1. The peculiarity of the moment – how did other markets go through it Luca Calconi, Global Consultant, Experian Decision Analytics
4th International Congress:
“Debt Collection Market – Trends and Prospective“
Moscow – 14th November 2013

2. Our business Snapshot of Experian
Revenue: US$4.5 bn
EBIT: US$1.2 bn
Market Cap*: £9.0 bn
In top 50 of FTSE-100
Employees: c. 17,000
Offices in 44 countries
Largest markets: US, Brazil, UK
Corporate headquarters: Dublin
We are a leading global information services company.
Our business has annual sales of around $4.5bn.
In the year to March 2012, our last reported year, we delivered profits of almost $1.2bn.
We have offices in 44 countries and deliver services to clients in many more countries around the world.
Our headquarters are in Dublin, Ireland and our three largest operating centres are in Nottingham (UK), Costa Mesa (California - US) and Sao Paulo (Brazil).
Our shares have been quoted on the London Stock Exchange since October 2006, when we demerged from GUS
Leading global information services company,
providing data and analytical tools to clients around the world
For the year ending 31 March 2012
* At 10 May 2012

3. Our business How our global revenue splits
By region
By business line
EMEA/Asia
Pacific 14%
Consumer Services 21%
UK & Ireland
18%
North America
47%
Credit Services 47%
Marketing Services 21%
Latin America
21%
Decision Analytics 11%
By customer segment
We provide information, analytical tools and marketing services to organisations around the world.
We report across four geographic regions (although we run the business across five). Our regions are
North America – which is just under half of the business.
Latin America – now 21% of our business.
UK and Ireland – now 18%.
Europe, Middle East & Africa and Asia Pacific, which combined now make up 14% of our business.
Our business activities are grouped into Credit Services, Decision Analytics, Marketing Services and Consumer Services business lines:
Credit Services makes up just under half of our business and provides software, tools and consulting to turn data into actionable decisions.
Decision Analytics is 11% of our business and enables clients with large customer bases to manage and automate large volumes of day-to-day decisions.
Marketing Services is 21% of our business and helps clients to target and engage customers effectively, while delivering improved return on investment.
Consumer Services is also 21% of our business and enables consumers to monitor the accuracy of their credit report online, to check their credit score and protect themselves against identity theft.
We also have a wide spread of clients, with revenue from our top 10 clients accounting for just under 10% of the business, and our top 50 clients accounting for just over 20% of revenues.
Vertical split
We serve many thousands of clients around the world in a range of industry sectors
Just under one third of our revenue is from clients in Financial Services
And about 20% of our revenue comes from consumers, the balance comes from a diverse range of industries including retail, automotive, telecoms and utilities, insurance, public sector and media.
Financial services 32%
Diverse portfolio by geography, business line and customer segment
Direct to consumer 21%
Other 14%
Retail 14%
Media 2% 3% 4% 5% 5%
Public Sector
/Education
Insurance
Telecoms
/Utilities
Automotive

4. What our clients say
“... When the business slows down the contraction of the revenues and the increse of credit losses had a direct impact the bottom line …”
“... We are changing the focus from the Front-End to the increase of efficiency in the Back-End processes …”
“... In the next 12 months I expect an increase in the number of past due accounts …”
“... Only improving the collection process we can reduce the impairment level and get some benefits of the capital …”

5. Key success factors (KSF) in retail debt collection
Banks Self Assessment *
Implementation Complexity
Economic Benefits
Well defined set/organization of processes
Know-how/Experience of Staff
Specialized collection units
Clearly defined competences & responsibilities
Right incentivation of collection staff
Specialized software applications
High degree of automatization of processes
Early start of early collection procedure
Early warning systems
Nr. of Staff
Early start of late collection procedure
Competent external partners
Availability of necessary information
Early start of legal collection procedure
EXPERIAN Assessment
* Source: Roland Berger

6. ... DO’S Treat your customers differently
Challenge and track your process
Intelligent accounts allocation to External Agencies
Reward individual collectors performance in a transparent way

7. ... DON’TS Overlap sales and collection activities on the same staff
Use extensively collection remedial tools
Outsource collection from day 1
Ignore the importance of storing data

8. The market evolution how banks are reacting to the new environment
Single ‘end to end’ platform
Client Level View
Accuracy
Scoring and Segmentation
Increase Cash flows
Automatic / One to One
Improve customer experiance
Champion - Challenger
Reduce operational costs
MIS – Financial and Operational

9. Assessing your collections challenges Identify process gaps
No automatic actions
Not flexible and scalable
Data integration
systems & processes
costs
resources
Cost of collection increasing
Collectors team size / Hardware
Capital expenditure restrictions
Collectors skills
Quick ROI to aid cash flow
Channel usage

10. Collection best practice
Know your customer
Understandyour customer
Select your customer
Contact your customer
Increase the depth of the information:
Client level view
Integration of all internal data sources (payments, CRM, …)
Third Party data
Feedback data
Develop analytical tools to add value to the data:
Scoring models
Customer Value
Expected loss
Elasticity
Segment the portfolio:
Define different customers profile to address different collection paths
Identify best action according to cost-benefit analysis
Special treatments
Maximize the effectiveness of the actions:
Ergonomic tool for the collectors
Controlled workflow
Integration with dialers, document management systems, …

11. Creating added value from the data Analyitcs
A large number of data sources can be used to develop models that provide useful forecasts of future behaviors
Financial data (payments, limit usage, exposure, …)
Behaviour data (new credit requests, accounts closing, disputes, …)
Collection feedbacks (undelivered mail, refuse to pay, broken promises, …)
Several models can be developed to answer to specific needs
Self cure score
Payment projection score
Late collection score
Recovery score
Segmentation techniques (CART, CHAID) can be used to split the delinquent portfolio into homogeneous cluster
Analytics can also help to make forecasts of the impact of alternative strategies in a what-if scenario
Sub-portfolios size / capacity planning
Provisions

12. The Best Practice An overview
Data
Analytics
Operational tools
Workflow
MIS
Internal
Scoring
Decision Engine
Automatic
External
Segmentation
Optimisation
One to One
Test and learn

13. Conclusions
Financial crisis impacted the quality of banks assets globally
Reaction of banks brought to large revisions of the collection processes in place
Be pragmatic! Firstly assess your gaps and then and implement initiatives in road map approach to maximise ROI
Leverage on Analytics

14. Contacts
Luca Calconi Senior Business Consultant / Global Consultancy Practice Experian Decision Analytics Experian | Via Carlo Pesenti 121 | Roma | Italy T: | M: F: |

15. © 2012 Experian Limited. All rights reserved. Experian Public.