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Reduce your exposure. Increase the intelligence of your risk management.

How analytics and modeling can improve performance

Thursday February 14, 2019

 
The ever-increasing flow of data generated inside and outside a company, can be overwhelming for many organizations. However, advanced analytics can generate insights from this data that can lead to competitive advantage. Predictive analytics and modeling can help your accounts receivables department or outsourced collections agency increase cash flow by prioritizing which customers to contact and when to contact them, as well as which method of contact is likely to receive the best results.
 
SCORE provides modeling and analytics in order to help companies increase efficiency and maximize returns through targeted collection activities. These technologies allow statistical analysis of a company’s historical accounts receivables data, as well the analysis of external sources to determine collection risk – the probability that it will become past-due at some point in the future.
 
Utilizing credit bureau data, SCORE’s models help organizations manage risk by predicting which accounts at various stages of delinquency will cure or demonstrate high probability of payment. Once these accounts are determined, we can recommend cost-effective collection strategies to reduce the number of contact attempts.However, as consumer debt accumulates globally, more accounts require collections than ever before.
 
This results in collectors facing increased competition for dwindling financial resources. SCORE’s predictive analytics solutions allocate a collection risk score to every customer, then use this score to prioritize collections and methods of engagement. These solutions can identify subtle changes in customer’s payment behaviour that can lead to a higher collection risk.
 
The difference between our models and traditional credit bureau or behavioral scores?

Instead of using 90 plus days past due dependent variable over 12 to 24 months, we predict the likelihood of an account curing within 90 days, so a score of 450 represents 45% probability of an account curing in the next three months. This short performance window allows reduced exposure throughout the credit lifecycle – from the initial granting of credit to accounts management to distressed debt sales.
 
Simply put, our models are more accurate with less risk. We regularly revalidate our models to ensure accuracy and relevance, while offering custom modeling as required. Selective scoring is another solution SCORE has designed for larger portfolios. It is a cost effective tool that can be easily integrated into strategy, as it is customizable down to the specific scoring model (30, 90, 180 or 360 Days Delinquent).

The portfolio is divided into segments according to probability of recovery, and users can score the portion of a portfolio that is above, below or within a pre-set score range. This option is very resource effective and yields quick results.
 
Ultimately, by using SCORE’s advanced modeling and analytics to generate actionable insights, companies can improve cash flows and maximize their returns.
 
SCORE helps businesses develop robust, cost-effective and targeted collection activities that increase the value of your business and your return on investment. Contact us today at 647.309.1803 to get the conversation started.
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