FICO® Collection Optimization

Enhance collector performance and improve roll rates while balancing capacity and expenses.

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Overview

From pre-delinquency and early stage collections through later stage and recovery

 

FICO Collections Optimization delivers more than a strategy: it also provides insights based on multiple “what if scenarios” that seek to balance tradeoffs between goals and constraints, such as charge-off losses and resources. It helps you strike the right balance between loss reduction, resource challenges, and operational constraints to address increasing concerns over maximizing profitability and managing customer satisfaction.

  • Simulate strategy impacts

  • Easily update strategies

  • Adjust policies

  • Propel recovery rates

  • Drive stronger customer connectivity

  • Decision Modeling

    Evaluate and monitor C&R KPIs, build a graphical model for one or more decisions, and establish mathematical relationships within key variables.

  • Decision Optimization

    Solve for profit-improvement strategies within specified constraints explore tradeoffs between conflicting goals and stress-test results.

  • Scenario Analysis

    Analyze large quantities of key constraints to evaluate alternatives, explore the range of what’s possible, and analyze operational impact.

  • Decision Deployment

    Incorporate optimized strategies and processing solutions, manage and track strategies to respond to market demands and changes, and execute consistent decisions every day, week, month, or on any schedule you select.

Success Story: How one large European financial institution improved performance of early stage collections strategies on unsecured portfolios and reduced roll rates without increasing expenses or headcount

3
%
3-month KPI: Bucket 1-Bucket 2 roll-rate reduction
10
%
6-month KPI: Bucket 1-Write-off roll-rate reduction
24
:1
3-year ROI expected

Address key collection and recovery objectives through an optimized strategy

FICO offers a range of solutions and services to align with the specific needs of every organization, including quick-start projects for early stage collections, and customized optimization solutions that consider myriad business goals, constraints, portfolios, and other considerations. The solution’s scalability to multiple environments and industries makes it ideal for piloting in one area (e.g., collector productivity) and then deploying more broadly to address multiple objectives.
Empowers users to quantify the impact of an organization’s business decisions and actions on customer outcomes such as revenue, loss, and profit. These action/reaction relationships can be informed by empirical testing, multiple sources of data, and expert feedback — from your internal C&R collectors and managers, as well as FICO analytic and business consulting experts.
For example, the analytics may determine that one scenario retains profitability per account and decreases expense by 6%, while the second scenario increases profitability by $10 per account, without incurring additional expense. By running multiple scenarios with different constraints specified, an efficient frontier is created. This efficient frontier sheds light on the range of possible outcomes, allowing portfolio managers to make an informed decision on the preferred operating point for the business given the current environment.
Once customer reactions to different actions are modeled, the algorithms simultaneously apply all possible actions against constraints to determine outcomes. This step allows users to stress-test results and determine which strategies should be candidates for scenario analysis.
By adding optimized strategies into core processing solutions, users manage and maintain the decisioning strategies to efficiently respond to market demands and changes. Optimized treatments can be converted into decision trees and loaded into a collection system (such as FICO® Debt Manager™) in order to execute consistent decisions every month, week, day, or any selected schedule. Datasets with optimized treatments can also be loaded directly into the collection system if optimization is run on a regular basis.
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The Digital-First Collections Strategy Imperative – McKinsey & FICO

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Enhance collector performance by putting the right resources to the right accounts.

Level up your efforts with sophisticated, patented mathematical techniques that calculate the optimal actions to take among many choices, given business goals and constraints.

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