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Overhaul of client’s collections and recovery processes drives strong improvement across buckets

Home > Banking > Collections Optimization > Overhaul of client’s collections and recovery processes drives strong improvement across buckets

October 20, 2022

Banking

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Case Studies

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Collections Optimization

 
Challenge:

A large client in the US credit card market was not getting the performance on its forecasted portfolio roll and delinquency rates.  Most of its booked account vintages were underperforming, which was restricting how fast it could grow its portfolio. The client wanted to improve performance, reduce operating costs, and ultimately lower charge-off rates.

PAG Solution:

PAG was hired to re-engineer the client’s Collections and Recovery processes.  After an initial diagnostic, PAG was able to determine our client was over-penetrating its delinquent portfolios and not taking advantage of scorecards and technology it had at its disposal.  PAG helped analyze delinquency trends and built a number of strategies including a Bucket 1 import strategy, payment propensity strategies to optimize payment suite offerings, and a channel optimization strategy to help contact the customer via their channel of preference.

PAG also built a vendor placement model to help determine which third-party vendors should work late-stage delinquency and charged-off accounts based on prior performance and helped design business requirements for the client’s website so full collections functionality could be achieved. As a result, the Client could start driving customers there for payment instead of over-dialing.

Client Benefits:
  1. PAG increased website traffic by 50% and online payments increased from 30% to 60% of delinquent payments in the first six months of the transformation.
  2. Operating costs were reduced by 35% in the first six months as the Client used SMS and email to replace much of its dialing and drove customers to the website via embedded links to pay there.
  3. Payment suite optimization was increasing by 20% with more targeted offers reducing backend roll rates by 12% in the first six  months.
  4. Recovery rates improved by 11% in the first six months as vendor placements were optimized using the new PAG model.
  5. Customer complaints dropped by 23% as more customers were paying online, which led to fewer outbound phone calls.
  6. Overall charge-off rates were reduced by 7% in Year 1 and the Client continues to report those numbers improving in Year 2.
  7. The Client has re-engaged PAG to look at its fraud servicing area to produce similar results.

Managing Partner of U.S. Operations

Mr. LaRoche is a resourceful, results-oriented Executive with over 25 years of financial services experience; emphasizing collections risk management, dialer operations, MIS and reporting analytics, acquisition strategies, loss forecasting, credit policy, account management strategies, portfolio conversions, due diligence, and collections operations management. He also has over 15 years of direct risk management experience, with 3 years of collections line management experience possessing excellent analytical skills and the ability to manage diverse groups in strategies, modeling, collections, dialer operations, loss forecasting/loan loss reserve modeling, financial analysis, operations and loss avoidance.

David started his career in 1997 as a customer service representative for Travelers Bank. Since then, he has held the following senior positions:

  • Director, US Operations for Bridgeforce Consulting
  • Sr. Director and Call Center Leader for American Express
  • SVP. Collections Strategy and IT leader for Washington Mutual

Chief Risk Officer

Dale Hoops has over 25 years of experience within the financial services industry, with a focus on Risk Management, Collections, Fraud, Account Management Strategies, Loss Forecasting, stress testing, and economic analysis.

Dale started her financial services career in 1996 as a part time customer service representative and teller in a small financial center while attending the University of Richmond. Her career has included senior roles at Bank of America, Citi, and MBNA America. She has experience with multiple retail products, including consumer and commercial cards, private label and co-brand, deposits, vehicle lending, mortgage, and home equity. Her key strengths have been identifying opportunities for improvement through business analysis, strategy development, and risk governance.

In addition to her professional career, Dale has extensive leadership experience with non-profits with event planning, policy, budget, and audit management. She is a member of the Board of Directors for the Girl Scouts of the Chesapeake Bay, which serves 8,000 girls in Delaware, Maryland, and Virginia. She is the former President, Vice President, and Treasurer at a local Parent-Teacher Association, former community pillar chair for Bank of America’s LEAD for Women Delaware network, and served on the leadership team for the Field of Dreams Relay for Life event to raise funds for the American Cancer Society.

Chief Data and Analytics Officer

Mr. Ridgeway has over 30 years of experience within the financial services industry, including Risk Management, Finance, Project Management, Compliance, MIS, IT & Operations. He has held senior roles at several of the top 5 Banks, including MBNA, Wells Fargo & Citibank. Dee has expertise in Risk oversight and a wealth of knowledge in the regulatory footprint (CFPB / OCC / FRB) in financial services. He has hands-on knowledge in the strategy world with numerous credit products including: credit cards, auto lending, mortgage and home equity, and unsecured lending. Dee is a co-founder of Predictive Analytics Group, worked as a Senior Consultant for Hoops Consulting, LLC., and owned & operated Mayflower Analytics LLC.

From a Risk Management perspective, Dee has experience in portfolio management in credit underwriting and loss mitigation during several growth cycles and economic contraction periods. He understands the needs and partners well with operational risk, modeling, and loss forecasting risk functions.

Dee is a SME on risk data strategy (data architecture, data management, and systems integration) and often creates a "passable bridge" between Risk and IT that translates business needs into executable business plans.

From an MIS, reporting, and portfolio analytics perspective, Dee has a proven track record of designing portfolio reporting that meets executive and end user needs that often have been labeled the "gold standard."

CEO and Chief Strategy Officer

Mr. Hoops has over 25 years of experience within the financial services industry, including Credit Collections & Fraud Risk Management, Business Operations, Control &Compliance, Strategic Planning, Forecasting, and Marketing Analytics. He has served as a Chief Risk Officer for Barclaycard US Partnerships, a Global Scoring Head at Citibank, and a Site President for Wells Fargo Financial. Steve is a co-founder of Predictive Analytics Group and has owned & operated Hoops Consulting, LLC for the past 4 years.

Steve started his financial services career in 1993 as a part-time telemarketer while attending the University of Delaware for his Business Administration degree. Mr. Hoops has spent his 25-plus years within the industry building best-in-class operations with each company he has supported. His career has been highlighted by leading several large functions for several Tier 1 and Tier 2International Banks, including:

  • Credit Policy (CRO for $20B co-branded portfolio, Barclaycard US partnership)
  • Credit Policy (SVP for $28B retail Co-brand & Private Label portfolio, Citibank)
  • Loss Forecasting / Loan Loss Reserves ($30B Consumer portfolio, Citi-Financial)
  • Collections Risk Management ($70B Co-brand & Private label portfolios, Citibank)
  • Modeling ($30B Consumer Loan & sub-prime Mortgage portfolio, Citi-Financial)
  • Collection Operations (Head of 410 person operations center, $17B Auto, Personal Loan & Mortgage portfolio, Wells Fargo)
  • Credit Analytics (MBNA/Bank of America, Wells Fargo, Citibank)