Credit Card

Problem:

he global financial crises that hit the world in 2008 halted the market especially the credit companies. It was expected that these companies would become more cautious to take risks in a year of uncertainties.   In the other hand, in case no action taken the Marketing and Sales certainly would be seriously affected.

Strategy and Methodology:

In the late of 2008, when the trends analysis started to indicate difficulties in reaching the goals established for the loans sales, the teams of our customer, a credit bureau and a technology provider company joined in the search of an alternative for the problem.

By using the bureau historical databases enriched with the client’s information, the bureau models development area designed custom-made models to predict not only the risk but also the propensity to consume through the combination of clustering and regression techniques. Several models were designed and exhaustively tested with the back test procedures developed by the technology provider company for the choice of the most efficient model in terms of profitability.

Performance was essential to that situation, and in February 2009 all the sales process had been modified into the new technology in order to minimize the impacts expected therefrom.

Results:

The annual sales goal was accomplished, and the total sales amounted to approximately R$ 7 million less than the total cost that would be incurred to sell the same amount of product without using the model. This result was calculated from the control groups used in each action.

The return rate was increased by around 300% in comparison to the return rate of the control population.

The first results allowed the continuation  of the level of sales of personal loans throughout the year, in contrast to some competitors who had to slow down the sales in the period.