Diploma in Consumer Credit Risk Management

Unit 04 Collections Segmentation and Strategies

Element 4.1: Segmentation

Learning Outcomes:

What the candidate must do:

4.1.1 Discuss the need for segmentation

4.1.2 Determine the priority for action

What the candidate must know:

4.1.3 The reasons for segmentation

4.1.4 How to prioritise accounts for action

Element 4.2: Basic strategy design

Learning Outcomes:

What the candidate must do:

4.2.1 Tilt a strategy

4.2.2 Determine the approach to high risk and balance accounts

What the candidate must know:

4.2.3 The concept of strategy

4.2.4 The concept of tilting

4.2.5 The concept of triage

Element 4.3: Collections scoring

Learning Outcomes:

What the candidate must do:

4.3.1 Discuss problem characteristics

4.3.2 Discuss scorecard definitions

4.3.3 Identify the powerful characteristic

What the candidate must know:

4.3.4 What characteristics to beware of

4.3.5 How development samples are determined

4.3.6 How to recognise powerful characteristics

Element 4.4: Strategy testing

Learning Outcomes:

What the candidate must do:

4.4.1 Determine good and bad strategies

4.4.2 Review a case study

4.4.3 Calculate the required sample size

What the candidate must know:

4.4.4 The principles of strategy testing

4.4.5 The importance of planning

4.4.6 How to test for significance

Element 4.5: Performance metrics

Learning Outcomes:

What the candidate must do:

4.5.1 Consider what drives performance

4.5.2 Discuss cash collected as a metric

4.5.3 Complete a Balanced Scorecard

What the candidate must know:

4.5.4 How agent performance compares with strategy performance

4.5.5 Drivers of performance

4.5.6 How to measure agent performance

Element 4.6: Roll rates

Learning Outcomes:

What the candidate must do:

4.6.1 Calculate roll rates

4.6.2 Read a Markov Chain output

4.6.3 Discuss ultimate losses

What the candidate must know:

4.6.4 How roll rates are calculated

4.6.5 Types of roll rate

4.6.6 How to use and interpret true roll rates

Element 4.7: Tracking strategies

Learning Outcomes:

What the candidate must do:

4.7.1 Calculate the efficiency of a strategy

4.7.2 Evaluate the best strategy

4.7.3 Determine the strategy score band

What the candidate must know:

4.7.4 The recovery vs costs trade-off

4.7.5 How to evaluate strategies

4.7.6 How to test score ranges

Element 4.8: Advanced strategies

Learning Outcomes:

What the candidate must do:

4.8.1 Determine the next action

4.8.2 Discuss reasons for customer centric approaches

4.8.3 Determine the combination of multiple collection scores

What the candidate must know:

4.8.3 How to build �promise to pay� strategies

4.8.4 How to consider recoverability

4.8.5 The reason for and options for customer centric collections