U.S. issuers face a daunting challenge: Finding growth opportunities in an industry that is being buffeted by contraction and constraint.

Transaction scoring—the use of real-time transaction data in scoring for credit risk—can increase the predictive accuracy of risk management by creating account-level variables that identify patterns of behavior in real time. Using transaction scoring helps issuers see more deeply and clearly into their customers’ behavior, resulting in more precise, measured, and responsible treatment of risk.

The benefits of transaction scoring extend beyond risk management to identifying opportunities. By reducing false positives, transaction scoring can provide greater visibility into positive or neutral use of credit cards, which issuers can leverage in cross-sell, up-sell, promotions, or product fine-tuning.

1. Proprietary MasterCard Advisors analysis with major U.S.-based issuer.