European Motor Finance Company Collections Success Story

© 2015 Fair Isaac Corporation. All rights reserved. 1

Asset finance company implements

customer-powered collectionsClient: European motor finance company

Challenge: Build mutually beneficial connections and relationships with delinquent customers

Solution: Improved customer communication processes and workflows, supported by FICO® Customer Communication Services and an internal online payment website

Results:

• Double-digit increase in average amount paid per plan

• Substantial increase of customers making payments

• Double-digit increase in a six-month period of customers making payments on a site redesigned for mobile payments

• Improved collector motivation and retention

Collections success depends on the ability to contact and connect with delinquent customers and establish a productive dialogue. A European motor finance leader realized that standard operating procedures — auto dialers, one-way communications, demands for payment — weren’t going to help improve its vehicle finance collections portfolio.

The company sought to initiate more direct customer dialogue to determine a realistic payment arrangement after carefully assessing each customer’s

CUSTOMER COMMUNICATIONSAsset finance company implements customer-powered collections

Customers are now empowered to “self serve” and manage their account via a channel and a time of their choosing.

* This case study is based on information from a FICO client that requested anonymity.

25% increase in amount paid per plan

9% increase insuccessful arrangements

Improvedcustomer experience

CUSTOMER COMMUNICATIONSAsset finance company implements customer-powered collections

© 2015 Fair Isaac Corporation. All rights reserved. 2

personal financial circumstances. They also wanted to deploy SMS messaging and online payment options based on specific customer preferences.

Working with FICO, and after implementing FICO® Customer Communication Services, the company’s payment arrangement program and SMS-contact with customers generated a 25% increase in the average amount paid per plan, and a 9% increase in the percentage of successful arrangements, while also improving and simplifying the customer experience.

Building Goodwill The success of the program was built on the collection team’s efforts to immediately establish trust and goodwill by having frank customer discussions in setting payment arrangements. This included using expertly guided customer dialogues in order to negotiate payment solutions, driven by non-judgmental questioning and listening techniques that are designed to put customers at ease, and set a framework for better outcomes. As agents are also taught to use new skills and build on existing strengths, their motivation and job satisfaction has increased, while turnover is decreasing.

Backing Goodwill with TechnologyBuilding on the initial conversation in setting the payment arrangement, the company can monitor the agreed-upon arrangement, and have productive communications with delinquent customers before, on, and after a payment due date.

FICO® Customer Communication Services powers these conversations by engaging customers via their preferred channel — mobile applications, voice, SMS, web or email. It helps improve the customer experience by tailoring strategies based on broad and complex data. Available on-premises or via the cloud, it replaces reliance on expensive, non-scalable call-center interactions with a highly empirical, automated approach to shaping targeted action and resolution strategies.

Reminders Two Days Prior to Payment:

Using the FICO solution, the company sends customers an automated SMS reminder two days before payment is due. The text message directs the customer to a website, where they are able to pay 24 hours a day, 7 days a week.

This approach reduces the number of non-value added calls, where customers

typically call to make their agreed payment. By reminding customers of a payment due using text messages, and giving them an option to pay online, the company has seen fewer arrangement failures from customers who forget to make a payment.

Reminders on the Payment Due Date:

Customers who have not paid on the day the payment is due receive an SMS that includes the option for the customer to reply “Yes” and receive an immediate call back from the agent to discuss the payment.

Also, the customer can choose to respond to the text immediately, or at a time that better suits their schedule, including outside normal office hours. Once a “Yes” reply has been received, an agent calls the customer using the FICO system’s outbound voice application; or the customer can be directed via text to pay using the autopay functionality.

FICO is a trademark or registered trademark of Fair Isaac Corporation in the United States and in other countries. Other product and company names herein may be trademarks of their respective owners. © 2015 Fair Isaac Corporation. All rights reserved. 4075CS_EN 06/15 PDF

NORTH AMERICA +1 888 342 6336 [email protected]

FOR MORE INFORMATION www.fico.com www.fico.com/en/blogs

LATIN AMERICA & CARIBBEAN +55 11 5189 8267 [email protected]

EUROPE, MIDDLE EAST & AFRICA +44 (0) 207 940 8718 [email protected]

ASIA PACIFIC +65 6422 7700 [email protected]

Reminders Two Days After the Payment Due Date:

The company can queue accounts by scoring customer risk. When a payment has not been received from a customer two days following a due date, the FICO solution automatically sends a text reminder to the customer. Depending on the customer’s risk level, and whether the FICO solution scored the customer as low, medium or high risk, the text message will inform the customer of a grace period of between two and 10 days. In addition, a text message can inform customers that they can avoid

paying a collection fee if they make a timely payment via the company’s website.

Customers are now empowered to “self serve” and manage their account via a channel and a time of their choosing, which boosts collections by giving customers a multi-channel capability to make payments 24/7. Customers who respond to the interactive SMS are more likely to resolve since the contact is triggered at the customer’s convenience, and as a result the overall percentage of customers making payments has increased substantially.

The company is currently implementing continuous payment authority for customers’ arrangement to pay. When advisors set up a new arrangement to pay agreement with a customer, they can offer the option for customers to have payments taken automatically on a monthly basis with a nominated card.

For more information, visit us on the web at:

www.fico.com/ccs

CUSTOMER COMMUNICATIONSAsset finance company implements customer-powered collections