Recently FICO polled attendees of a webinar to find out what area they felt could be improved to drive the biggest C&R gains. An overwhelming 50% said it was technology. Process also emerged as a key theme, coming in second at 18.2%.
These results are quite telling because, even though it was an informal poll, the group included all levels of C&R professionals from across eight countries. Here are three of the most promising areas of innovation:
- Mobile communications. Using interactive SMS and mobile services in collections has been show to greatly increase contact rates and speed of repayment: 40% of borrowers who commit to mobile collections payments make them within the first 30 minutes, and 77% pay within two days. In addition, the mobile channel is significantly less expensive than the traditional call center.
- Optimizing loan workouts. The choice of if and when to offer a loan settlement is still an inexact science, and current practices, like rank-ordering by risk, often don’t lead to the best results. To improve performance, FICO clients have begun using advanced analytics to examine customer behaviors and balance portfolio resources and constraints—with results that include up to 10%+ improvement in net present value (NPV).
- Optimizing agency management. Let’s face it, external collections agencies prioritize based on commissions and likelihood to pay, which means your accounts may take a back seat to those of your competitors. Instead, our clients are optimizing account placement based on agency performance and other key factors. This approach results in improvements like 10-20% increases in liquidation rates, and allows clients to set appropriate incentives to make agencies compete for their business.
FICO colleagues have been sharing these types of C&R best practices and innovations with clients worldwide in latest C&R webinar series. FICO invites clients and interested parties to sign up for the next webinar: Gaining Speed to Market with Best Practice Collections Automation.
For details or to read the full story click on the link: FICO Banking Analytics Blog