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Optimization Software for Collections

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We recently worked with a leading auto lending company to set up FICO Xpress Optimization Suite for their collections needs. Historically, collections has been a very subjective business left in the hands of the individual collector. We’ve seen more analytics being used to pick the right action based on customer behavior and degree of delinquency. This latest trend is optimizing allocation of resources and the collections actions based on the latest information, costs and expected results. Here are some key take-aways from this interesting use case:

Industry: Auto Finance

Company: Leading auto finance company

Business Challenge: Improve long term collections performance by allocating accounts to collections strategies in the way that makes the best use of available resources.

How FICO Xpress Optimization Suite Helped:

  • Analyzes risk and delinquency behavioral patterns.
  • Uses mathematical optimization to minimize losses and control operating expenses.
  • Selects the right treatment for each stage of delinquency while using number of available resources as a constraint.
  • Optimally allocates collections resources over time (headcount, collections technology, etc)
  • Seamlessly incorporates a test-and-learn experimental design capability within the optimization process

Results: Xpress Optimization Suite will enable near real-time adjustments to the process by providing daily strategy re-optimizations and redeployment. In addition, the company will gain business insight into the various tradeoffs within the collections organization, enabling them to right-size their collections resources dynamically.

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