Improve Cure Rate in Credit Card Collections

Lean Six Sigma Project - Sample
Improve Cure Rate in Credit Card Collections
Saturday, October 10, 2020

Business Need for the Project
Client intended to aggressively capture higher market share in Credit Card Market. This meant lower interest rates for customers
and easy access to credit facilities. Higher customer base meant higher delinquent accounts and hence necessity to improve
Delinquent Account Resolution Rate
Client Speak
‘We are looking at expanding our customer base and
Credit Ops needs to be geared up
Head, Collections
Client Speak
‘Customers looking for Delinquency managers rather than
collectors’
Head, Credit Operations
-2-
VOC to CTQ Drill Down
ard
VOC
vi ng fo r hi gh er m ar ket share of Credit C
We are stri
market
Customers require delinquency managers rather than collectors
Credit Ops un
its need to re
objectives align themse
lves with current organ
izational
Customer
Gross Credit Loss
SPECIFIC
Cure Rate or Account Resolution Engagement

rate was the metric chosen as it
satisfied both business as well as
customer engagement criteria
Payment
Roll Rates arrangements
Hardship/Special
Roll Back Rate Static Rate Cure Rate
Queue rate
-3-
Business House of Debt Collections- How ‘Cure Rate’ fits in Big Picture
Customer Debt
Output
Delinquent Inventory
Credit Losses
Roll Back Cure Roll Forward Static

Made up by
Accounts Made up by Accounts on
accounts
Operational Output
where entire accounts which

where partial
outstanding is where no Minimum
payments are
collected and payment is payment due is
received and
they move out received and received and
they move
of delinquent they move to which remain
back to some
Inventory subsequent in the same
previous
higher bucket delinquency
delinquency
stage
stage
Promise to Pay Promises Kept
Contact Rate Contact Reach Calls Made Skip Effectiveness
Operational Metric
-4-
Credit Card Collections Lifecycle
• Credit Card Collection revolves around Bucket structure. A bucket refers to a 30 day period from the time a
customer misses payment due date. There are total 6 buckets i.e. 180 day cycle
• Post each 30 day period based on the payment received, account either moves to next bucket (Roll Forward),
stays in the same bucket (Static) or moves back a bucket (Roll Back)
• If a customer clears the entire amount due on account, it is termed as a Cured account
• Schematic diagram below represents the lifecycle of account in Collections
Customer Out of Collections
Cure Cure Cure Cure Cure Cure
Roll Roll Roll Roll Roll Roll

Forward Forward Forward Forward Forward Forward Net
Credit
Roll Back* Roll Back* Roll Back* Roll Back* Roll Back* Loss
Static Static Static Static Static Static

Bucket 1 Bucket 2 Bucket 3 Bucket 4 Bucket 5 Bucket 6
0-30 days 30-60 days 60-90 days 90-120 days 120-150 days 150-180 days
Flow of Delinquent Inventory by Bucket
* Roll back can happen to any previous bucket
-5-
Project Charter
Project Leader XXXXX Project Champion XXXXX Project Mentor XXXXX
Team Members XXXX Process Owner XXXX Project Sponsor XXXXX
BUSINESS CASE PROJECT SCOPE INCLUDES

Collections process in CIM manages collections for a large global bank. Process Project scope includes M1 Cards and Ready
is being managed by team for 10 years. 100% of Bucket 1 collections is managed Credit portfolio (RC) for Large Global Bank
by offshore team M1 or Bucket 1 refers to accounts which are
between 0-30 days past due.
Bucket-wise cure rate is one of the most important metrics in collections. The
monthly inventory size for M1 (0-30 Days Past Due accounts) stands between Ready Credit product is an overdraft facility
MM$140-MM$160. Cure rate has a huge impact on the inventory size for the provided to account holders
following month. If an account in M1 is not cured it will still be in collections
buckets. As a result we would continue collections efforts on such accounts
which would result in increase in cost of collections and potential NCL (Net
Credit Loss).
PROBLEM STATEMENT PROJECT SCOPE EXCLUDES
M1 cards Cure Rate stands at 36.86% (Average Cure Rate for 31 months, Jan-12 All buckets except M1
till July-14). The business expectation (communicated to team as a part of All portfolios except Cards and RC
Business Leader’s scorecard) gave the target as 45% and above for the same.
Timelines
The customer expectation was also to improve and sustain the improvement
over a complete cycle of collections Phase Target Date Actual Date
Define 6-May-14 6-May-14
Measure 18-Jun-14 30-July-14
GOAL STATEMENT Analyze 15-July-14 18-Aug-14
Improve 30-Dec-14 30-Dec-14
To Increase the cure rate in M1 cards (Very High Risk) from an average of 36% to
Control 15-July-15 Ongoing ( as per
a cure rate of more than 45% by 31 st Dec 2014 Client reqmt)
Collections Activity Map
Delinquent
Customer
Legal
team
CORE
Account Allocation Processing
Assess nature of System
business
Align collection strategies Initiate Write Off
based on ageing
Review notes and
Prioritize accounts
ageing
Allocate inventory
Initiate write off as per
policy
Update customer credit

bureau
Account Research
Review notes and total
outstanding
Trends of promises
kept/broken Establish Contact Offer Arrangements Dispute Resolution
Review if any payment Prepare calling pitch Assess payment history Identify and analyze
already made dispute
Call customer/ use Check arrangement
alternative channel based eligibility/discount Initiate Dispute workflow
on contact history eligibility
Perform due diligence
Book promise if Offer arrangement and and update status of
applicable take acceptance account
Book follow up reminder Set up the customer on Accept dispute and alter
Enter notes and arrangement amount
disposition code Reject Dispute and
assign account to
7 collections
Metric Definition, MSA and Data Collection Plan for Y
Process Information
Operational Definition of Metric
Domain Banking
Cure Rate
FTE Size 45
=
Amount of Inventory Resolved (0-30 days)/Amount of Total Opn 6:30AM – 4:30PM (IST) /
Inventory (0-30 days) Window 12:00 PM – 9:00 PM (AEST)
Type Collections
Product Credit Cards
MSA
Client Large Global Bank
The data received from Business Intelligence reports generated Billing

FTE Based
by Client Analytics team Type
The report is one version of truth across the bank
Measure Data type What Frequency Source Period
Cure Rate M1 Continuous Inventory resolved and Monthly System Reports 31 Months
Total Inventory (Jan’12 to Jul’14)
8
Normality Check & Baselining
Null and alternate hypothesis

Summary for Cure HO – Data is not non normal
A nderson-D arling N ormality Test HA – Data is non normal
A -S quared 0.27
P -V alue 0.666
M ean
S tD ev
0.36862
0.04019
 Normality: P value is greater than
V ariance 0.00162
S kew ness 0.683055
0.05
Kurtosis 0.833728
N 31  Shape: Normal
M inimum 0.30416
1st Q uartile 0.33939  Measure of central tendency : As
M edian 0.36479
0.32 0.36 0.40 0.44 0.48

3rd Q uartile 0.40091 data is normal the measure of
M aximum 0.48526
95% C onfidence Interv al for M ean central tendency will be mean =
0.35388 0.38336 36.86% Cure Rate
95% C onfidence Interv al for M edian
0.34554 0.38474  Spread:
95% C onfidence Interv al for S tD ev
9 5 % C onfidence Inter vals
0.03212 0.05372
Stability factor = Quartile 1
Mean
divided by Quartile 3
Median
0.34 0.35 0.36 0.37 0.38 0.39 Stability factor = 0.33/0.40 = 0.82
Inference:
• The P - value is 0.66, greater than 0.05, that indicates that the data considered for the project is normal &
the Process is following Normal distribution
-1-
Stability & Capability Analysis
I Char t of Cure
High value accounts got
0.50 1
cured hence the spike UCL=0.4708

0.45
Inference:
Stability
Individual Value
0.40
_ The process in under control
X=0.3686
0.35 with exception of one instance
which has an assignable
0.30
cause as mentioned
LCL=0.2664
1 4 7 10 13 16 19 22 25 28 31
Observation
Process Capability of Cure
LSL
P rocess D ata W ithin
LS L 0.45 O v erall
Target *
USL * P otential (Within) C apability
S ample M ean 0.368617 Cp *
C PL -0.80
Capability
S ample N 31
S tD ev (Within) 0.0340558 C PU *
S tD ev (O v erall) 0.040189 C pk -0.80
O v erall C apability
Inference:
Pp *
PPL -0.68 As per Capability Analysis it is
PPU *
P pk -0.68 evident that current capability of
C pm * process is below customer
expectation
0.28 0.32 0.36 0.40 0.44 0.48

O bserv ed P erformance E xp. Within P erformance E xp. O v erall P erformance
P P M < LS L 967741.94 PPM < LS L 991568.91 P P M < LS L 978566.78
PPM > USL * PPM > USL * PPM > USL *
P P M Total 967741.94 PPM Total 991568.91 P P M Total 978566.78
Fishbone Analysis to find out reasons for Low Cure Rate
Process
Systems
Technology
Hardship customers become

Non contactable after 1 or 3 No control on
Customer not answering calls Non availability
month moratorium pacing of Dialer
From masked Numbers of MIS
No call back No Real

on Left Message time performance System Latency
monitoring
Dialer stamping on
Unavailability of Voicemail accounts without connects being made
for inbound lines
Low Cure Rate
Low
PTPs Taken
Low
Inadequate Process Low Absence of Financial Behavior – No. of Contacts
Knowledge Contacts/ Hour analysis on Spending and
best time to call Payment Habits Dialer Manual
Faulty Effectiveness split not
High
Incentive Model available
Wrap and Low Talk time
Preview Time Availability of
Home/Office numbers
Inadequate Different payment habits of No account level ownership

Skip search skills salaried / self employed customers
People Customer
Measurement
Quick Win Identification/Data Collection Plan for Xs (1 of 2)
S. No Potential Cause Potential quick win/Solution to be deployed Data Collection Data Source of
Plan- What to Availa Data/How to
collect ble collect
1 No account level ownership Account stays with one agent till Promise NA NA NA
date
2 Past Spending habits/ Separate queue based on past delinquencies Frequency of Sampling based
Frequency of becoming delinquency on del status
delinquent beyond bucket 2 (Aug’14)
3 Inadequate Process TLs to devote more time on coaching NA r Process Test
Knowledge Introduction of subjective/situation based scores
process tests
4 No call back on left messages Ask Client to introduce a separate queue to
call back on left messages
NA
a NA P.R.
5 Unavailability of Voicemail Ask client to introduce voicemail for Inbound NA NA NA

for inbound line calls
6 Customer not answering calls Ask customer to allow calling from unmasked NA NA NA
from masked numbers numbers
7 Dialer stamping on System issue. Taken up with client IT team. NA NA Instances
accounts without connects Samples of instances where attempts were shared with
being made counted w/o dialing shared client
8 Non availability Coordinate with Client analytics team who NA NA --
of MIS generates reports
9 No Real time performance Build automated tools to track real time NA NA --
Monitor promises and accounts touched
10 System Latency IT Team to assign higher bandwidth in Data available and shared Latency Reports
Australia shift to process with IT Team
Quick Win Identification/Data Collection Plan for Xs (2 of 2)
S. No Potential Cause Potential quick Data Collection Plan- What to Data Source of
win/Solution to be collect Available Data/How to
deployed collect
11 No control on dialer pacing Request bank for Client IT team denied the request NA Productivity Reports
pacing control (P.R.)
12 Lower promises taken NA Monthly Promise Rate Productivity Reports
(P.R.)
13 Less number of contacts NA Number of Contacts a P.R.
14 Faulty Incentive Model NA NA NA NA
15 Type of employment (Salaried NA Employment type of delinquent
a Sampling of del
vs. Self Employed) customers customers (Aug’14)
16 Customer employment status NA Employed/Not Employed status of Sampling of
(Employed/Unemployed) sample of customers delinquent
r customers (Aug’14)
17 Low Talk time NA Talk hours at process level Avaya reports
18 Low contacts/hour Calls/hour month on month r P.R.
19 High Wrap time NA Wrap time data month on month P.R.
20 Inadequate Skip Skills (search
contact details for Non
NA Skip performance of associates to
be tracked
a Monitor skip
searches done by
21
Contactable customers)
Absence of analysis on Best Analytics team to NA
a agents (Aug’14)
Account level
time to call pick up study
a analysis
r
Quick Wins/Solution Identified Ownership
Deployed Partially Deployed/In Progress Not Deployed
S.N Quick Win Ownership Status Controls
o
1. Initiate Account level ownership xxxx Deployed Reporting structure included account level inputs with
agent name
2 • TLs to devote more time on coaching xxxx Deployed Automated tracker introduced to log activities and
agents to give acceptance on feedback sessions
• Introduction of subjective/situation based process tests
3 Ask Client to introduce a separate queue to call back on xxxx Not Request shared with client. Capacity not agreed upon
left messages Deployed
4 Ask client to introduce voicemail for Inbound calls xxxx Not Request shared with client. Systems team assigned task
Deployed
5 Ask customer to allow calling from unmasked numbers xxxx Deployed System change, no controls required
6 Dialer stamping on accounts which have not been dialed xxxx Partially System issue. Taken up with client IT team. Samples of
thereby reducing opportunity to collect rectified instances where attempts were counted without dialing
customer shared
7 Make customized MIS available xxxx Deployed Daily, Weekly and Monthly MIS changed
8 Build automated tools to track real time promises and xxxx Deployed Automated tool built to track real time performance. TLs
accounts touched to audit the correct usage
9 Ask client to allow pacing control on dialer xxxx Not Pacing cannot be given to team
Deployed
10 Shared data with IT team. More bandwidth to be allowed IT Team Deployed System change. No process control required
for process
11 Analytic study initiated to ascertain Best Time to call xxxx In Study in progress
customers to achieve Contacts Progress
Study of Relationship (Y vs X)
Scatterplot of Cure vs PTP Rate Scatterplot of Cure vs Contacts
0.50 0.50
0.45
r= 0.237 r 0.45
r= -0.036 r
Cure
Cure
0.40 0.40
0.35 0.35
0.30 0.30
0.90 0.95 1.00 1.05 1.10 1.15 3000 4000 5000 6000 7000
PTP Rate Contacts
Promise Rate Contacts

Scatterplot of Cure vs Talk Hrs Scatterplot of Cure vs Wrap Hrs
0.50 0.50
r
Cure Rate
0.45
r= 0.088 0.45 r= -0.074 r
Cure
Cure
0.40 0.40
0.35 0.35
0.30 0.30
600 700 800 900 1000 1100 1200 1300 1400 1500 200 300 400 500 600 700 800
Talk Hrs
No Correlations Wrap Hrs
Talk Hours observed Wrap Hours

Scatterplot of Cure vs Contact Rate
against Scatterplot of Cure vs Kept Rate
0.50 expectations 0.50
0.45
r= -0.184 r 0.45
r= -0.081 r
Cure
0.40
Cure
0.40
0.35
0.35
0.30
0.30
0.50 0.52 0.54 0.56 0.58 0.60 0.62 0.64
0.04 0.05 0.06 0.07 0.08 0.09 0.10 0.11 0.12 0.13 Kept Rate
Contact Rate
Contacts Rate Kept Rate
Inference:
• No Correlation was observed between Key Input metrics and Cure Rate which was opposite to expectations
• Most surprising was almost zero correlation between Kept Promise Rate and Cure Rate
Study of Relationship between Multiple factors (X vs X)
Post observing No Correlation between key Input Metric and Project Y, an Input metric behavioral check was initiated to see if
they correlated in expected manner
Matrix Plot of Contacts, Talk Hrs, ... vs Contacts, Talk Hrs, ...
1
800 1200 1600 3000 4500 6000 0.04 0.08 0.12
Promises Kept
4
a
Desirable
7000 &
Contacts
5000 Expected
3000 1600
Talk Hrs
1200
3
800
5
Promises Taken
Wrap Hrs
600
400
200 2
6000
PTP
4500
3000
2
Contacts/Hr
3.2
2.4 Contacts
1.6
Not
PTP Kept Contact Rate
0.12
Desirable
3
0.08 r
4000
4 0.04
Wrap Hours
3000 1
2000
5 Talk Hours
3000 5000 7000 200 400 600 1.6 2.4 3.2 2000 3000 4000
Contacts Talk Hrs Wrap Hrs PTP Contacts/Hr Contact Rate PTP Kept
Investigate Time spent on

Inference: Wrapping the call
• Critical but expected correlations emerge from the Matrix plot

• If process talk hours increase there are subsequent positive impacts on Customers contacted, number of promises
taken and Promises kept i.e. money collected
• Wrap hours i.e. After call work goes up when Talk hours increase
Puzzling Situation- Correlations Dilemma
Kept Kept
Talk Time
Promise Talk Time Promises
s
Input Metric
Study
Promise
Promise Contacts
Taken
Contacts Taken
All Input metric talking to each other and
pieces of puzzle fit together
Talk Time Kept Rate

Input Metric with Cure
Rate Study
Cured Accounts
r
When Number of accounts Cured is
introduced the puzzle doesn’t get solved
Contacts Promises Taken
Solving the Puzzle- Exploring Static Inventory
Post Brainstorming team zeroed in on Static Inventory – Accounts where Minimum dues are collected which was not a key
number monitored until now. It was decided to collect data and draw Correlation with Kept Promises
Pearson correlation of Kept Promise and

Scatterplot of Static Rate vs Kept Promises Static%= 0.936
P-Value = 0.000
0.6
0.5
Static Rate
0.4
Kept promises majorly cater to
collecting Minimum Balance due
0.3
Process Key Performance Indicators

0.2 focus on “Number” of Promises
1500 2000 2500 3000 3500 4000 4500 Taken and Kept, main reason for
Kept Promises
such behavior
Inference:
• Clear Correlation exists between PTPs Kept and Static Inventory
• This indicates that agents are focusing efforts on taking single payments
• This is due to KPIs and Incentive Model which rewards them on taking PTPs (Promise to Pay) and not on curing/resolving the
account
Statistical Validation of Kept Promises vs Static Inventory
Post viewing the correlation, a causation test was conducted to understand how Static Inventory varies with Kept Promises
One-way ANOVA: Static Rate versus Kept Promises

Boxplot of Static Rate Range
0.6 Source DF SS MS F P
Kept Promises Range 3 0.22999 0.07666 36.84 0.000
Error 24 0.04995 0.00208
Total 27 0.27994
0.5
S = 0.04562 R-Sq = 82.16% R-Sq(adj) = 79.93%
Static Rate
0.4
Individual 95% CIs For Mean Based on
Pooled StDev
Level N Mean StDev --+---------+---------+---------
0.3 +-------
1500-2000 10 0.30800 0.02974 (--*--)
2000-3000 7 0.40286 0.04957 (--*---)
3000-4000 7 0.48429 0.02992 (--*---)
0.2
4000-4500 4 0.55750 0.08539 (----*---)
1500-2000 2000-3000 3000-4000 4000-4500
--+---------+---------+---------+-------
Kept Promises Range
0.30 0.40 0.50 0.60
Pooled StDev = 0.04562
Inference:
• ANOVA analysis clearly shows how Static Inventory moves with increase in Kept Promises
• Most of the promises taken from customers are for minimum balance payment i.e. making account Static
Puzzling Situation- Correlations Dilemma Solved
Kept
Talk Time Promises Kept
Talk Time Promises
Input Metric
Study
Promise
Promise Contacts Taken
Contacts Taken
Talk Time Kept Rate

Input Metric with Static
a
Inventory Study
Static
The puzzle got solved moment
Static inventory was introduced
in the equation
Promises Taken
Contacts
Non Productive Hours Analysis
The work in any calling process is split into 2 major heads which are Call time and After Call work (ACW). The times were analyzed to ascertain where
majority of the time was being spent
Open account and End the Open Next

review details call account
Preview Time Talk Time Wrap Time Idle Time
Call the customer Finish after

call work
39%
28%
21%
12%
Talk Preview Wrap Idle
Inference:
• 49% time spent on Wrap and Preview activities
• Reduction in the Non prod hours will enable agents to spend more time speaking to customers (Value Added)
thereby resulting in higher resolutions
Calls/Hr versus Cure Rate
Study of impact of Calls/hour on Cure Rate to determine if efficiency metric impact the Project metric
One-way ANOVA: Cure versus Calls/hr Segment

Boxplot of Cure
0.50 Source DF SS MS F P
Calls/hr Segment 2 0.00175 0.00087 0.52 0.598
Error 28 0.04671 0.00167
Total 30 0.04845
0.45
S = 0.04084 R-Sq = 3.61% R-Sq(adj) = 0.00%
Cure
0.40 Individual 95% CIs For Mean Based on

Pooled StDev
Level N Mean StDev -+---------+---------+---------
+--------
0.35
High 23 0.37191 0.04107 (-----*-----)
Medium 5 0.36681 0.04395 (-----------
*------------)
Very Low 3 0.34639 0.03053 (---------------
0.30
*----------------)
High Medium Very Low -+---------+---------+---------+--------
Calls/hr Segment 0.300 0.330 0.360 0.390
Inference:
Since P Value is > 0.05, Mean Cure Rate is not significantly different based on Calls/hour segmentation
Agent & Weekly Outbound Calls
Study of how number of calls varies by agents
One-way ANOVA: OC Calls versus Full Name

Source DF SS MS F P
Full Name 14 2634576 188184 8.68 0.000
Error 176 3815575 21679
Total 190 6450151
S = 147.2 R-Sq = 40.85% R-Sq(adj) = 36.14%
Level N Mean StDev
Alka Mahendra Tiwari 5 347.2 82.4
Aloysius Chettiar 5 428.0 119.0
Arti Shete 5 85.4 47.5
Babu S. Palek 18 316.1 120.0
Bhavneet Chhina 16 458.2 186.4
Francis Paul 17 306.0 118.4
Jennifer Chettiar 17 395.1 160.6
Mayur Manohar Kesarkar 12 455.8 130.6
Monica Shah 18 525.9 133.6
Nikita Kamlesh Gandhi 14 414.9 182.1
Oscar Patel 16 624.1 182.1
Riana Colaco 14 520.0 168.3
Sheetal Yadav 5 278.8 81.1
Sohil Pravin Vazir 11 302.8 127.7
Sunil Jagadhane 18 557.6 141.9
Pooled StDev
Level --+---------+---------+---------+-------
Alka Mahendra Tiwari (-----*------)
Aloysius Chettiar (-----*------)
Arti Shete (-----*------)
Babu S. Palek
Bhavneet Chhina
(---*--)
(---*---)
Inference:
Francis Paul (--*---)
Jennifer Chettiar
Mayur Manohar Kesarkar
(---*--)
(---*---)
• Since P value is <0.05 we can conclude that number of
Monica Shah (--*---) outbound calls made by agents is significantly different from
Nikita Kamlesh Gandhi
Oscar Patel
(---*---)
(--*---)
each other
Riana Colaco (---*---)
Sheetal Yadav
Sohil Pravin Vazir
(------*-----)
(---*----)
• This can be attributed to type of inventory encountered as
Sunil Jagadhane (---*--) well as lack of usage of best practices to keep Wrap and
--+---------+---------+---------+-------
0 200 400 600
Preview time (Off call work) to minimum
Agent & Weekly Attempts
Study of how number of attempts varies by agents
One-way ANOVA: Attempts versus Full Name

Source DF SS MS F P
Full Name 14 3151138 225081 6.57 0.000
Error 181 6196891 34237
Total 195 9348029
S = 185.0 R-Sq = 33.71% R-Sq(adj) = 28.58%
Level N Mean StDev
Arti Shete 5 108.2 60.1
Babu S. Palek 18 405.0 143.1
Monica Shah 18 612.0 166.4
Oscar Patel 16 687.3 201.1
Pooled StDev
Level --+---------+---------+---------+-------
Alka Mahendra Tiwari (-----*------)
Aloysius Chettiar (-----*------)
Arti Shete (-----*------)
Babu S. Palek (--*---)
Bhavneet Chhina (---*--)
Francis Paul (--*---) Inference:
Jennifer Chettiar (---*--)
Mayur Manohar Kesarkar (---*---)
Monica Shah (--*---) • Since P value is <0.05 we can conclude that the attempts
Nikita Kamlesh Gandhi
Oscar Patel
(---*---)
(--*---)
made by the agents is significantly different from each other
Riana Colaco (---*---)
Sheetal Yadav (-----*------) • This can be attributed to type of inventory encountered as
Sohil Pravin Vazir (--*---)
Sunil Jagadhane (---*--) well as lack of usage of best practices to keep Wrap and
--+---------+---------+---------+-------
0 250 500 750
Preview time (Off call work) to minimum
Agent & Weekly Contacts
Study of how contacts made with customers varies by agents
One-way ANOVA: Contacts versus Full Name

Source DF SS MS F P
Full Name 14 11353 811 5.18 0.000
Error 175 27399 157
Total 189 38752
S = 12.51 R-Sq = 29.30% R-Sq(adj) = 23.64%
Level N Mean StDev
Arti Shete 5 16.00 11.22
Babu S. Palek 18 39.06 14.42
Monica Shah 18 44.56 14.22
Oscar Patel 16 43.75 11.95
Pooled StDev
Level -------+---------+---------+---------+--
Alka Mahendra Tiwari (------*------) Inference:
Aloysius Chettiar (------*------)
Arti Shete (-------*------)
Babu S. Palek (---*---) • Since P value is <0.05 we can conclude that the agent
Bhavneet Chhina (---*---) contacts are significantly different from each other
Francis Paul (---*---)
Jennifer Chettiar (---*----)
Mayur Manohar Kesarkar (----*---) • Contacts are a function of time customer was contacted as
Monica Shah (---*---) well as customer willingness to answer call post viewing
Nikita Kamlesh Gandhi (---*---) number on his cell which he might know is a Collections
Oscar Patel (---*---)
Riana Colaco (----*---) call (as it shows as Private Number)
Sheetal Yadav (------*-------)
Sohil Pravin Vazir (----*----) • Initiate analysis on Best Time to call as well as request
Sunil Jagadhane (---*---)
-------+---------+---------+---------+-- client to unmask numbers when calling
15 30 45 60
Agent & PTPs Taken
Study of how number of promises taken varies by agents
One-way ANOVA: PTP Taken versus Full Name

Source DF SS MS F P
Full Name 14 11889 849 6.79 0.000
Error 195 24403 125
Total 209 36292
S = 11.19 R-Sq = 32.76% R-Sq(adj) = 27.93%
Level N Mean StDev
Arti Shete 5 8.40 6.11
Babu S. Palek 18 32.89 9.93
Monica Shah 18 40.33 13.15
Oscar Patel 18 26.06 10.25
Pooled StDev
Level -+---------+---------+---------+--------
Alka Mahendra Tiwari (-----*-----)
Aloysius Chettiar (-------*-------)
Arti Shete (-------*-------)
Babu S. Palek (---*----)
Bhavneet Chhina (---*----) Inference:
Francis Paul (---*----)
Jennifer Chettiar (---*----)
Mayur Manohar Kesarkar (----*----) • Since P value is <0.05 we can conclude that the agent PTP’s
Monica Shah (----*---) are significantly different from each other
Nikita Kamlesh Gandhi (----*----)
Oscar Patel (----*---)
Riana Colaco (----*----) • Differences in negotiation skills and closure of discussion leading
Sheetal Yadav
Sohil Pravin Vazir
(-------*-------)
(---*---)
to
Sunil Jagadhane (----*---) variation
-+---------+---------+---------+--------

0 12 24 36 • Best practice sharing to be initiated
Agent & PTPs Kept
Study of how number of promises taken varies by agents
One-way ANOVA: Sum of Promises Kept versus Full Name

Source DF SS MS F P
Full Name 14 4748.4 339.2 8.39 0.000
Error 195 7879.8 40.4
Total 209 12628.2
S = 6.357 R-Sq = 37.60% R-Sq(adj) = 33.12%
Level N Mean StDev
Arti Shete 5 4.600 3.050
Babu S. Palek 18 19.722 6.057
Monica Shah 18 23.333 7.993
Oscar Patel 18 13.889 6.087
Riana Colaco 14 13.714 4.983
Pooled StDev
Level -+---------+---------+---------+--------
Alka Mahendra Tiwari (-----*-----)
Aloysius Chettiar (-------*-------) Inference:
Arti Shete (-------*-------)
Babu S. Palek (---*---) • Since P value is <0.05 we can conclude that the promises
Bhavneet Chhina (----*---)
Francis Paul (---*---)
kept
Jennifer Chettiar (---*---) for agents is significantly different from each other
Mayur Manohar Kesarkar (----*----)
Monica Shah
Nikita Kamlesh Gandhi (----*----)
(---*----) • Kept promises are highly dependent on customers but
Oscar Patel (---*---) agents showcased variations in taking good promises and
Riana Colaco (----*---) also setting up follow
Sheetal Yadav (-------*-------) ups
Sohil Pravin Vazir (---*---)
Sunil Jagadhane (----*---)
-+---------+---------+---------+--------
0.0 7.0 14.0 21.0
Cure Rate vs Process Knowledge
Study of how process knowledge impacts Cure Rate. Process knowledge scores were considered for analysis
One-way ANOVA: Cure Rate versus Process Score

Boxplot of Cure Rate
Source DF SS MS F P
0.400 Process Score 3 0.00342 0.00114 0.59 0.624
Error 41 0.07906 0.00193
0.375
Total 44 0.08248
S = 0.04391 R-Sq = 4.15% R-Sq(adj) = 0.00%

0.350
Cure Rate
0.325
Level N Mean StDev
0.300 40 and above 9 0.33222 0.04055
Between 20-30 18 0.33000 0.04472
0.275 Between 30-40 7 0.30857 0.03078
Less than 20 11 0.31727 0.05120
0.250
Individual 95% CIs For Mean Based on Pooled
StDev
40 and above Between 20-30 Between 30-40 Less than 20 Level +---------+---------+---------+---------
Process Score 40 and above (-----------*-----------)
Between 20-30 (-------*-------)
Between 30-40 (------------*-------------)
Less than 20 (----------*----------)
+---------+---------+---------+---------
0.275 0.300 0.325 0.350
Inference:
• Since P value is >0.05 we can conclude that the process knowledge for agents does not impact Cure performance.
CureC Rate V/s Customer Demographics
Study if Cure Rate gets impacted by type of employment of a customer Study if Cure Rate gets impacted by Status of employment of a customer
Chi-Square Test: Cured, Not Cured vs Type of Chi-Square Test: Cured 1, Not Cured1 vs
Employment (Salaried/Self Employed) Employment status (Employed/Unemployed)
Expected counts are printed below observed counts Expected counts are printed below observed counts
Chi-Square contributions are printed below expected Chi-Square contributions are printed below expected
counts counts
Cured Not Cured Total Not

Self Employed 20 30 50 Cured1 Cured1 Total
24.00 26.00 Employed 32 18 50
0.667 0.615 26.50 23.50
1.142 1.287
Employed 28 22 50
24.00 26.00 Unemployed 21 29 50
0.667 0.615 26.50 23.50
1.142 1.287
Total 48 52 100
Total 53 47 100
Chi-Sq = 2.564, DF = 1, P-Value = 0.109
Chi-Sq = 4.857, DF = 1, P-Value = 0.028
Inference: Inference:
Since P value is >0.05 we can conclude that the Type • Since P value is <0.05 we can conclude that the Employment
of employment (Salaried/Self Employed) does not impact status (Employed/Unemployed) does impact
cure performance Cure performance
• Segregate inventory by employment status
• Assign better negotiators to such inventory
Summary of Analysis (1 of 2)
Analysis Tool Used Inference/Observation Recommendation
Brainstorming to Ishikawa Diagram Probable X’s found NA
find probable
reasons for Low PROCESS
Hardship customers become

skip af ter 1 or 3
Systems
Technology
Cure Rate BI availability Pacing of Dialer

Masked Numbers month moratorium
No call back No Real

on Lef t Message time monitoring
Dialer stamping on System Latency
accounts without connects being made
Unavailability of Voicemail
for inbound lines
Low Cure
Employment Rate
status
Process Low F inancial Behavior –

Knowledge Calls / Hour Time of call Spending and
Payment Habits
Dialer Manual
Ef fectiveness split
High
Wrap and Incentive Model
Availability of Education
Preview Time
Home/Of fice numbers
Account Level Ownership
Skip Skills
Salaried / Self Employed
People Customer
Measurement
To study correlation Correlation • No correlation observed of Input • Investigate reasons of Input

between Cure and Metrics with Cure. metrics not impacting cure
various Input
Scatterplot of Cure vs PTP Rate
• Prompted team to think and • Collect data and analyze
Metrics like 0.50 investigate further correlation with Static
Contacts, PTPs 0.45
percentage
Cure
0.40
0.35
0.30
0.90 0.95 1.00 1.05 1.10 1.15
PTP Rate
Study correlation Matrix Plot • Strong correlation observed All trends as expected.
between X’s to between Talk time and Contacts Expected correlations meant all
understand how Matrix Plot of Contacts, Talk Hrs, ... vs Contacts, Talk Hrs, ...
and further between Contacts and input metrics were in control and
one input metric 7000
800 1200 1600 3000 4500 6000 0.04 0.08 0.1 2
PTPs moving as expected
Contacts
interacts with other • Stable trend of Kept rate and PTPs It further increased the issue of
5000
3000 1600
Talk Hrs
1200
800
these metric not correlating to

Wrap Hrs
600
400
Cure at all
200
6000
PTP
4500
3000
PTP Kept Contact RateContacts/Hr
3.2
2.4
1.6
0.12
0.08
0.04
4000
3000
2000
3000 5000 7000 200 4 00 600 1.6 2.4 3.2 2000 3000 4000
Contac ts Talk Hrs Wrap Hrs PTP Contacts/Hr Contact Rate PTP Kept
Summary of Analysis (2 of 2)
Analysis Tool Used Inference/Observation Recommendation
Study split of time spent by Bar Chart Non Value Added time Introduce good Wrap and Preview practices
agents (Wrap+Preview) constitutes 49% of and track the times to increase Talk hours
total time Talk hours is a driving factor for PTPs and
hence Kept
Study if Cure Rate gets Box Plot, ANOVA Cannot be concluded that Not Applicable
impacted by number of calls Calls/hour impacts Cure Rate
made per hour
Study variation in Attempts Box Plot, ANOVA Attempts by agents differ Share best practices between top and average
made by Agents performers
Study variation in Contacts Box Plot, ANOVA Number of Contacts differ by agents Best Practice Sharing/ Mentoring
made by Agents
Study variation PTPs by Box Plot, ANOVA Number of PTPs taken differs by Best Practice Sharing/Mentoring
agents agents
Study variation in Kept Rate Box Plot, ANOVA Number of Kept Promises differs Best Practice Sharing/Mentoring
by agents significantly by agents
Study Variation in Cure Rate Box Plot, ANOVA Cure rate does not differ by Age of Not Applicable
by Age agents
Study dependence of Type Chi Square Test Cure Rate is independent of Type of Not Applicable
of Employment on Cure Employment
Rate
Study impact of Chi Square Test Cure Rate is dependent on Segregate inventory by employment status
Employment status Employment status of customer Assign better negotiators to such inventory
(Emp/Not Emp) on Cure
Key Solutions Implemented
S.
No Root Cause Addressed Recommendation Description
This principle is basically assigning weightage to different type

of flows. For example if an account in bucket 2 is to be cured,
Introduction of New Scoring then 3 due payments have to be collected- hence we will assign
1 structure for Incentives called
ABS (Average Balances Saved) a multiplier of 3 for every balance that is cured in bucket 2,
• Agents taking a Single similarly we will assign multipliers to different flows at all the
Payment to keep PTPs high levels
• Static Inventory higher than
Cured Inventory
Split of Incentive amounts to A new Incentive split was introduced where top 20% of the
2 performers take away 50% of the total Incentive amount
drive performance This drives associates to be at top performance
The dialer team logs into an automated Dialer system and the
time they spend on the system is divided into productive and
High amount of time spend in Reduction in Non Productive Non-productive. Non-productive time includes the time spent
3
Wrap and Preview activities Hours on Wrapping the calls and the time spent on previewing the
accounts before making a call. This non-productive time is very
high and needs to be reduced.
Best Practice Sharing between Analysis showed that agent performance differs significantly.
Associates
4 Variation between agents on Best Practice sharing was initiated and TLs were asked to
PTPs, Kept Rate etc. Skill Based allocation of mentor the agents in order to reduce agent to agent variation
in performance
accounts
Segregate inventory by
Cure Rate impacted by employment status of the Inventory to be segregated by employment status of the
5 employment status of customer. 100% segregation customer. If a customer is unemployed currently assign better
negotiators to the accounts who can explain the impact of
customers not possible so agent to tag delay and offer plans on the same.
accounts
Key Solutions Implemented- Adjusted Balances Saved
Solution: Adjusted Balances Saved Methodology for performance measurement whereby team targets were shifted from Number of
promises taken and Kept to ABS points
Overdue Balances r Applicable weights = Adjusted Overdue

balances
Target Cure% Outcome

ABS Target
3
Total Estimated Full payment

receivables in a bucket collected Lower Static
Higher Cure
Target Static%
Assign
1 Weights
To
Each By Assigning
Minimum due Weightages to each
Target for the portion
collected resolution segment
collectors to be
with the highest
derived from the total Target Roll back% Results in a shrinking
weight to Cure, the
outstanding Balances Delinquency Base of
chances of meeting
in a bucket customers, resulting a
target are higher when
much lower roll losses
2 collectors cure more
accounts
Partial Payment
collected
Key Solutions Implemented- Reducing Non Productive hours
Initiatives to reduce Non-Prod hours
Call listening with screen 5-point checklist for

recordings to showcase agents to reduce their
examples of good wrap wrap time
practices and bad wrap
practices
Emphasis on Preview time Inclusion of Preview Rate

target of 15 seconds in the incentive document
(preview time) per for Dialer teams.
account
Wrap Target of 10%set for
Reducing the qualifier for incentives
Wrap Rate from 23% to
15% for M1
Key Solutions Implemented- Revised Incentive Structure
Introduction of Break Up of Incentives
Purpose
To create an Rationale Solution
incentives model
which drives The incentives A New
competition within a structure had incentives
team and gives Payout structure was
maximum incentives
to the top depending on developed,
performers an individual’s using stack
Need for an performance. ranking
incentives model
which not only The payout methodology.
promotes an was made Performance
individual’s basis the were
performance but also
compares it with the band wise segregated
other associates in kitty. into 4 Bands
the team.
Top
20%
50%
Kitty
Level2- Next 25%
30% Kitty
Level 3- Next 25%

20% Kitty
Level 4- Next 30%

No Payout
Benefits Achieved- Improvement Validation
Control chart to depict Cure Rate performance was plotted to depict improvement in the metric
I Chart of Cure Rate1 by Phase

Preview% reduced to 14% and wra
Pre Project Initiation Quick Win Post Project % reduced to 9%
0.55
UCL=0.5315
0.50
_
0.45 X=0.4519
Individual Value
0.40
LCL=0.3723
0.35
0.30
Cure% increased from
36.04% to 45.19% by
1 5 9 13 17 21 25 29 33 37 41 Dec’14-Jan’15. Delivered the
Observation highest ever cure in Feb
2015 at 51.73%
Two-Sample T-Test and CI: Cure Rate1_1, Cure Rate_2 The improvement translated
in annual savings of
Two-sample T for Cure Rate1_1 vs Cure Rate_2 Australian $4.68MM in Roll
Losses
N Mean StDev SE Mean
Cure Rate1_1 31 0.3666 0.0355 0.0064
Cure Rate_2 11 0.4519 0.0217 0.0065
Roll Forward% reduced from
17.43% in Sep 2013 to 14.17%
Difference = mu (Cure Rate1_1) - mu (Cure Rate_2) in Dec 2014. Delivered the
Estimate for difference: -0.08527 lowest ever roll forward rate in
95% CI for difference: (-0.10393, -0.06661) Nov 2014 at 13.84%
T-Test of difference = 0 (vs not =): T-Value = -9.35 P-Value = 0.000 DF = 29
- 36 -
Benefit- Business and End Customer Benefit
45%
Cure Rate
35%
$160MM
Business
Benefits
Business
Benefits
$ 80MM $ 4.68MM
Delinquent Inventory Reduction
Credit Loss Prevention by
by 50%
$4.68MM
What can be added to the happiness

Customer
End Customer
of a Man who is in good health, has a

Benefit
Benefit
clear conscience and is
Out of Debt!!
End
Lesser customers in Debt - Adam Smith, Philosopher

Control Plan
SNo Action Item What is being Control/Audit Mechanism Owner

controlled
• TLs to ensure that checklist is adhered to

1
Reduction in Non Wrap and • Random call listening to be initiated to keep a check on xxxx
Productive Hours Preview Time agents
• Project lead to ask for reports from TLs
Implementation • All KPIs shifted to ABS from Promise Rate based metrics
2 ABS
of ABS • Score cards updated xxxx
• MIS team creates Incentives based on ABS methodology
Incentive • MIS team to ensure Incentives are allocated using the new
Allocation of split
3 allocation based xxxx
Incentives
on ABS scores • No agent wise Promise Rate available to Incentive
preparation team
Best Practice
sharing to reduce Ensure Best • Online Best practice repository created
4 agent Practices are • Best Practice questions included in Process Tests xxxx
performance shared • Quality team/TLs to do spot checks
variation
Specific agents Agents get • MIS team prepares allocation schedule

5 assigned to assigned to • Compliance team given responsibility to do spot checks xxxx
specific accounts specific accounts
Customer/Client Speak
Thank you XXXX for Thanks XXXX for
helping me understand I was explained all the explaining all charges
the balances and charges and reasons for on my card.
charges and for being the same. I was offered
polite all through  I have never had such a
waive off when I agreed positive collections call
to make payment. 
Delighted
Accountant
Media Professional Storekeeper
Amazing work done by Team has always

project team. The brought value to
analysis is relevant and Good work. Well done our business
has been able to and Keep it up!
pinpoint business issues We expect such
value adds to keep
Devising a new metric coming
to link operational and Head Credit Ops
business performance
was exceptional
Replicate for other
buckets
Client
Head- Collections End Customer

Improve Cure Rate in Credit Card Collections

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Improve Cure Rate in Credit Card Collections

Uploaded by

Copyright:

Available Formats

Lean Six Sigma Project - Sample

Improve Cure Rate in Credit Card Collections

Saturday, October 10, 2020

Head, Credit Operations

Cure Rate or Account Resolution Engagement

Roll Back Cure Roll Forward Static

where entire accounts which

Promise to Pay Promises Kept

Contact Rate Contact Reach Calls Made Skip Effectiveness

Customer Out of Collections

Cure Cure Cure Cure Cure Cure

Roll Roll Roll Roll Roll Roll

Static Static Static Static Static Static

Project Leader XXXXX Project Champion XXXXX Project Mentor XXXXX

Team Members XXXX Process Owner XXXX Project Sponsor XXXXX

BUSINESS CASE PROJECT SCOPE INCLUDES

Update customer credit

The data received from Business Intelligence reports generated Billing

The report is one version of truth across the bank

Measure Data type What Frequency Source Period

Null and alternate hypothesis

0.32 0.36 0.40 0.44 0.48

cured hence the spike UCL=0.4708

Process Capability of Cure

0.28 0.32 0.36 0.40 0.44 0.48

Hardship customers become

No call back No Real

Inadequate Different payment habits of No account level ownership

5 Unavailability of Voicemail Ask client to introduce voicemail for Inbound NA NA NA

Promise Rate Contacts

Talk Hours observed Wrap Hours

Contacts Rate Kept Rate

Investigate Time spent on

• Critical but expected correlations emerge from the Matrix plot

Talk Time Kept Rate

Pearson correlation of Kept Promise and

Process Key Performance Indicators

One-way ANOVA: Static Rate versus Kept Promises

Pooled StDev = 0.04562

Talk Time Kept Rate

Open account and End the Open Next

Preview Time Talk Time Wrap Time Idle Time

Call the customer Finish after

Talk Preview Wrap Idle

One-way ANOVA: Cure versus Calls/hr Segment

0.40 Individual 95% CIs For Mean Based on

One-way ANOVA: OC Calls versus Full Name

One-way ANOVA: Attempts versus Full Name

One-way ANOVA: Contacts versus Full Name

Study of how number of promises taken varies by agents

One-way ANOVA: PTP Taken versus Full Name

Pooled StDev = 11.19

Study of how number of promises taken varies by agents

One-way ANOVA: Sum of Promises Kept versus Full Name

One-way ANOVA: Cure Rate versus Process Score

S = 0.04391 R-Sq = 4.15% R-Sq(adj) = 0.00%

Pooled StDev = 0.04391

Cured Not Cured Total Not

Hardship customers become

Cure Rate BI availability Pacing of Dialer

No call back No Real

Process Low F inancial Behavior –

To study correlation Correlation • No correlation observed of Input • Investigate reasons of Input