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.
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© 2014 Fair Isaac Corporation. Confidential.
Agenda
►Regulatory
►What’s
►How
3
Landscape
at Stake?
Can Technology Help?
© 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
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© 2014 Fair Isaac Corporation. Confidential.
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
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© 2014 Fair Isaac Corporation. Confidential.
Operational and Conduct Risk Across the Supply Chain
Risk
Vendors
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© 2014 Fair Isaac Corporation. Confidential.
Processors
First Parties
OCAs and
Debt Buyers
Consumers
What’s at Stake?
► Regardless
of interpretation, additional work is required
► Compliance
and Legal staff
► Internal Audit and external Audit of 3rd 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
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© 2014 Fair Isaac Corporation. Confidential.
Compliance Is Easy…
…All you need is unlimited:
► Lead
Time
► Money
► Legal,
Compliance, Collector and
Technology resources….
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© 2014 Fair Isaac Corporation. Confidential.
How Technology Can Help: Productivity, Consistency and Transparency
MODELS
SCORES
Improve understanding of
who can afford to pay
OPTIMIZATION
• Who will pay?
• How much?
• When?
► 15–20%
improvement in
strategy effectiveness
► 15–30%
reduction
in bad debt
Increase likelihood
of payment?
► Reduced
► 3-year
cycle 1-write-off roll rate 10%
ROI of 24:1
MODEL MANAGEMENT
Ensure models used to
determine risk and other
outcomes are appropriately
governed
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.
reduction in loan loss
provisions
► 60%
Make it
easy to
pay
SPEECH
ANALYTICS
• What to say
• Confirm compliance
• 100% coverage
COLLECTIONS CASE MANAGEMENT
• Automate actions
• Allocate resources most effectively.
• Measure and ensure performance.
► $22,000
additional
revenue per agent
CUSTOMER
COMMUNICATION SERVICES
• Contact the right customer
• Keep good customers.
• Measure Performance.
@
Frequency
Timing
•
•
•
•
•
• What actions.
• When.
• Know what’s
working.
What work queues.
Which Collector.
How many cases.
When.
For how long.
• Collect in-house.
• Place outside.
• Sell
► 15–20%
► 30%
agent productivity improvement. 40% increase in daily processing volume
decrease in average account process time
Channel
reduction in closing balances vs. offshore call center resources
improvement in average remittance
► 69% of inbound calls managed without agent intervention
► Dramatic improvements in customer satisfaction
► 18%
• Manage and optimize relationships with agency/vendor
• Who to place with. For how long. At what price.
• Ensure Compliance. Measure Performance
► 30%
© 2014 Fair Isaac Corporation. Confidential.
DATA
MANAGEMENT
• Make needed information
available.
• Determine what
information is useful.
COMMUNICATIONS
NETWORK
Give/get information
quickly and securely
► Upfront
ADVANCED AGENCY MANAGEMENT
► 30%
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• Reconcile financials
• Record & report on all
activity
increase in recovery amount. 40% decrease in costs
savings: $400k–
$700k vs. in-house build
► Ongoing savings: 7:1 ROI
or more
Audit Template
Compliance Framework
Compliance Rules
Compliance Queues
Compliance Pop-ups
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© 2014 Fair Isaac Corporation. Confidential.
Contact Reports
Historical Events
100% Speech Analytics Coverage
Virtual Agents, Internal Agents and
External Agents
Text
Voice
Email
MobileDirect
Online
Social
Media
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© 2014 Fair Isaac Corporation. Confidential.
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
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© 2014 Fair Isaac Corporation. Confidential.
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Thank You!
David Lightfoot
DLightfoot@fico.com
415.446.6332
Ed Broyles
EdBroyles@fico.com
704.375.0266
© 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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© 2014 Fair Isaac Corporation. Confidential.
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David Lightfoot
DLightfoot@fico.com
15
© 2014 Fair Isaac Corporation. Confidential.
Ed Broyles
EdBroyles@fico.com