Shanghai Pudong Development Bank (SPDB) Credit Card Centre (CCC), one of the leading credit card issuers in China with more than 40 million cards issued, has used FICO® Customer Communication Services (CCS) to boost collections performance while driving down business costs.
Recent years have seen a rapid development of SPDB’s credit card market, an expanding scale of assets and stricter regulatory requirements on its collection business. In addition, the lender was also experiencing challenges to collection work and risk control due to human resource limitations. So, to improve the risk management of its business and break through the limitations of traditional human collection agents, SPDB looked to intelligent automation and introduced FICO’s CCS system in 2016.
CCS uses intelligent two-way communications such as phone calls, SMS and email to connect with customers with the right message at the right time.
CCS allowed SPDB CCC to tailor different treatment strategies to different groups to increase its effectiveness in debt collection, especially with early delinquency customers. The solution was also used to apply champion/challenger tests to explore more scientific and effective collection strategies and optimize them. Each collection approach was continually improved through analyzing the results and tweaking the strategy using machine learning. This was imperative to make sure the portfolios were being effectively managed during SPDB’s growth period.
At the same time, the SPDB Credit Card Center has saved significant labor costs using automated outbound collections. The collection business now runs its operations using 210 less staff per month, a 30 percent reduction, which has significantly cut collection operating costs, management costs and risk costs. The success of this project has allowed SPDB to reshape its business using Big Data and machine learning to improve efficiency and reduce risk.
During the past three years of continuous model and strategy optimization and iteration, CCS has helped SPDB to fully realize automatic intelligent collection for early delinquency customers and to effectively identify and prevent the risk of non-performing loans at an early stage.
“SPDB continues to use big data, machine-learning and AI with confidence,” said Sandy Wang, general manager for FICO in China. “The bank had already embraced these technologies for scoring, so it was a sensible extension to deploy them for customer collections as well. For their innovation with CCS in modernizing and digitize their banking services SPDB won our 2018 FICO® Decisions Award for Debt Collection.”