1. FICO will directly provide credit scores to lenders, bypassing credit bureaus. 2. Shares of Equifax and TransUnion fell 9% and 12% after the announcement. 3. FICO aims to cut costs for lenders by streamlining score access by 50%. 4. CEO describes the change as a turning point in credit score delivery. 5. FICO shares surged about 20%, reflecting positive market sentiment.
FICO’s direct score delivery reduces intermediary costs, positively impacting margins and competitiveness, similar to how financial disruptors have surged when cutting intermediaries.
The decision to bypass credit bureaus threatens their revenue, while enhancing FICO's market position significantly affects its stocks and influences investor perception.
Expect immediate market reactions due to strong investor sentiment and direct competition with major bureaus, akin to rapid market responses seen in fintech disruptions.