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Recovery Strategies


To help prioritize accounts for collection efforts by identifying the ones having the highest recovery potential, thereby optimally allocating collection efforts and maximizing recoveries.

Background and Challenges

Due to economic recession and increased default rates in credit card industry, written-off portfolios are piling up every day. Banks are digging deeper into their books of written-off Consumers to hunt for recovery potential.

The bank wanted to have a recovery propensity scorecard on their written-off portfolio to help them run a targeted recovery campaign.

Our Approach

The data provided by the bank was mainly profile rich. In order to identify the Consumer behavior, transaction data and calling history are also needed. We started by profiling of the Consumers. We used past one-year data for our analysis. The bank provided us the complete charge off portfolio of last one year along with the details of the settlement cases.

Various Good/Bad scenarios were considered based on the payment propensity and settlement propensity of the entire debt pool. The final scorecard evaluated the payment propensity amongst fresh charge-offs.


  • Success will defined by the event of any payment (Rs. 2000 or more) within the next 6 months of charge-off
  • Indeterminate: If the account makes payment less than Rs. 2000/-


  • If the account makes no payment
  • Different statistical techniques were used to identify the important attributes that help in identifying the potential settlement cases. Some of the fields that came important for the predictive model were-
  • Number Of Times The Account Has Been In Bucket 5 (120-150 DPD) in The Last 6 Months
  • Difference Between Last Purchase And Last Payment
  • If the account makes no payment
  • Time Since Last Payment

Results and Implementation

Using our analysis, each Consumer was given a score and the portfolio was divided into ten segments of Consumers with varying propensities to pay. The bank then designed design their recovery campaigns for each of these segments with Consumers in higher segments are targeted with higher intensities and optimal settlement offers.

This has allowed the bank to tap 80 % of their potential Consumers in 20 % of the segments thus saving on costs with improved focus. The exercise is carried on 25th of every month and the revised segments are attempted for recovery in the subsequent months.