan Statistical Areas (MSAs), the forecast provides evaluation
and measurement of national and regional economic changes, identifying
those geographic markets that are most vulnerable and those that
are most resilient.
About Equifax Inc.
Equifax, a worldwide leader in shaping global commerce, brings
buyers and sellers together through its information management,
transaction processing, direct marketing, and customer relationship
management businesses. Atlanta-based Equifax (NYSE: EFX) serves
the financial services, retail, credit card, telecommunications/utilities,
transportation, information technology and healthcare industries
and government. Equifax adds knowledge, expertise, convenience
and security to provide value-added solutions and processes for
its customers wherever they do business, including the Internet
and other networks. Equifax employs about 15,000 associates in
16 countries with sales in almost 50 and has $1.8 billion in revenue.
About WEFA, Inc.
WEFA works with organizations throughout the world to understand
and quantify how the outside economic environment impacts their
operations. With the largest collection of economic, demographic
and related information, a team of experienced business and economic
analysts and an innovative Internet-based delivery mechanism,
WEFA has the resources needed to address the important issues
facing business, government and finance.
Statements in this press release that relate to Equifax's future
plans, objectives, expectations, performance, events and the like
are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 and the
Securities Exchange Act of 1934. Future events, risks and uncertainties,
individually or in the aggregate, could cause actual results to
differ materially from those expressed or implied in these statements.
Those factors could include changes in worldwide and U.S. economic
conditions that materially impact consumer spending and consumer
debt, changes in demand for the Company's products and services,
risks associated with the integration of acquisitions and other
investments, and other factors discussed in the "Forward-looking
Information" and "Year 2000 Information" sections
in the management's discussion and analysis included at Part II,
Item 7 in the Company's annual report on Form 10-K for the year
ended December 31, 1999.
About Equifax Credit Bureau
Credit Bureaus Menu
Credit Overview