Default analytics can be your most important tool (or skill-set). As job loss remains high and forbearance and unemployment stimulus programs end, many borrowers are facing considerable financial stress.
Accordingly, financial institutions have proactively increased loan loss reserves, reduced exposure in open-to-buy, and are re-prioritizing their focus on default operations in preparation for increased credit losses.
Today, default leaders are trying to leverage a modernized set of analytics tools to improve the precision around customer treatment, contact strategies, and account-specific offers.
Rather than recreate the wheel, here is a practical approach to turning analytics into your critical differentiator.
Based on the customer information you’ve assembled, restructure digital experiences and non-digital interactions to provide potential programs and/or assistance. Offering options pre-delinquency helps customers maintain financial footing and mitigates larger losses down the line – while fostering a level of trust.
Right now, customers want to receive information on any benefits, programs, or updates about their financial health.
Reach out to the customers with an identified risk and provide a clickable link for access to the offers, programs, and services available to them. Be prepared to share content that is relevant to their circumstance and make it easy to engage in a “digital conversion.”
If digital doesn’t work, examine the population’s digital engagement actions to understand channel preference and usage.
Obtain and analyze channel usage data to create an effective contact strategy and reduce time wasted on missed contacts. Bridgeforce recently shared ways to “use the analytics you have” for customer channels to improve contact accessibility.
Using deposit data to detect pre-delinquency accounts and determine best paths forward can lead to a reduced workload for default departments.
However, transforming raw data into usable data can take significant time, so you will want to start early. The business, IT, and data science teams will need to work together in order to execute successfully and we know how hard this can be.
Accessing your default analytics can be both resource- and time-intensive.
Here’s the best way to get started:
We know it is a lot, because we’ve completed this work from start to finish with our clients.
Bridgeforce has the experience and expertise to rapidly convert your data into your greatest differentiator. Through Data Solutions and our Consulting team, we have analyzed hundreds of millions of accounts. Reach out to discuss how your business can use analytics to prepare for increased delinquency and loss volumes.
[Editor’s note: this article was written by Michael Orefice, former IT Director at Bridgeforce]