Marketing/Customer Management

Through data mining and the application of advanced predictive techniques, our clients can understand what the main drivers of customer behavior are, which in turn allows for the development of more targeted marketing strategies and better capabilities to increase repeat sales. Propensity models are valuable tools, based on customer behavior patterns, usage patterns or product characteristics. A good model increases the ROI for marketing initiatives by identifying the right segment to target, the optimum product offer, or the best marketing channel to use. Predictive models are also useful in improving customer retention or increasing share-of-wallet through data-based cross-selling.

Loan Collections/Servicing

Behavior Scorecards

The application of Data Analytics and Modeling in loan collection processes results in streamlined operations by allocating and prioritizing resources based on the likelihood of repayment. By ranking the loans based on the collection risk, Collection teams can develop cost-effective strategies that are appropriate for each risk segment. Typically, loans with the highest likelihood of repayment are not acted upon until collection efforts have started for all other higher risk loans.

In addition to loan segmentation analysis, the analysis can also focus on determining the most effective collection strategy or collection channel through the application of Champion-Challenger Tests.

To determine likelihood of repayment, we apply logistic regression techniques to develop behavior scorecards, which are essentially predictive models built from a large collection of past payment transactions. The loan payment history and other characteristics are fed periodically through the scorecard to obtain a single number or score that represents the relative risk of missing a payment in the current cycle.

Besides scorecard development, we also design the monitoring process in compliance with model governance requirements, perform independent reviews or validation on scorecards built by a third party.

Roll Rate Models

These models are used to track the migration of delinquent loans from being current through the various delinquency buckets (30 days past due, 60 days past due, etc.). They are used not only for resource planning in Collections but also to complement the credit loss forecasting process in financial institutions, used to calculate credit reserves. Roll rate models are used mainly as a forecast tool with a very short-term horizon.

Pricing

Pricing optimization methodologies are based on the analysis of vast amounts of data to estimate price elasticity, customer segments, and true costs (or margins), along with the production of demand forecasts, optimal margins, sales goals and competitive analysis. Pricing optimization strategies can be developed at a product level, store or channel level.

Advanced optimization techniques such as genetic algorithms, along with statistical techniques like conjoint design to determine the customer value for specific product attributes, allow us to develop profit-maximizing pricing strategies that can be adjusted quickly in response to changes in demand, cost structures, market environment, and business goals.

Quality Control/ Quality Management

We can help your organization in implementing quality improvement programs such as TQM and Six Sigma. We have expertise in both Manufacturing and Transactional Six Sigma, with dozens of projects in areas as diverse as: yield improvements in refinery operations, energy optimization, call center IVR redesign, procurement process reengineering, credit card fraud reduction, credit line optimization, appraisal cost reduction in mortgage operations, among others.

We also help identify and prioritize improvements based on the overall goals of the organization, leveraging advanced quantitative tools along with process knowledge to balance competing metrics such as yield, cost, cycle time, defect rate, customer satisfaction, and regulatory compliance to achieve an optimum end goal.

Through seminars and training sessions, we can also help create the knowledge base within the client organization to sustain a continuous improvement culture.

Operations Management

We use Operations Research tools in solutions for:

Capacity Planning

Demand Forecasting

Inventory Management

Production Scheduling

Task Scheduling

Supply Chain Optimization

Process Reengineering

Lean Implementation

Project Planning

Resource Management

We have expertise on the application of OR methods such as Robust Optimization, Game Theory, Goal programming, Heuristics, Linear Programming, Dynamic Programming, Probability Theory, Decision Analysis, Markov Processes, Network Theory, Neural Networks, Optimal Control Theory, Queuing Theory and Simulations.