Collections; knowing what intervention really works when people don’t pay

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Fraudscreen's webcast on collections focusing on what interventions really works when people don’t pay. 15 minute seminar aimed at collections and recoveries specialists. Pitched at an expert level.

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Collections; knowing what intervention really works when people don’t pay

  1. 1. WEBCAST The Life-cycle of a Debtor: Collections: Knowing what intervention really works when people don’t pay
  2. 2. © 2009. Copyright Fraudscreen Ltd. The three stages of debt... Webcast: collections 2
  3. 3. © 2009. Copyright Fraudscreen Ltd. The three stages of debt... Paper one: Pre-delinquency Webcast: collections 2
  4. 4. © 2009. Copyright Fraudscreen Ltd. The three stages of debt... Paper one: Paper two: Pre-delinquency Collections Webcast: collections 2
  5. 5. © 2009. Copyright Fraudscreen Ltd. The three stages of debt... Paper one: Paper two: Paper three: Pre-delinquency Collections Recoveries Webcast: collections 2
  6. 6. © 2009. Copyright Fraudscreen Ltd. Introducing the speakers Webcast: collections 3
  7. 7. © 2009. Copyright Fraudscreen Ltd. Introducing the speakers John Sharman Sales & Marketing Director, Fraudscreen Webcast: collections 3
  8. 8. © 2009. Copyright Fraudscreen Ltd. Introducing the speakers John Sharman Peter Taylor Sales & Marketing Credit & Collections Director, Fraudscreen Director, Fraudscreen Webcast: collections 3
  9. 9. © 2009. Copyright Fraudscreen Ltd. Introducing the speakers John Sharman Peter Taylor Helen McNab Sales & Marketing Credit & Collections Director Director, Fraudscreen Director, Fraudscreen ScorePlus Webcast: collections 3
  10. 10. © 2009. Copyright Fraudscreen Ltd. Agenda FRAMEWORK PRE-DELINQUENCY COLLECTIONS RECOVERIES Objectives Helen Data & Analytics Helen Strategy Design Helen Operational Peter Design Strategy Delivery Strategy Peter Evaluation Budget Definition Peter Webcast: collections 4
  11. 11. © 2009. Copyright Fraudscreen Ltd. Agenda FRAMEWORK PRE-DELINQUENCY COLLECTIONS RECOVERIES Objectives Helen Data & Analytics Helen Strategy Design Helen Operational Peter Design Strategy Delivery Strategy Peter Evaluation Budget Definition Peter Webcast: collections 4
  12. 12. © 2009. Copyright Fraudscreen Ltd. Programme framework See: Part One, p.6 Webcast: collections 5
  13. 13. © 2009. Copyright Fraudscreen Ltd. Programme framework FRAMEWORK Objectives Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part One, p.6 Webcast: collections 5
  14. 14. © 2009. Copyright Fraudscreen Ltd. Programme framework FRAMEWORK Objectives Objectives Data & Analytics Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part One, p.6 Webcast: collections 6
  15. 15. © 2009. Copyright Fraudscreen Ltd. Programme framework FRAMEWORK Objectives Objectives Data & Analytics Data & Analytics Strategy Design Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part One, p.6 Webcast: collections 7
  16. 16. © 2009. Copyright Fraudscreen Ltd. Programme framework FRAMEWORK Objectives Objectives Data & Analytics Data & Analytics Strategy Design Design Operational Design Strategy Delivery Delivery Strategy Evaluation Budget Definition See: Part One, p.6 Webcast: collections 8
  17. 17. © 2009. Copyright Fraudscreen Ltd. Programme framework FRAMEWORK Objectives Objectives Data & Analytics Data & Analytics Strategy Design Evaluation Design Operational Design Strategy Delivery Delivery Strategy Evaluation Budget Definition See: Part One, p.6 Webcast: collections 9
  18. 18. © 2009. Copyright Fraudscreen Ltd. Programme framework FRAMEWORK Objectives Objectives Data & Analytics Data & Analytics Strategy Design Evaluation Design Operational Design Strategy Delivery Delivery Strategy Evaluation Budget Definition Budget See: Part One, p.6 Webcast: collections 10
  19. 19. © 2009. Copyright Fraudscreen Ltd. Agenda FRAMEWORK PRE-DELINQUENCY COLLECTIONS RECOVERIES Objectives Data & Analytics Strategy Design Helen Operational Design Strategy Delivery Strategy Peter Evaluation Budget Definition Webcast: collections 11
  20. 20. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Tell me more about strategy design FRAMEWORK Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition Webcast: collections 12
  21. 21. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Tell me more about strategy design FRAMEWORK Objectives You talk about a score being a sufficient statistic, what does that Data & Analytics mean in practice? Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition Webcast: collections 12
  22. 22. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition Webcast: collections 13
  23. 23. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • Key issue: complexity of strategies Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition Webcast: collections 13
  24. 24. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • Key issue: complexity of strategies Objectives small volume action groups (nodes) Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition Webcast: collections 13
  25. 25. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • Key issue: complexity of strategies Objectives small volume action groups (nodes) hard to justify Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition Webcast: collections 13
  26. 26. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • Key issue: complexity of strategies Objectives small volume action groups (nodes) hard to justify Data & Analytics hard to monitor and therefore refine strategies Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition Webcast: collections 13
  27. 27. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic Webcast: collections 14
  28. 28. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic Webcast: collections 14
  29. 29. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, pp.7-10 Webcast: collections
  30. 30. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • What is a score? Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, pp.7-10 Webcast: collections
  31. 31. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • What is a score? Objectives prediction of behaviour e.g. Data & Analytics - risk: probability of delinquency Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, pp.7-10 Webcast: collections
  32. 32. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • What is a score? Objectives prediction of behaviour e.g. Data & Analytics - risk: probability of delinquency - retention: probability of closure or inactive Strategy Design summary all our knowledge Operational Design - based on past experience Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, pp.7-10 Webcast: collections
  33. 33. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • What is a score? Objectives prediction of behaviour e.g. Data & Analytics - risk: probability of delinquency - retention: probability of closure or inactive Strategy Design summary all our knowledge Operational Design - based on past experience - function of input data Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, pp.7-10 Webcast: collections
  34. 34. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • What is a score? Objectives prediction of behaviour e.g. Data & Analytics - risk: probability of delinquency - retention: probability of closure or inactive Strategy Design summary all our knowledge Operational Design - based on past experience - function of input data Strategy Delivery - statistically balances predictive factors Strategy Evaluation Budget Definition See: Part Two, pp.7-10 Webcast: collections
  35. 35. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • What is a score? Objectives prediction of behaviour e.g. Data & Analytics - risk: probability of delinquency - retention: probability of closure or inactive Strategy Design summary all our knowledge Operational Design - based on past experience - function of input data Strategy Delivery - statistically balances predictive factors - nothing else can be added to improve our Strategy Evaluation understanding Budget Definition See: Part Two, pp.7-10 Webcast: collections
  36. 36. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • What is a score? Objectives prediction of behaviour e.g. Data & Analytics - risk: probability of delinquency - retention: probability of closure or inactive Strategy Design summary all our knowledge Operational Design - based on past experience - function of input data Strategy Delivery - statistically balances predictive factors - nothing else can be added to improve our Strategy Evaluation understanding Budget Definition See: Part Two, pp.7-10 Webcast: collections
  37. 37. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • What is a score? Objectives prediction of behaviour e.g. Data & Analytics - risk: probability of delinquency - retention: probability of closure or inactive Strategy Design summary all our knowledge Operational Design - based on past experience - function of input data Strategy Delivery - statistically balances predictive factors - nothing else can be added to improve our Strategy Evaluation understanding Budget Definition • BUT – scores do not make decisions See: Part Two, pp.7-10 Webcast: collections
  38. 38. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.7 Webcast: collections
  39. 39. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • Why is this important? Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.7 Webcast: collections
  40. 40. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • Why is this important? Objectives reduces dimensionality Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.7 Webcast: collections
  41. 41. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • Why is this important? Objectives reduces dimensionality simplifies decision-making Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.7 Webcast: collections
  42. 42. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • Why is this important? Objectives reduces dimensionality simplifies decision-making Data & Analytics simplicity works Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.7 Webcast: collections
  43. 43. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • Why is this important? Objectives reduces dimensionality simplifies decision-making Data & Analytics simplicity works Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.7 Webcast: collections
  44. 44. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • Why is this important? Objectives reduces dimensionality simplifies decision-making Data & Analytics simplicity works Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.7 Webcast: collections
  45. 45. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • Why is this important? Objectives reduces dimensionality simplifies decision-making Data & Analytics simplicity works Strategy Design Operational Design Scores Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.7 Webcast: collections
  46. 46. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS The sufficient statistic FRAMEWORK • Why is this important? Objectives reduces dimensionality simplifies decision-making Data & Analytics simplicity works Strategy Design Operational Design Scores Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.7 Webcast: collections
  47. 47. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Tell me more about strategy design FRAMEWORK Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition Webcast: collections 17
  48. 48. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Tell me more about strategy design FRAMEWORK Objectives What does a ‘marketing approach’ mean in relation to collections? Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition Webcast: collections 17
  49. 49. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, pp.6-7 Webcast: collections 18
  50. 50. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Key issue: understanding customer response Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, pp.6-7 Webcast: collections 18
  51. 51. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Key issue: understanding customer response Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Lender actions Strategy Evaluation Budget Definition See: Part Two, pp.6-7 Webcast: collections 18
  52. 52. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Key issue: understanding customer response Objectives Data & Analytics Customer Strategy Design response Operational Design Strategy Delivery Lender actions Strategy Evaluation Budget Definition See: Part Two, pp.6-7 Webcast: collections 18
  53. 53. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Key issue: understanding customer response Objectives Data & Analytics Customer Strategy Design response Operational Design Strategy Delivery Lender Analysis actions Strategy Evaluation Budget Definition See: Part Two, pp.6-7 Webcast: collections 18
  54. 54. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Key issue: understanding customer response Objectives Data & Analytics Customer Strategy Design response Operational Design Strategy Delivery Lender Analysis actions Strategy Evaluation Budget Definition Refinement See: Part Two, pp.6-7 Webcast: collections 18
  55. 55. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Key issue: understanding customer response Objectives Data & Analytics Customer Strategy Design response Operational Design Strategy Delivery Lender Analysis actions Strategy Evaluation Budget Definition Refinement See: Part Two, pp.6-7 Webcast: collections 18
  56. 56. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.6-7 Webcast: collections 19
  57. 57. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Possible solution: think as a marketer Objectives identify ‘the dream’ design the campaigns Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.6-7 Webcast: collections 19
  58. 58. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Possible solution: think as a marketer Objectives identify ‘the dream’ design the campaigns Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Prospects Cohorts Budget Definition See: Part Two, p.6-7 Webcast: collections 19
  59. 59. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Possible solution: think as a marketer Objectives identify ‘the dream’ design the campaigns Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Prospects Contact Cohorts Campaigns Budget Definition See: Part Two, p.6-7 Webcast: collections 19
  60. 60. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Possible solution: think as a marketer Objectives identify ‘the dream’ design the campaigns Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Prospects Contact Collection outcomes Cohorts Campaigns Response analysis Budget Definition See: Part Two, p.6-7 Webcast: collections 19
  61. 61. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.13 Webcast: collections 20
  62. 62. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Possible solution: think as a marketer Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.13 Webcast: collections 20
  63. 63. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Possible solution: think as a marketer Objectives understand cause and effect: measure collection outcome Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, p.13 Webcast: collections 20
  64. 64. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Possible solution: think as a marketer Objectives understand cause and effect: measure collection outcome Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Cured Budget Definition Into recoveries See: Part Two, p.13 Webcast: collections 20
  65. 65. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Taking a marketing approach FRAMEWORK • Possible solution: think as a marketer Objectives understand cause and effect: measure collection outcome Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Cured Budget Definition Into recoveries understand financial consequences: contribution & retention See: Part Two, p.13 Webcast: collections 20
  66. 66. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Tell me more about strategy evaluation FRAMEWORK Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition Webcast: collections 21
  67. 67. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Tell me more about strategy evaluation FRAMEWORK Objectives When it comes to evaluating a collections strategy, what key action Data & Analytics could people take immediately? Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition Webcast: collections 21
  68. 68. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Having a retention mind-set FRAMEWORK Objectives Data & Analytics Strategy Design Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, pp.15-16 Webcast: collections 22
  69. 69. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Having a retention mind-set FRAMEWORK • What do the incentives in your collections area say about Objectives your priorities? group or individual? Data & Analytics reward immediate payments, or sustained payment? encourage staff to share approaches that work best, or keep them as Strategy Design a closely guarded secret? Operational Design Strategy Delivery Strategy Evaluation Budget Definition See: Part Two, pp.15-16 Webcast: collections 22
  70. 70. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Having a retention mind-set FRAMEWORK • What do the incentives in your collections area say about Objectives your priorities? group or individual? Data & Analytics reward immediate payments, or sustained payment? encourage staff to share approaches that work best, or keep them as Strategy Design a closely guarded secret? • What is the role of the supervisor in collections? Operational Design ‣ model worker? ‣ trainer? Strategy Delivery ‣ evaluator of staff performance? ‣ what % of staff calls does the supervisor monitor? Strategy Evaluation Budget Definition See: Part Two, pp.15-16 Webcast: collections 22
  71. 71. © 2009. Copyright Fraudscreen Ltd. COLLECTIONS Having a retention mind-set FRAMEWORK • What do the incentives in your collections area say about Objectives your priorities? group or individual? Data & Analytics reward immediate payments, or sustained payment? encourage staff to share approaches that work best, or keep them as Strategy Design a closely guarded secret? • What is the role of the supervisor in collections? Operational Design ‣ model worker? ‣ trainer? Strategy Delivery ‣ evaluator of staff performance? ‣ what % of staff calls does the supervisor monitor? Strategy Evaluation • What do your customers think of the collections process? ‣ do you ask customers who have been in collections what they thought Budget Definition of it? ‣ how do you measure retention? See: Part Two, pp.15-16 Webcast: collections 22
  72. 72. © 2009. Copyright Fraudscreen Ltd. Find out more… www.fraudscreen.co.uk/lifecycle-part-two Paper one: Paper three: Pre-delinquency Recoveries Paper two: Collections Webcast: collections 23

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