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2012 Experian Limited. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Limited. Other products and company names mentioned may be the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without prior written permission of Experian Limited. Experian Public. 4th International Congress: Debt Collection Market Trends and Prospective Moscow 14th November 2013 The peculiarity of the moment how did other markets go through it Luca Calconi, Global Consultant, Experian Decision Analytics

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2 2012 Experian Limited. All rights reserved. Experian Public. 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 For the year ending 31 March 2012 * At 10 May 2012 Leading global information services company, providing data and analytical tools to clients around the world Leading global information services company, providing data and analytical tools to clients around the world

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3 2012 Experian Limited. All rights reserved. Experian Public. Our business How our global revenue splits Credit Services 47% Decision Analytics 11% Marketing Services 21% Consumer Services 21% Diverse portfolio by geography, business line and customer segment By customer segment Financial services 32% Direct to consumer 21% Retail 14% Other 14% Public Sector /Education Automotive Insurance Telecoms /Utilities Media 2% 5% 3% 4% 5% By business line By region EMEA/Asia Pacific 14% UK & Ireland 18% North America 47% Latin America 21%

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4 2012 Experian Limited. All rights reserved. Experian Public. 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

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5 2012 Experian Limited. All rights reserved. Experian Public. Key success factors (KSF) in retail debt collection 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 Implementation Complexity Economic Benefits Banks Self Assessment * EXPERIAN Assessment * Source: Roland Berger

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6 2012 Experian Limited. All rights reserved. Experian Public.... DOS Treat your customers differently Challenge and track your process Intelligent accounts allocation to External Agencies Reward individual collectors performance in a transparent way

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7 2012 Experian Limited. All rights reserved. Experian Public.... DONTS 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

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8 2012 Experian Limited. All rights reserved. Experian Public. The market evolution how banks are reacting to the new environment Single end to end platform Scoring and Segmentation Automatic / One to One Accuracy Improve customer experiance Increase Cash flows Reduce operational costs Champion - Challenger MIS Financial and Operational Client Level View

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9 2012 Experian Limited. All rights reserved. Experian Public. Assessing your collections challenges Identify process gaps No automatic actions Data integration Collectors team size / Hardware Collectors skills Channel usage Quick ROI to aid cash flow Capital expenditure restrictions Cost of collection increasing Not flexible and scalable

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10 2012 Experian Limited. All rights reserved. Experian Public. Collection best practice Know your customer Understand your customer Contact your customer Select your customer Increase the depth of the information: Client level view Integration of all internal data sources (payments, CRM, ) Third Party data Feedback data 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 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 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, Maximize the effectiveness of the actions: Ergonomic tool for the collectors Controlled workflow Integration with dialers, document management systems,

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11 2012 Experian Limited. All rights reserved. Experian Public. 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 o Financial data (payments, limit usage, exposure, ) o Behaviour data (new credit requests, accounts closing, disputes, ) o Collection feedbacks (undelivered mail, refuse to pay, broken promises, ) Several models can be developed to answer to specific needs o Self cure score o Payment projection score o Late collection score o 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 o Sub-portfolios size / capacity planning o Provisions

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12 2012 Experian Limited. All rights reserved. Experian Public. Automatic One to One The Best Practice An overview DataAnalytics Operational toolsWorkflowMIS Test and learn Internal External Scoring Segmentation Optimisation Decision Engine

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13 2012 Experian Limited. All rights reserved. Experian Public. 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

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14 2012 Experian Limited. All rights reserved. Experian Public. Luca Calconi Senior Business Consultant / Global Consultancy Practice Experian Decision Analytics Experian | Via Carlo Pesenti 121 | Roma | Italy T: +39 06 4548 61 | M: +39 348 68 79 775 F: +39 06 4548 6480 | email luca.calconi@experian.com Contacts

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