F-Distribution
Used within regression analysis to test the goodness of fit.

Facility
A facility includes different offerings from a bank e.g. bank account or credit card facility. Most bank clients have multiple facilities.

Facsimile Draft
A substitute document. A paper record that may be provided by an acquirer as a substitute for the sales draft.

Factor Analysis
A statistical procedure that seeks to explain a certain phenomenon, such as the return on a common stock, in terms of the behaviour of a set of predictive factors.

Factor Model
A way of decomposing the forces that influence a security's rate of return into common and firm-specific influences.

Factoring
A sophisticated financial tool that enables credit sales to be converted into working capital or allows a third party to purchase an outstanding book of debts at a calculated value.

Fair Credit Reporting Act
U.S federal government legislation controlling the manner and parameters of how data is reported to the credit bureau.

False Positive
An individual that scores in the non-prime segment of a portfolio but is a good credit risk.

Fast Clear Down
A caller who hangs up immediately when they hear a delay announcement.

Fat Tails
A term used in statistics to describe a higher probability of the occurrence of extreme events than that prescribed by a normal distribution. The term comes from the visual representation of a distorted bell curve. The higher probabilities associated with events far from the mean cause the area under the curve far from the mean to be substantial, rather than asymptomatically disappearing. Also see Leptokurtosis and Kurtosis.

FatMAN Schedule
A mnemonic for the standard schedule for quarterly extracts of Credit Bureau Scores for account management purposes. F = February, M = May, A = August, N = November.

Feature
A field used to describe or predict the variations that occur in the values of a dependent variable or field. Also known as Independent Variable.

Feature Extraction
Forming sets of linear or non-linear combinations of independent variables to use as predictors in a predictive model. The number of features extracted will be much lower than the number of independent variables available. Feature extraction can be used as an alternative to or supplement to variable selection, or to provide dimensions for visualising the data.

Feature Trade-Off Analysis
A method for establishing respondents’ utilities based on the preferences they express for combinations of product attributes and features. Also referred to as Conjoint Analysis.

Federal Reserve Board
The Federal Reserve Board, otherwise known as the ‘Fed’, this is the central bank of the United States. Major responsibilities include controlling the supply of money, managing public debt, issuing government bonds, and assisting with U.S. monetary policy.

Fee Only Bads
Accounts that have become bad, solely due to fees. These accounts are typically excluded from behaviour score developments.

Fees
Up front charges generally applied for the securing of a loan. Fees can be paid in cash or financed as part of the loan. Finance fees makes the loan balance higher and equity balance lower. Many of these fees are negotiable.

Fiber Optic Cable
A transmission medium composed of small strands of glass, providing a path for light rays that act as a carrier.

FIDONET
An older network of bulletin board systems.

Fiduciary
This refers to a person who inherits the enjoyment of an asset but not the ownership of that asset. Asset ownership is usually given over to another person.

Field
A column in a database that contains the same kind of information for each record. For example, an Age field contains the age of each person in the database. A field can be either dependent or independent. Also known as Attribute and Variable.

FIFO
Acronym for First In First Out. FIFO is a data structure where items come out in the same order that they came in.

File Compression
An essential tool which makes data smaller so that more of it can be transmitted in less time. Compression takes place via one of several compression standards, including JPG, MPEG, GIF, TIF, and ZIP.

File Transfer
The copying of a file from one computer to another over the computer network.

File Transfer Protocol
A method of transferring files from one computer to another over the Internet. Also known as FTP.

Final Liquidation
The winding up of a company, which is unable to pay its debts, by a liquidator.

Final Score
The credit score that includes application data and all other internal and external data.

Final Score Report
A report that relates the final score distribution, for a specific set of applications, to the accept/reject decision. This is typically produced on a monthly basis, in order to monitor the lending function.

Final Settlement
The completion of a transaction when delivery of all components to a trade have been accomplished.

Finance Charge
The total dollar cost of credit, including interest and other defined charges; certain fees not included in the finance charge must appear separately in the disclosure statement.

Finance Companies
These are companies that make loans at higher rates than are available from banks or credit unions.

Financial EDI
Electronic exchange of payments, payment information or financially related documents in standard formats between business partners.

Financial Institution
Any organisation dealing in financial instruments or providing financial services.

Financial Leverage
Use of debt to increase the expected return on equity. Financial leverage is measured by the ratio of debt to debt plus equity. See Gearing.

Financial Strategy
Practices a firm adopts to pursue its financial objectives.

Fine Classing
The process of defining all of the possible attributes for every characteristic and then analysing each attribute to show their good/bad distributions. Also known as a Detailed Analysis.

Finger
A program that displays information about someone on the Net. Finger is sometimes used to distribute public keys.

Finger
A method by which one Internet user can determine the location of another Internet user.

Finger Print
A hash of a public key. By reading their key fingerprints over the telephone, people who know each other’s voice can confirm their public keys.

Finger-pointing Syndrome
All-too-frequent result of bugs in new or experimental configurations. The hardware vendor points a finger at the software. The software vendor points a finger at the hardware. All the poor users get in the finger.

Firewall
A specially programmed computer that connects a local network to the Internet and for security reasons only allows certain types of messages through.

First Generation
An adjective for the first version of a technology to be introduced to the market.

First In First Out
First In First Out is a data structure where items come out in the same order that they came in. Also known as FIFO.

First Mover
A company that gains a powerful competitive edge by being the first to establish itself in a particular industry segment.

First-to-Market
First-to-market means being the first to launch a product in the marketplace.

Fiscal Policy
The use of government spending and taxation policies to influence the economy.

Fiscal Surplus
A scenario where the government receives more in revenue than it spends over the course of the year.

Fitted Odds
The odds associated with applicants or accounts at a given score or score range.

Fixed Field
Organisation of a tape or data file in which each group of data, such as name, address, postal code, has a fixed location and length within the file.

Fixed Interest Rate
A situation where the account holder receives a pre-determined and unchanging rate of interest, guaranteeing a calculated interest return.

Flash Memory
A form of non-volatile computer memory that can be electrically erased and reprogrammed. Examples of applications include digital audio players, digital cameras, mobile phones and USB flash drives.

Flat File
Another name for a sequential name file. This is contrasted with a Database File, which is not flat due to the indexes. See Database.

Flipping
Common term for frequent unnecessary refinancing of loans by lenders or brokers.

Float
The amount of money held in an electronic purse tied up in the payment process.

Floor Limit
A currency amount that Visa/MasterCard has established for single transactions at specific types of merchant outlets and branches, above which authorisation is required. There are two floor limit types: Standard Floor Limit and Zero-Floor Limit.

Fluctuating Payments
Where there is a variable or fluctuating interest rate, interest payments will vary according to the change in interest rate, as payments are re-calculated according to the new rate.

Focus Group
A group of customers who are assembled together in a conference room to discuss a particular product. These are useful for learning what the public thinks of your product or message or company.

Force
The after-the-fact entry of a purchase resulting from a referral message or a downtime interruption of service from a Network, which enables the merchant to enter the transaction into the EDC batch. See Offline Transaction and Electronic Draft Capture.

Foreclosure
The legal procedure by which a lender holding a mortgage on a house is forced to sell the house to obtain repayment of a loan.

Foreign Currency Surcharge
A charge for certain purchases made in a foreign currency.

Foreign Exchange
The process of trading the currency of one country for that of another.

Foreign Exchange Exposure
A situation in which a company selling/purchasing in a foreign currency runs the risk of receiving a reduced amount or paying an increased amount due to a fluctuating exchange rate.

Foreign Exchange Rate
The value of a nation’s currency in terms of another nation’s currency.

Foreign Investment Restrictions
These are regulations designed to control the level of foreign investment activity in a particular country. Typically, restrictions and regulations are intended to maintain and protect the domestic financial system.

Forex
Foreign Exchange. Various instruments used to settle payments for transactions between individuals or organisations using different currencies.

Format
The way data is organised on a disk or tape. There is no standard format and every company has its own format.

Fortune 500
Fortune magazine's listing of the top 500 US corporations determined by an index of 12 variables.

Forward Transactions
Foreign exchange transactions settling between three business days and one year.

Frame Relay
An emerging network access protocol designed to accommodate data applications. It is characterised by four important features: 1.High transmission speeds 2.Low network delay 3.High connectivity 4.Efficient bandwidth use.

Franchise
An organisation that grants a license to a group of merchants to market a company's goods or services in a particular territory, and wants to provide bankcard processing to its members.

Fraud
Deception for the purposes of obtaining credit. Also see SAFPS, Identity Theft or Encryption.

Fraud Scoring System
A fraud scoring system uses a scorecard to identify potentially fraudulent credit card transactions and/or applications.

Free Standing Insert
This is usually a coupon or other promotion found in a magazine or newspaper. This is the least expensive way to distribute coupons. Also known as FSI.

Freeloaders
Credit cardholders who pay their balance off in full each month, thereby incurring no interest. See Full Payers.

Freeware
Free software that is available on the Internet for downloading and is used and redistributed at no cost to the user. Shareware, on the other hand, requires that you pay a registration fee after a certain amount of time.

Freeze
When your computer or software program freezes and suddenly stops working.

Frequency
1) Used within an RFM model, this is how often has the customer purchased in the last 3,6,12 months, or lifetime? 2) A term for how many times a person buys from you.

Frequency Tests
The counting of variable contents, used for establishing outliers or rogue values, to better understand data in the initial stages of a development.

Frequently Asked Questions
A term that refers to a list of questions/answers provided by companies relating to software products, Web site, etc.

Front End
The front end of a site consists of everything that a user sees and experiences on a Web page. Also see Back End.

Front Office Automation Systems
Applications and products that provide Customer Relationship Management (CRM) for your company. These systems manage the touch points that you have with customers, which means that they provide a vast amount of information about your current and potential customers.

FSI
Acronym for Free Standing Insert. This is usually a coupon or other promotion found in a magazine or newspaper.

FSP
Financial Service Provider.

FTP
Acronym for File Transfer Protocol. A method of transferring files from one computer to another over the Internet. See Anonymous FTP.

FUI
Fake User Interface - those irritating online banner ads that have false interface elements such as pull down menus, search boxes, input fields et cetera to trick users into clicking on them.

Fulfilment
The process of responding to a customer request with literature or products. Fulfilment is usually outsourced to a fulfilment house.

Fulfilment
The acquirer's response to an issuer's retrieval request for a sales draft. The acquirer supplies the issuer with the original draft or a clear reproduction. The fulfilment record confirms the response and initiates reimbursement to the acquirer for fulfilling the request.

Full Payers
Credit cardholders who pay their balance off in full each month, thereby incurring no interest. See Freeloaders.

Full Service Processing
A relationship with a company that provides a series of services on an outsourcing basis. The company is paid fees for the services performed and does not hold the risk for Credit/Fraud losses.

Fully Amortising
This describes a loan where the balance owed at the scheduled end of the loan is zero if all regular monthly payments are made as scheduled.

Function
A mathematical correspondence that assigns exactly one element of one set to each element of the same or another set.

Funding
Refers to the payment to a merchant for his submitted deposits.

Funds Transfer System
A wire transfer network, ACH, or other communication system in which a company is a member and through which a payment order by a bank may be transmitted. Includes: SWIFT, CHIPS, MasterCard and VISA.

Fungible Securities
Financial term. Securities which are equivalent, and of the same class and issued by the same source, and can be substituted and interchanged.

Future-proofing
Making a Web site or technology sound enough to anticipate future development so that it won't become outdated too quickly.

Futures
A contract for the purchase and sale of a fixed commodity, financial instrument or index at a fixed price in the future. This practice originally evolved to allow producers and consumers to hedge their risk. Speculative futures traders can easily make or lose significant amounts of money.

Fuzzy Logic
A technique for dealing with imprecise data and problems that have many solutions rather than one, including ranges of values. It resembles human logic.