ABN AMRO has 20 million consumer clients, ranks eighth in Europe and 13th in the world based on total assets and has more than 4,500 branches in 53 countries. In recent times, banks have seen an increasing level of delinquency in the dynamic consumer credit market, and are having to increase provisioning as a result. ABN AMRO itself saw a 30% increase in loan impairment from 2005 to 2006.

This increasing default rate put pressure on the collections operation to improve recovery rates and reduce write-off values. As part of the bank-wide project to overhaul the credit and risk systems following implementation of the Basel II programme, the bank recognised that the collections operation could make a significant contribution to improving impairment levels and managing provisioning levels.

The current early collections operation had been centralised into regional centres from a branch based operation and later into one centre. Some portfolios were still managed in the branches which had led to a sub-optimal approach. Staff were highly motivated but lacked specific collections experience and training, and were using a generic workflow management system without specific collections functionality. Therefore, a collections programme was started, aimed at improving the early collections activity by implementing a dedicated debt collection system, enhancing processes and operations and centralising the remaining decentralised operations.

ABN AMRO selected the Tallyman Debt Management solution from Experian Decision Analytics. This specialist collections management solution enables ABN AMRO to automate and streamline the collections process to collect more debt from a complete insight in the entire customer relationship. The solution integrates with the existing customer management solution, Probe SM, for a customer-centric approach. Tallyman uses behavioural scoring to create an accurate single customer profile and, using this understanding of the behaviour and motivations of the customer, it segments customers and assigns the most effective action path. This sophisticated decisioning is dynamic and updated daily to reflect the most recent activity, promise to pay and change in status.

“Improving our collections operation was a key part of our credit and risk strategy but we were restricted by operational and IT restraints,” remarked Martin van Loon, Senior Vice President, ABN AMRO.  “Experian was able to offer a dedicated collections solution which could be deployed rapidly and, just as importantly, deliver the business consulting skills and best practice experience to support its solid implementation capabilities. We have learned that IT projects can go fast but it is essential to have focus and a true partnership with the key vendors, as we have had with Experian. You just have to look at the results we have achieved, such as productivity up by 70% and provisioning levels reduced by more than 20%, to see the value that this project has given to ABN AMRO.”

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