Swisscard AECS GmbH, a leading credit card company in Switzerland, has optimized its early collections using FICO analytics leading to a 50 percent increase in revenue from billable collection expenses, a 40 percent reduction in net credit losses, a 30 percent reduction in account terminations whilst also lifting its Net Promotor Score for customers in collections by 11 points through improved customer interactions. For its achievements, Swisscard won a 2019 FICO® Decisions Award for Debt Management.
Switzerland has a stable economy and low delinquency levels, but Swisscard wanted to pursue a new growth strategy targeted at larger numbers of new and risk-appropriate consumers.
To achieve this, a joint team of Swisscard and FICO experts assessed the current state of the collections and recovery process and identified a number of key activities that would increase effectiveness across the debt management lifecycle. FICO recommended the introduction of analytically-driven treatment strategies which led to a more targeted collections focus, including earlier and stronger treatments for high risk accounts.
“With over 1.5 million cards in our portfolio and a 28 percent share of the market, our growth strategy meant taking on new customers with an optimized risk/return profile,” said Ignazio Provinzano, Head of Risk Operations at Swisscard. “We were concerned about the continuation of current high recovery results and higher collection account volumes as well as maintaining the high levels of service for which we are known, so we turned to FICO to help fine-tune our approach.”
Subsequently, a data-driven segmentation strategy has been implemented facilitating a more targeted collections focus. This helped to overcome some of the early collections constraints such as collector capacity and limited use of self-servicing mechanisms such as two-way SMS and IVR.
Substantial additional productivity gains were made from improvements to existing dialler technology which saw a 60 percent increase in collector efficiency. A better customer experience was also established by better aligning customer communications with non-verbal collection actions such as late fee and card block.
“By making improvements across the business, the results have been spectacular,” said Jens Dauner, Managing Director DACH & Central Europe, FICO. “The changes are both effective and multi-pronged; Swisscard has collected substantially more revenue, re-designed its customer communications to create a more consistent and positive customer journey and improved collector productivity.”
“Swisscard had a very clear objective for its business improvement project which helped them remain focused on the analytic techniques that would deliver the best outcomes,” said Leslie Parrish, analyst for retail banking at Aite and one of the FICO Decisions Awards judges. “Swisscard has maximized its ROI by letting the call agents focus on the most promising accounts instead of just following a list approach. By doing so, they positively influenced the behavior of their customers while preserving relationships, both of which can be very difficult in the collections context.”