1. © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. Making The Best Offer Adem Yilmaz Chief Risk Officer Hyundai Capital America Aleligne Amera Director, Pre-Sales Consulting FICO

2. Risk vs. Reward Surgical Pricing vs. Communication Customer Satisfaction vs. Shareholder Value Effectiveness vs. Efficiency Competition vs. Survival Portfolio Yield vs. Secondary Markets A business engine that enables us to model our decisions, optimize and refine them is critical for realizing our strategic objectives The Best Offer – Borrow at 2%, Lend at 6%, at the Beach by 3 pm If it were only that simple! As portfolio managers, we are balancing complex and often contradicting goals

3. HCA has implemented an optimization framework that gives us agility in pricing while allowing management to understand the implications. We call it the “Affirmative Offer Optimization Engine” The “Offer” Ecosystem – Full Life Cycle Implications Downstream implications and the external factors that are driven by the offers we make. External Factors Disruptive Pricing Dealer Satisfaction Customer Satisfaction Brand Image Competitive Landscape Corporate Rating Macro Economic Factors Regulatory Factors Internal Factors Risk Appetite Balance Profit, Losses & Volume Operational Costs Underwriting (Rehash) Collections Operational Risk  Rehash =  Inconsistent Decisioning Economic Capital and Reserve Implications Securitization Whole Loan Sale

4. Affirmative Offer Optimization Engine – The Concept Decision Modeling Evaluates and monitors data that would impact decisioning Builds a graphical model for one or more decisions Establishes mathematical relationships within key variables Decision Optimization Finds best combination of decisions based on Decision Model, Constraints, and Objective Uses permutations on key constraints to evaluate alternatives Decision Deployment Incorporates optimized strategies into core processing solutions immediately Manages and maintains the decisioning strategies to efficiently respond to market demands and changes Decision Refinement Refines strategies for interpretability, robustness and ease of implementation Ensures compliance and palatability

5. Affirmative Offer Optimization Engine – In Practice Migrating from a single offer environment to a more educated, negotiable offer requires the ability to optimize the deal structure – at a deal and a dealer level – enabling the dealer to self rehash Market Decision Car Capacity Credit Multiple Offers Single Offer Current Structure With an Affirmative Offer Engine Offer #1 Offer #2 Offer #3 Offer #1 FICO 680 Advance 140% PTI 15% Term 60 Loan $18,000 APR ? FICO 680 Advance 140% PTI 15% Term 60 Loan $18,000 APR ? Declined Advance 140% PTI 12% Term 72 APR 8% Annualized LTL 4.3% Advance 120% PTI 15% Term 60 APR 4% Annualized LTL 2.4% Advance 120% PTI 10% Term 60 APR 2% Annualized Loss 1.1% Application Decision Engine Optimization Engine Offer #2 Approved as exception Decision Car Capacity Credit Decision Engine & Credit Analyst Dealer Self Rehash ??? Credit Analyst Dealer Risk Cost Price Goal

6. In Summary… To make a best offer – Identify the ultimate goal – be it revenue maximization, market dominance or other and prioritize them Based on the Goal – define the business problem that you wish to optimize Identify the parameters and variables – both upstream and downstream to the decision point Create processes that help transition the scenario engine into the real world (Infrastructure limitations, dealer education, feedback loop and rapid improvement) Above all – Monitor full lifecycle impact of the optimization engine

7. © 2014 Fair Isaac Corporation. Confidential. FICO Optimization Solution for Alternative Deal Structure 7

8. © 2014 Fair Isaac Corporation. Confidential. Optimized Deal Structures Volume Loss Deale Sat. Profit ► Providing choices to consumers ► Manage trade-off ► Conform to rules and regulations of the lender Finding the Right Balance Is Hard

9. © 2014 Fair Isaac Corporation. Confidential. FICO Optimization Solution for Alternative Deal Structure

10. © 2014 Fair Isaac Corporation. Confidential. Value Proposition: High ROI Assumptions: ► Mid-size lender ► $1B per month booking ► 200K applications per month ► 30% auto-approval rate ► 2%–5% Increase in volume due to choices ► 1.5% risk adjusted spread ► 3%–5% reduction in annualized losses due to optimal restructure ► Labor cost saving of 3–5 min per manually reviewed application ► Expected increase in risk adjusted spread: ► $8–$21 MM per year ► Expected reduction in losses (at 0.65%): ► $5–$9 MM per year ► Expected reduction in FTE: ► $2–$3 MM per year ► Total annual benefit: ► $15–$33 MM per year ► Expected 3-year ROI: ► 21:1

11. © 2014 Fair Isaac Corporation. Confidential. 1.Cost savings and loss reduction 2.Increase in volume as a result of improved deal structure and higher dealer satisfaction (improved dealer relationship) 3.Minimal IT requirement in changing tiers, LTV, and other policies related to deal structuring 4.High agility—Speed to respond market conditions is fast 5.Stable margin—ability to counter deteriorating yield with accepted level of risk 6.Intangible benefits: ► Business consistency in restructuring deals since it is driven by Finance Manager UI ► High dealer and customer satisfaction Other Tangible and Intangible Benefits of FICO ADS Solutions

12. © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. Thank You! 12 Adem Yilmaz Chief Risk Officer Hyundai Capital America Aleligne Amera (310) 283-8177 aleligneamera@fico.com

13. © 2014 Fair Isaac Corporation. Confidential. Learn More at FICO World Related Sessions ► Auto Finance Regulatory Tune-Up ► Using Data to Improve Consumer Touchpoints ► Helping Your Dealers to Create a Better Customer Experience ► State of the Auto Finance Industry: Panel Discussion Products in Solution Center ► FICO ® Origination Manager ► FICO ® Xpress Optimization Suite Experts at FICO World ► Mark Ryan ► Ken Kertz Blogs ► www.fico.com/blog 13

14. © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. Please rate this session online! Aleligne Amera aleligneamera@fico.com