Collection Analytics

Collection Analytics: Overview

Banks and financial services organizations approve credit to an individual or organization based on various credit risk & other approval criteria. This helps in minimizing risk at an acquisition stage. In Portfolio and Account monitoring and management stage, the organizations take various measures to manage and minimize risk from the existing customers.

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Definitely, some institutes are better at managing acquisition and portfolio risk and create competitive advantages. Delinquency and charge off rate could be driven from economic conditions as well. The delinquency rate across financial products have gone up during 2008-2010 global credit crisis period.

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Once accounts move to delinquent and charged-off accounts buckets, the financial institute takes various measures to recover the due from the customers. The recovery rates, effort and collection strategies vary based on delinquency stages.

Some of the key principles in collection analytics are:-

Manage the accounts early on/Stage Based Recovery Strategy:

Recovery rate is better and effort is reduced if delinquent & charged accounts are managed early on in the collection process.

Allocate Resources optimally/ Value Based Collection Strategy:

The resources are limited and the institutes want to use them prudently to collect maximum amount. Allocate more effort and resources toward the accounts which have higher ability to pay and expected recovery amount is higher.

TypicalCollection Analytics:

  • Collection Scorecard
  • Contact Strategy for Collection
  • Customer Profiling&Segmentation
  • Collection Amount Forecasting
  • Collection Agent Analytics/Collections Operations Analytics