Absa Bank Helps Distressed Africans Keep Their Homes During Pandemic Using FICO Collections Technology
Absa Bank has successfully transformed its collections operations in collaboration with FICO, resulting in self-paying customers increasing from 23% to 43% within three months. This transformation led to a notable reduction in impairment charges and yielded a three-month ROI of 29:1. The implementation of FICO® Customer Communication Services enabled Absa to assist distressed customers effectively during the COVID-19 pandemic, ensuring that more customers could remain in their homes. Absa was honored with the 2021 FICO® Decisions Award for its achievements in debt collection.
- Self-paying customers increased from 23% to 43% after deploying FICO's solution.
- Achieved a three-month ROI of 29:1.
- Reduced impairment charges significantly.
- FICO CCS enabled effective customer communication during COVID-19.
- None.
JOHANNESBURG, March 4, 2021 /PRNewswire/ -- Absa Bank, one of Africa's largest financial groups, has transformed its collections operations working with global analytics software firm FICO. After three months of deploying FICO® Customer Communication Services (CCS) and making process changes, self-paying customers nearly doubled, from 23 percent to 43 percent, and immediately reduced impairment charges, resulting in a three-month ROI of 29:1. As COVID-19 hit Africa, the FICO solution enabled Absa to roll out payment relief initiatives and communicate with distressed customers, meeting its vision of 'Housing the Nation'. For its achievements, Absa Bank has won the 2021 FICO® Decisions Award for Debt Collection.
More information: https://www.fico.com/en/solutions/customer-communications-for-debt-collection-and-recovery
"Recently, Absa embarked on a three-year journey to transform its collections estate into the best-in-class in the world," said Sibulelo Ncamani, a change lead in the Collections Transformation Programme at Absa. "We selected FICO as our strategic partner for this journey, focusing mainly on analytics, operations and technology.
"One of the solutions we chose is the FICO Customer Communications Services, which our Home Loans portfolio implemented first. We sought to achieve a digital, omnichannel capability that will enable 24/7 access to our distressed customers to assist in their time of need. This capability was a crucial component to the Absa Home Loans business vision of 'Housing the Nation' and more specifically for Home Loans collections and recoveries."
Improving Communications in Collections
Communications is the key to effective collections, and Absa needed to break down siloed communication channels, create profile-specific communication strategies, and execute real-time processes. Automation was important, as was learning from response and interaction data to see what worked and which channels customers preferred.
FICO® Customer Communication Services (CCS), integrated with FICO® Debt Manager™, enabled Absa to set up different treatment strategies for customers who were at different risk levels and who had different reasons for being in arrears, including:
- Technical arrears, such as delayed inter-bank payments.
- Salary dates that had moved.
- Customers who simply forgot to pay and require a nudge or reminder for payment.
- More severe types of distress such as reduced working hours or even unemployment.
Using FICO CCS's omnichannel capability, Absa sent customers different combinations of static messages, interactive messages and interactive voice recordings, allowing customers to self-pay before being worked by an agent. Customers could also make a payment arrangement without having to talk to an agent.
"We saw fantastic results from our initial trial," said Ncamani. "Removing accounts from the dialler resulted in a 26 percent reduction in call center effort, without a reduction in customers' payment performance. By automating more work, we also saw our team's morale improve, as more meaningful work was provided to agents."
Meeting the COVID-19 Challenge
When South Africa went into hard lockdown at the end of March 2020, it placed a severe constraint on the collection team's operational capacity, at a time of unprecedented distress for customers. "More of our customers than ever were in danger of losing their homes due to non-payment," said Ncamani. "Again, FICO CCS was able to accommodate Absa Home Loans. By increasing our capacity through automation, we were able to focus on severely distressed customers and roll out payment relief initiatives as part of our COVID-19 response. FICO CCS also acted as a channel of engagement for distressed customers looking for assistance on managing their bond repayments. FICO CCS enabled us to do 'business as usual' collections in a period that was anything but usual."
Absa plans to expand FICO CCS to more customer segments as it prepares for any future increase in delinquencies following post-COVID-19 stress. The capacity saving expected from FICO CCS will allow the business to promote agents from pre-legal collections to legal recoveries.
"This will further improve the colleague experience and assist our business in the area that is expected to be under strain for an extended period of time post-COVID-19," said Ncamani. "In addition, we will expand FICO CCS strategies to include automated forbearance offerings and deceased estate management, which are highly manual processes today. And we will use the data generated by CCS to develop interaction models that will allow us to offer the right customer the right solution through the right communication channel."
"Absa Bank kept more customers in their homes during an unprecedented period of anxiety and financial stress," said Nikhil Behl, chief marketing officer at FICO. "That is an achievement that goes beyond profit margins — the bank is truly a force for social good. We at FICO are honored that our technology could play a part."
"ABSA understands the sensitivity of the collection process and the importance of reaching a customer as quickly as possible," said Tiffani Montez, banking analyst at Aite and one of the FICO Decisions Awards judges. "They were able to take a manual collections process and automate customer outreach with a high-touch, flexible communication model. In addition, they were able to reduce reliance on having an agent take payment by giving the customer the ability to review options and make payment."
FICO® Customer Communication Services, part of FICO's solutions for debt collection and recovery, enables businesses to orchestrate communication strategies with different channel mixes, follow consumers if they switch channels, and measure results in a unified approach across channels. Collections teams can conduct any number of dialogues through online and mobile channels with the efficiency, courtesy, and compliance of their best agents.
About Absa Bank
Absa is one of Africa's largest diversified financial services groups with a presence in 12 countries across the continent and around 42 000 employees. The company is listed on the Johannesburg Stock Exchange and was founded in 1991. The company offers it clients a range of retail, business, corporate and investment, and wealth management solutions. https://www.absa.co.za/personal/
About the FICO® Decisions Awards
The FICO Decisions Awards recognize organizations that are achieving remarkable success using FICO solutions. A panel of independent judges with deep industry expertise evaluates nominations based upon measurable improvement in key metrics; demonstrated use of best practices; project scale, depth and breadth; and innovative uses of technology. The 2021 judges are:
- Prasanna Dhoré, Chief Data & Analytics and Innovation Officer, Equifax
- David Dittmann, vice president, Data & Analytics, P&G (2019 winner)
- René Javier Guzmán, market & liquidity risks director at Banreservas (2019 winner)
- Tomas Klinger, decision science and data director at Home Credit (2019 winner)
- Marcel Le Gouais, managing editor at Credit Strategy
- Tiffani Montez, banking analyst at Aite
- Lisa Morgan, journalist & analyst at InformationWeek
- Ignazio Provinzano, head of risk operations at Swisscard (2019 winner)
The winners of the FICO Decisions Awards will be spotlighted at and win tickets to FICO® World 2021, the Decisions Conference, November 2021 in Orlando, Florida.
About FICO
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 195 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 120 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.
FICO and Debt Manager are registered trademarks or trademarks of Fair Isaac Corporation in the US and other countries.
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