WHITEPAPER

    THE EVOLUTION OF DEBT PORTFOLIO SEGMENTATION

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    How an analytics-enabled strategy can elevate customer experience

     Executive summary

    In the past years, the one-size-fits-all approach has undeniably formed barriers to offering high-quality customer experiences in the debt collections sector. Therefore, financial institutions need to adapt their collections strategies to the changing market and customer demands.

    Segmentation of debt portfolios appears as one of the most effective ways to improve customer engagement significantly.

    In combination with unexpected external events, the evolving customer behaviour puts the onus on the financial organisations' functions to better target their customers and offer highly personalised experiences. The first step in providing a more tailored approach is understanding why a customer might become delinquent based on historical data.

    Customer segmentation can offer creditors different treatments according to different segments and needs. However, effective segmentation can be laborious when applied in practice due to the siloed information across several platforms and systems that creditors have at their disposal.

    The segmentation process and the criteria used by each business managing debt vary. But what is the most intelligent way for creditors to leverage data to cope with the challenge?

    Through our exclusive report, we shed light on the following: 

    • How can creditors achieve highly targeted segmentation in practice
    • Segmentation criteria and approaches to enhance financial institutions’ performance
    • How collection analytics blends in with modern technology
    • Practical examples used in the segmentation process for recovering NPL

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