Transcript Title of Presentation
The Role of Technology in Compliant Collections
Improving Business Controls, Service Quality and Cost Effectiveness
David Lightfoot
Product Management Vice President FICO
Ed Broyles
Global Channels FICO © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.
What We Aim to Show You Today
Through appropriate use of analytics and technology for data management and automation,
regulation
can be leveraged to profitably build competitive advantage in the Collection & Recovery space for both
first
and
third party
collectors.
2 © 2014 Fair Isaac Corporation. Confidential.
Agenda
► Regulatory Landscape ► What’s at Stake?
► How Can Technology Help?
3 © 2014 Fair Isaac Corporation. Confidential.
Current Regulatory Landscape
Getting Hit From All Sides
► Federal ► Prudential Bank Regulators ► CFPB, FCA ► FTC and FCC ► Joint Enforcement ► States ► Courts ► Industry 4 © 2014 Fair Isaac Corporation. Confidential.
5
Future Forecast
More Regulatory Reform on Its Way FDCPA Update —third parties New federal rules —first parties Medical Collections Scrutiny Additional state reforms
How to Respond?
► Not just about the treatment of the consumer ► Focus areas include: ► Infrastructure ► Internal controls ► Audit ► Reporting
Operational and Conduct Risk Across the Supply Chain
Risk
Vendors Processors First Parties OCAs and Debt Buyers Consumers 6 © 2014 Fair Isaac Corporation. Confidential.
What’s at Stake?
► Regardless of interpretation, additional work is required ► Compliance and Legal staff ► Internal Audit and external Audit of 3 rd Parties ► Data Cleansing and Segmentation ► Collector Productivity The problem demands agility and reducing legacy costs to support the new costs of compliance Technology can provide a solution — Data Management, Analytics and Automation 7 © 2014 Fair Isaac Corporation. Confidential.
Compliance Is Easy…
…All you need is unlimited: ► Lead Time ► Money ► Legal, Compliance, Collector and Technology resources….
8 © 2014 Fair Isaac Corporation. Confidential.
How Technology Can Help: Productivity, Consistency and Transparency SCORES Improve understanding of who can afford to pay
► 15 –20% improvement in strategy effectiveness
MODELS
•
Who will pay?
•
How much?
•
When?
► 15 –30% reduction in bad debt
OPTIMIZATION Increase likelihood of payment?
► Reduced cycle 1-write-off roll rate 10% ► 3-year ROI of 24:1
MODEL MANAGEMENT Ensure models used to determine risk and other outcomes are appropriately governed SPEECH ANALYTICS
•
What to say
•
Confirm compliance
•
100% coverage
► $22,000 additional revenue per agent •
CUSTOMER COMMUNICATION SERVICES Contact the right customer
•
Keep good customers.
•
Measure Performance.
Make it easy to pay
•
Automate actions
•
Allocate resources most effectively.
•
Measure and ensure performance.
• What actions.
• When.
• Know what’s working.
COLLECTIONS CASE MANAGEMENT
•
Reconcile financials
•
Record & report on all activity
• • • • • What work queues.
Which Collector.
How many cases.
When.
For how long.
• Collect in-house.
• Place outside.
• Sell ► 15 –20% agent productivity improvement. 40% increase in daily processing volume ► 30% decrease in average account process time
Frequency Timing
@
Channel
► 30% reduction in closing balances vs. offshore call center resources ► 18% improvement in average remittance ► 69% of inbound calls managed without agent intervention ► Dramatic improvements in customer satisfaction
ADVANCED AGENCY MANAGEMENT
•
Manage and optimize relationships with agency/vendor
•
Who to place with. For how long. At what price.
•
Ensure Compliance. Measure Performance ADAPTIVE CONTROL
•
Who to collect on and who to leave alone.
•
Actions consistently applied.
•
Improve without risk. Keep good customers
► 20% decrease in bad debt. ► 60% reduction in loan loss provisions
DATA MANAGEMENT
•
Make needed information available.
•
Determine what information is useful.
COMMUNICATIONS NETWORK Give/get information quickly and securely
► Upfront savings: $400k – $700k vs. in-house build ► Ongoing savings: 7:1 ROI or more ► 30% increase in recovery amount. 40% decrease in costs 9 © 2014 Fair Isaac Corporation. Confidential.
Audit Template Compliance Framework Compliance Rules Compliance Queues Compliance Pop-ups Contact Reports Historical Events
10 © 2014 Fair Isaac Corporation. Confidential.
100% Speech Analytics Coverage Virtual Agents, Internal Agents and External Agents
Email MobileDirect Text Voice Online Social Media
11 © 2014 Fair Isaac Corporation. Confidential.
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Summary
► Automation is key to productivity, consistency, transparency and cost containment ► Execute on the “new basics”—comprehensive data capture and analyses, analytically-driven actions, rules-based treatment and collector activity control, 100% coverage of voice interactions, virtual agents, consumer education ► Cloud services offer easy access to compliance support technologies ► Addressed carefully, regulation can be leveraged to profitably build competitive advantage in the Collection & Recovery space for both First and Third Party collectors
Thank You!
David Lightfoot
415.446.6332
Ed Broyles
704.375.0266
13 © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.
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► www.fico.com/blog 14 © 2014 Fair Isaac Corporation. Confidential.
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David Lightfoot
Ed Broyles
15 © 2014 Fair Isaac Corporation. Confidential.