Enhancing Recovery Rates with Dynamic Scoring Models
Client Overview: A leading financial services company facing challenges with stagnant recovery rates and inefficient collection processes.
Objective: To improve recovery rates and increase overall collections by implementing advanced analytics and dynamic scoring models.
Challenges
Existing scoring models applied only on Day 1 of the account placement cycle of 120-180 days, leading to static and outdated scores.
Static and constant scoring resulting in similar inflexible account treatment and penetration.
Suboptimal collection efforts resulting in missed opportunities for effective collections.
Solution:
ROS Solutions introduced a dynamic scoring model that recalculates account scores daily. This innovative approach leverages additional operational variables, such as call results and outcomes from letter or digital campaigns, which were previously unavailable at the time of initial placement. The model uses an ROI concept to assess the value of each incremental call, degrading scores for accounts with unsuccessful contact attempts, thus optimizing the collection strategy.
Implementation:
Data Integration:
- Collected real-time operational data including call outcomes and campaign responses.
- Integrated these variables into the dynamic scoring model to provide up-to-date scores each day.
Dynamic Scoring Model:
- Developed a scoring algorithm that recalculates scores daily based on new data inputs from prior attempts.
- Implemented an ROI-based approach to prioritize accounts with higher chances of successful recovery.
Operational Changes:
- Adjusted collection strategies based on dynamic scores, focusing efforts on accounts with the highest potential for recovery.
- Reduced effort on accounts with diminishing returns, optimizing resource allocation.
Results:
- Increased Recovery Rates: Achieved over a 10% average increase in recovery rates.
- ~5% increase in early-stage collections.
- Up to 15% increase in late-stage collections.
- Incremental Collections: Contributed over $6 million in additional collections.
- Optimized Collection Efforts: More efficient use of resources by focusing on high-potential accounts, reducing wasted efforts on low-potential accounts.
Client Testimonial:
“Implementing ROS Solutions’ dynamic scoring model has transformed our collection process. We’ve seen a significant boost in our recovery rates and a notable increase in our overall collections. The ability to recalibrate account scores daily has allowed us to make more informed decisions and allocate our resources more effectively.” – Collections Manager, Financial Services Company
Conclusion:
By leveraging advanced analytics and dynamic scoring models, ROS Solutions enabled the client to enhance their collection strategies, leading to substantial improvements in recovery rates and overall collections. This case study demonstrates the power of real-time data integration and strategic resource allocation in driving successful financial outcomes.
Call to Action:
Discover how ROS Solutions can help your business achieve similar results. Contact us today to learn more about our dynamic scoring models and other innovative solutions designed to optimize your operations and enhance efficiency.