Dealing with Delinquent Customers

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In 2016, a major card issuer in Southeast Asia called on PulseMetrics to augment the effectiveness of its collection operations on consumer credit accounts. Many of its customers were exhibiting delinquent tendencies by rolling forward in payment. In order to fully understand the behaviour and psychographics of customers, our client acknowledged that it was necessary to apply advanced analytics to manage risk better. Furthermore, on the operations front, its customer service centre had too much customer outreach to handle. Our consultants thus developed a strategy to prioritise customers with the largest propensity to roll forward in payment.

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Cultivating Good Habits for Timely Payments

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We made it our objective for payments to be collected before they were due. In order to know which customers are rolling forward or backward, we developed predictive models using regression analyses. To get into the mind of customers, we created heuristic scoring models for behavioural and psychographic analyses such as the ability to pay and willingness to pay. Finally, we designed a new collections strategy which incorporated both predictive and segmentation models. Other attributes such as the type of card face and the ease of contact were also taken into account so as to carry out customised collections from each customer.

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Attaining Results on All Three Fronts

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Within six months, we proved the accuracy of our predictive models. Our consultants produced a targeted list of customers from the best who were able and willing to pay, to willing but struggling to pay, and the riskiest pool. Customers that were more likely to roll forward were contacted first to pay their credit, while the less delinquent customers were encouraged to roll backward in payment. All in all, we helped our client save collections operations costs due to higher productivity, bump up collection payments due to smarter targeting, and improve customer experience due to the implementation of customised collections action. By offering the right payment option and incentives to roll backwards in payment, the card issuer was able to activate and retain its customers more effectively.