In the post IFRS 9 (and CECL in the US) financial sector there is an opportunity to reduce flows to forbearance and heavy impairment penalties while remaining compliant with regulatory requirements by creating smarter, analytically driven collections strategies.
We have extensive experience delivering collections strategies across both Unsecured and Secured portfolios, focusing on support in four core areas:
Behavioural scorecards designed for customer management purposes are sub-optimal solutions for collections segmentation. Instead, bespoke collections scorecards such as self-cure and charge-off propensity models can significantly improve segmentation.
Our expertise in experiment design and the monitoring and analysis of results can be incorporated to optimise collections segmentation.
Smart segmentation can identify customer segments where human contact adds maximum value for customers (by exploring options for resolution) and firms (by targeting resources effectively).
Tailored Contact Strategies
The use of digital contact reduces reliance on traditional dialler contact so that firms can refocus agent effort on more complex cases. Expertly designed dialler experiments can answer the questions of which number, which day and what time to increase right party contact rates.
Digital contact mediums such as virtual agent, email, SMS and mobile banking applications are low cost options that can be utilised to prompt customers likely to self-cure.
Messages tailored to segments that are likely to charge-off can direct customers to collections portals containing targeted advice and tools, and sign-post sources of independent help. These portals can be used to collect income and expenditure information with a view to agreeing repayment plans or partial settlements.
Adherence to relevant regulatory statements, such as those outlined in PRIN, CONC and MCOB, as well as the most recent thematic reviews undertaken by the OFT and FCA, should be a key consideration to ensure firms minimise exposure to future conduct risks.