Customer segmentation or Market Segmentation helps a company to segment or divide its customers in different groups relevant to the business. The key to any Customer Segmentation is to divide the customers into groups based on prediction on their value to the company and target each group with different strategy to maximize the profit or ROI.
To develop and maintain predictive solutions that scores all live accounts (meeting certain criteria*) in the portfolio every month on their propensity to get disconnected or bankrupt in the next six months time. This information is then used by the collections function for optimal collection efforts.
Our clients, a leading auto financing company in the United States was growing its portfolio inorganically through acquiring small and medium sized portfolios.
To output an ordered score which would discriminate the potential good accounts (accounts which have high likelihood of regular repayment) from the bad accounts (low propensity to repay) for the current and early delinquent (bucket 1 i.e.<30 DPD and bucket 2 i.e. <60 DPD) accounts. These scores were to be used for prioritization of collection actions/ efforts.
To develop an effective, easy to use auto loan credit assessment tool for a big auto dealership. In case of risky applications, the tool should be able to suggest ways to cover the credit exposure (e.g. higher down payment, high interest rate etc.)
Develop a default prediction scorecard solution to identify the predict the defaulters at the time application for loan.