Auto finance arm of Lloyds Banking Group uses interactive texts to help borrowers resolve late payments and overdue debt
LONDON — December 19, 2013 — FICO (NYSE:FICO), a leading predictive analytics and decision management software company, today announced that Black Horse, part of the Lloyds Banking Group, has received a 2013 Financial World Innovation Award for Most Innovative Application of Technology, based on an application developed using FICO technology. The combination of interactive SMS texts and automated payment capture allows Black Horse customers to pay overdue debts easily. This approach has increased the amount paid per plan by 25 percent, and the number of successful payment arrangements with overdue customers by 9 percent, while simplifying the customer experience.
“Our innovative approach means we can collect payments in arrears anytime,” said David Morpeth, Operations Director of Black Horse, which helps more than 200,000 UK customers every year to finance new and used cars, caravans, motorhomes or motorbikes. “With this application, we’ve made it much easier for our customers to resolve outstanding debt.”
The first step in making payment plans is a call from a Black Horse advisor. “Arrangements to pay that are made without fully understanding the customer’s commitments or circumstances are often unrealistic, and therefore likely to fail,” said Morpeth. “Our ’Straight Talking’ dialogue initiative focuses on building trust and increasing customer care through enhanced questioning and listening techniques. Our advisors use this approach to reach a resolution for the customer that enables them to bring their accounts up to date.”
Once the payment plan is arranged, Black Horse uses the Arrange-to-Pay application, based on FICO® Customer Communication Services, to automatically manage collections contacts in a phased approach. Two days before payment is due, an SMS reminder is automatically sent to the customer. The text directs the customer to the Black Horse Make a Payment / Manage My Account website, where payments can be made 24/7, including the option of using a card — a feature that very few finance companies offer to their overdue customers. Using this approach, Black Horse has reduced the number of calls to its Contact Centre, as well as reducing the percentage of arrangements that fail because the customer forgets to pay.
Customers who have not paid by the due date receive a SMS via FICO. The interactive SMS message includes the option for the customer to request an immediate call back. FICO’s outbound voice application then helps the customer make a payment using an Autopay facility.
“Customers who responded to the interactive SMS are more likely to resolve, as the call is triggered at the customer’s convenience,” said Gabriel Hopkins, who manages FICO Customer Communication Services. “The percentage of customers making payments as a result of being contacted by text has tripled, as has the amount collected per month through this channel.”
If payment has not been received two days after the deadline, a reminder text is sent to the customer. Customers are scored for risk, and based on their risk level may receive a grace period of 2 to 10 days.
Knowing customers are increasingly using their smartphones and tablets to access the internet, Black Horse redesigned its Make a Payment/Manage My Account website to optimize it for mobile payments. Visits to the site from a mobile device increased by 19 percent from January 2012 to June 2013, and have continued to increase each month since.
Black Horse is now in the process of implementing a continuous payment authority for arrangement to pay, which will enable its advisors to set customers up with a new arrangement to pay using payments automatically taken from a nominated card.
“Black Horse is using technology to make life easier for clients who are having credit problems,” said Hayley Kershaw, managing director for FICO in Europe, the Middle East and Africa. “Their work demonstrates the new focus on the customer experience that is taking place in debt collection. FICO congratulates Black Horse and Lloyds Banking Group on this important award.”
For the last 15 years, the Financial World Innovation Awards have recognized innovative initiatives that demonstrate excellence, inspiration and creativity in the financial services industry.
FICO (NYSE: FICO), formerly known as Fair Isaac, is a leading analytics software company, helping businesses in 80+ countries make better decisions that drive higher levels of growth, profitability and customer satisfaction. The company’s groundbreaking use of Big Data and mathematical algorithms to predict consumer behavior has transformed entire industries. FICO provides analytics software and tools used across multiple industries to manage risk, fight fraud, build more profitable customer relationships, optimize operations and meet strict government regulations. Many of our products reach industry-wide adoption. These include the FICO® Score, the standard measure of consumer credit risk in the United States. FICO solutions leverage open-source standards and cloud computing to maximize flexibility, speed deployment and reduce costs. The company also helps millions of people manage their personal credit health.
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