Analytics For Cash Advance Industry - Marketelligent


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Analytics for Cash advance or Payday lending industry. By Marketelligent

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Analytics For Cash Advance Industry - Marketelligent

  1. 1. • Profit-based Customer Acquisition Strategy • Revenue Scorecards; eg Total 180 days revenue • Campaign Management • Cross-sell Scorecards • Re-activation scorecards • Lead Optimization • Credit Delinquency Scorecards, eg. First Pay Default (FPD); Nth cycle default, etc • Customer Approval and Conversion Scorecards • Optimal Loan Amount, Pricing and loan duration • Portfolio Loss Forecasting • Collections Analytics • Fraud Analytics Credit Risk Analytics Marketing Analytics Analytics that impact all dimensions of the portfolio P&L Revenue Scorecard Using bureau and application data, this score predicts customer level revenue over a period of 180 days. This score helps in identifying potentially high revenue customers Reactivation Scorecard Identify customers who have higher tendency to reactivate without defaulting. Since repeat Customers contribute a major proportion of profits, it becomes a prerogative to identify them at application level First Pay Default (FPD) Scorecard Leverage FPD score in identifying customers who have a high likelihood of defaulting in first cycle of their loan. This score helps in maintaining a stable portfolio 4th or 5th cycle Risk Scorecard Identify customers who have high probability to continue to longer cycles without default. It helps in improving the overall loan profitability from a customer without going bad Approval Scorecard Using customers application data (like age, employment etc) application approval score is developed with risk or revenue as the underlying decision factor Conversion Scorecard Using customers application data (like age, employment etc) conversion score is developed with conversion of lead to loan as the underlying decision factor Application Risk Revenue CASH ADVANCE ANALYTICS Marketelligent is in the business of providing analytic services that help you make smarter business decisions. With deep expertise in Credit Risk and Marketing across Cash Advance Products (Payday Lending), we offer an affordable global delivery model leveraging the best of domain expertise and analytic capabilities.
  2. 2. CONTACT MARKETELLIGENT, INC. 80 Broad Street, 5th Floor, New York, NY 10004 1.212.837.7827 (o) 1.208.439.5551 (fax) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 1 2 3 4 5 6 7 8 9 10 Random New Model Existing Model CumulativeDefaultRate Scorecard Deciles PREDICT USING SCORECARDS Design, develop and implement predictive scorecards across functions : approvals, delinquencies, collections, etc Forecast portfolio performance so as to take proactive underwriting and investment optimization decisions today. MAXIMIZE COLLECTIONS Collectability Scorecard Placement Balance (Amount the account entered Collections with) Required Effort (Efforts required to collect past dues) Develop & implement holistic strategies to collect efficiently; thereby reducing cost/dollar collected UNDERWRITE PROFITABLY Make Underwriting decisions based on expected Customer lifetime profitability ANALYTICS FOR THE CASH ADVANCE INDUSTRY 10% 11% 12% 13% 14% 15% 16% 17% 18% Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 FirstPayDefaultRate FORECAST PORTFOLIO PERFORMANCE Approval Score Conversion Score 180 day Revenues Reactivation Score Acquisition FPD Score 5+ cycle Risk Score Risk Revenue Profit-based Underwriting Christmas Effect ! Worst months for lending