By David LaRoche
As delinquencies and charge-offs rise, financial institutions must strive for call center optimization. At Predictive Analytics Group, we’ve seen how advanced analytics and AI can transform collection strategies and mitigate losses. Here’s how executives are addressing these challenges and why partnering with analytics experts is crucial.
The Power of Predictive Analytics in Collections
One of the most effective ways to address rising delinquencies is through early identification of at-risk accounts. By implementing predictive analytics models, banks can proactively engage customers before they fall behind on payments. Our GOBLIN enterprise data platform helps consolidate data from multiple legacy systems, enabling a holistic view of customer behavior and financial health.
For example, we helped a large U.S. credit card issuer take better advantage of its scorecards and technology by implanting such strategies as Bucket 1 import, payment propensity, and channel optimization.
We 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.
The result:
- Online payments increased from 30% to 60% of delinquent payments in the first six months
- Customer complaints dropped by 23% as more customers were paying online, which led to fewer outbound phone calls.
- Recovery rates improved by 11% in the first six months thanks to the optimization of vendor payments.
Enhancing Customer Contact Strategies
An omnichannel approach is essential for modern collections. By integrating phone, email, SMS, and social media outreach, banks can reach customers through their preferred channels. However, optimizing contact timing and frequency requires sophisticated data analysis.
PAG’s uses machine learning models and robotic process automation to provide early warnings, personalized engagement, and intelligent prioritization of accounts.
We worked with a major U.S. card issuers that used these strategies to drive a significant reduction in 90+ day delinquencies and operational costs. This success story underscores the transformative potential of advanced analytics in collections.
Empowering Agents with Unified Data
Through call center optimization, agents should get comprehensive customer information at their fingertips to resolve issues efficiently. Many banks struggle with siloed data across legacy systems, hindering agents’ ability to assist customers effectively.
We worked with a medium-sized fintech that wanted to enter the U.S. card market to leverage its strong customer relationships. It had good data history on its customers through its non-card products, but it was in multiple legacy systems and the data was not designed to be migrated from one system to another.
After being asked to evaluate the fintech’s data streams and infrastructure and determine how it could take advantage of its rich data history we identified four major system feeds that contained valuable data and had customer-identifying data to unify that data. So, we used our GOBLIN enterprise data platform to automate the four data streams into one relational database.
Through this process, we integrated the client’s existing relationship data with our 30M-record bureau data set and built a robust set of monitoring reports and automated their delivery so the client can now start each day reviewing the performing of its new card portfolio and making decisions to run its business more effectively.
Continuous Optimization Through Testing
The most successful collection strategies are constantly refined through rigorous testing and analysis. A/B testing different approaches and regularly reviewing segmentation models is crucial for staying ahead of changing customer behavior.
Our GOBLIN platform includes built-in experimentation tools that make it easy to test new strategies at scale. We helped a client improve Bucket 1 roll rates and hardship enrollments by optimizing call routing, target hardship programs, and digital campaigns.
Action Items for Executives
If you want to achieve call center optimization and combat rising delinquencies, consider these steps:
- Assess current data infrastructure and analytics capabilities.
- Implement a unified data platform.
- Develop custom predictive models to identify at-risk accounts early.
- Create an analytics-driven omnichannel contact strategy.
- Empower agents with comprehensive customer data.
- Establish continuous testing and optimization.
Partner with Predictive Analytics Group
Navigating the complex world of advanced analytics can be challenging, especially when dealing with legacy systems and limited in-house expertise. That’s where we come in. Our team of data scientists and industry experts can help you quickly implement these strategies and start seeing results.
Don’t let rising delinquencies and charge-offs erode your bottom line. Contact Predictive Analytics Group today to learn how we can help you transform your call center operations through predictive analytics.
David LaRoche is managing partner of U.S. Operations for Predictive Analytics Group. You can follow us on LinkedIn here.
