1. © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. The Role of Technology in Compliant Collections Improving Business Controls, Service Quality and Cost Effectiveness David Lightfoot Product Management Vice President FICO Ed Broyles Global Channels FICO

2. © 2014 Fair Isaac Corporation. Confidential. What We Aim to Show You Today Through appropriate use of analytics and technology for data management and automation, regulation can be leveraged to profitably build competitive advantage in the Collection & Recovery space for both first and third party collectors. 2

3. Agenda © 2014 Fair Isaac Corporation. Confidential. ► Regulatory Landscape ► What’s at Stake? ► How Can Technology Help? 3

4. © 2014 Fair Isaac Corporation. Confidential. Current Regulatory Landscape Getting Hit From All Sides ► Federal ► Prudential Bank Regulators ► CFPB, FCA ► FTC and FCC ► Joint Enforcement ► States ► Courts ► Industry 4

5. © 2014 Fair Isaac Corporation. Confidential. 5 More Regulatory Reform on Its Way Future Forecast FDCPA Update—third parties Additional state reforms New federal rules—first parties How to Respond? ► Not just about the treatment of the consumer ► Focus areas include: ► Infrastructure ► Internal controls ► Audit ► Reporting Medical Collections Scrutiny

6. © 2014 Fair Isaac Corporation. Confidential. Operational and Conduct Risk Across the Supply Chain Risk VendorsProcessorsFirst Parties OCAs and Debt BuyersConsumers 6

7. © 2014 Fair Isaac Corporation. Confidential. ► Regardless of interpretation, additional work is required ► Compliance and Legal staff ► Internal Audit and external Audit of 3 rd Parties ► Data Cleansing and Segmentation ► Collector Productivity What’s at Stake? Technology can provide a solution— Data Management, Analytics and Automation The problem demands agility and reducing legacy costs to support the new costs of compliance 7

8. © 2014 Fair Isaac Corporation. Confidential. …All you need is unlimited: ► Lead Time ► Money ► Legal, Compliance, Collector and Technology resources…. Compliance Is Easy… 8

9. © 2014 Fair Isaac Corporation. Confidential. How Technology Can Help: Productivity, Consistency and Transparency ► 15–30% reduction in bad debt ► Reduced cycle 1-write-off roll rate 10% ► 3-year ROI of 24:1 ► 20% decrease in bad debt. ► 60% reduction in loan loss provisions ► 15–20% agent productivity improvement. 40% increase in daily processing volume ► 30% decrease in average account process time ► $22,000 additional revenue per agent ► 30% reduction in closing balances vs. offshore call center resources ► 18% improvement in average remittance ► 69% of inbound calls managed without agent intervention ► Dramatic improvements in customer satisfaction ► Upfront savings: $400k– $700k vs. in-house build ► Ongoing savings: 7:1 ROI or more ► 30% increase in recovery amount. 40% decrease in costs CUSTOMER COMMUNICATION SERVICES Contact the right customer Keep good customers. Measure Performance. Timing @ Channel Frequency SPEECH ANALYTICS What to say Confirm compliance 100% coverage ► 15–20% improvement in strategy effectiveness SCORES Improve understanding of who can afford to pay MODELS Who will pay? How much? When? OPTIMIZATION Increase likelihood of payment? MODEL MANAGEMENT Ensure models used to determine risk and other outcomes are appropriately governed ADAPTIVE CONTROL Who to collect on and who to leave alone. Actions consistently applied. Improve without risk. Keep good customers DATA MANAGEMENT Make needed information available. Determine what information is useful. COMMUNICATIONS NETWORK Give/get information quickly and securely COLLECTIONS CASE MANAGEMENT Collect in-house. Place outside. Sell Make it easy to pay Automate actions Allocate resources most effectively. Measure and ensure performance. Reconcile financials Record & report on all activity What work queues. Which Collector. How many cases. When. For how long. What actions. When. Know what’s working. ADVANCED AGENCY MANAGEMENT Manage and optimize relationships with agency/vendor Who to place with. For how long. At what price. Ensure Compliance. Measure Performance 9

10. © 2014 Fair Isaac Corporation. Confidential. Compliance Rules Compliance Pop-ups Historical Events Audit Template Compliance Framework Compliance Queues Contact Reports 10

11. © 2014 Fair Isaac Corporation. Confidential. 100% Speech Analytics Coverage Virtual Agents, Internal Agents and External Agents Voice Social Media Online MobileDirect Email Text 11

12. © 2014 Fair Isaac Corporation. Confidential. ► Automation is key to productivity, consistency, transparency and cost containment ► Execute on the “new basics”—comprehensive data capture and analyses, analytically-driven actions, rules-based treatment and collector activity control, 100% coverage of voice interactions, virtual agents, consumer education ► Cloud services offer easy access to compliance support technologies ► Addressed carefully, regulation can be leveraged to profitably build competitive advantage in the Collection & Recovery space for both First and Third Party collectors Summary 12

13. © 2014 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent. Thank You! 13 Ed Broyles EdBroyles@fico.com 704.375.0266 David Lightfoot DLightfoot@fico.com 415.446.6332

14. © 2014 Fair Isaac Corporation. Confidential. Learn More at FICO World Related Sessions ► Unifying The Customer Experience Across The Life Cycle—BMW Finance ► How to Collect More, Spend Less, And Stay Compliant Using Omni-Channel Contact Strategies Products in Solution Center ► FICO ® Debt Manager™ solution ► FICO ® Customer Communication Services ► FICO ® Engagement Analyzer Experts at FICO World ► Cheryl Miller | AJ Travagline | Doug Thompson | Hal Wilkins | Morgan Nagle White Papers Online ► Harnessing The Speech Analytics Advantage ► How Mobile Communications Can Improve Collections ► Five Imperatives In A Shifting Collections Landscape Blogs ► www.fico.com/blog 14

15. © 2014 Fair Isaac Corporation. Confidential. Please rate this session online! Ed Broyles EdBroyles@fico.com David Lightfoot DLightfoot@fico.com 15