the biggest impact of artificial intelligence will be
the ability to better optimize collection decisions
SINGAPORE — April 12, 2018
46 percent of banks in Asia Pacific plan to implement artificial intelligence in their
collections process this year; while 24
percent indicated they will do so next year, according to a FICO survey
expect AI to impact their ability to optimize
collection decisions and predict consumer behavior
Automated collections is preferred by both banks and
thirds of banks who have employed automated collections to contact
customers have indicated it leads to faster
More information: http://www.fico.com/en/products/fico-customer-communication-services
Artificial intelligence (AI) is becoming more integral in
improving collections, according to banks in Asia Pacific (APAC). In a survey conducted at the FutureCollect
event in March, seven out of ten senior collections managers revealed they
plan to implement and integrate AI into
their collections systems within the next two years, and 24 percent said
they will do it next year.
These new findings are consistent with FICO's insights
on AI earlier this year, predicting companies will focus on operationalizing AI in 2018. Almost half
(48 percent) of banks believe that the use of AI will help
them optimize their collection decisions, while 41 percent feel it will enable
them to accurately predict consumer behavior.
AI-powered analytics can improve automation in collections
in many areas, from optimizing contact strategy settings to ensuring human
agents make sophisticated decisions when restructuring debts or even
calculating provision rates at an account level for IFRS 9 compliance.
"AI is in the spotlight within the boardroom of most
banks," said Dan McConaghy, president
for FICO Asia Pacific. "Lenders understand that they need the tools that
allow them to stop relying on gut-feel decisions or out-of-date models, and collections
is a key area where AI has the potential to improve business decisions as well
as the customer experience."
AI enhancements for the FICO® Customer Communication Services (CCS) solution are being
rolled out this year, and will further lift the significant impact that
automation continues to deliver.
Two thirds of banks that have employed automated
collections to contact customers have indicated it leads to faster bill
payment. Respondents said the time taken to collect payments was reduced by
anywhere from two days to two weeks.
In addition, 81 percent of respondents believe automated collections leads
to higher customer satisfaction. Avoiding
the embarrassment of dealing with a person was seen as the key reason
(52%), with the convenience of being
contacted proactively coming second (31%) and a reminder when they have forgotten a bill coming third (29%)
When it came to the 60
days past due segment, 49 percent of
banks said this group of customers had grown the most. This was marginally higher
than 41 percent of banks who saw this grow in 2016.
"We believe that Customer Communication Services has a lot
to offer late-stage collections," said
McConaghy. "Automated collections helps to reduce the number of customers
that end up in these late stages through early intervention with early contact
strategies that work. Now with the addition of AI, we are also seeing
significant improvements in minimizing roll rates across credit card
"When customers move past the 90 days bucket, our AI is
able to arm highly skilled agents with options to make more sophisticated
decisions when restructuring payments for this group. This means customers are
more likely to repay and remain customers, while still giving the organization
the benefit of making a profit on the offer made."
Further AI modules, to be added to CCS in the second half
of 2018, will see even more benefits delivered for contact strategies, next
best action, treatment optimization and more.
The survey was conducted at the recent FICO® FutureCollect 2018 event in Tokyo, Japan, which was attended by 53 representatives from banks and financial institutions across Asia
Pacific & Japan.
FICO (NYSE: FICO)
powers decisions that help people and businesses around the world prosper.
Founded in 1956 and based in Silicon Valley, the company is a pioneer in the
use of predictive analytics and data science to improve operational decisions.
FICO holds more than 185 US and foreign patents on technologies that increase
profitability, customer satisfaction and growth for businesses in financial
services, manufacturing, telecommunications, health care, retail and many other
industries. Using FICO solutions, businesses in more than 100 countries do
everything from protecting 2.6 billion payment cards from fraud, to helping
people get credit, to ensuring that millions of airplanes and rental cars are
in the right place at the right time.
Learn more at www.fico.com.
Join the conversation on Twitter at @FICOnews_APAC.
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