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Which types of decisions will improve your business benefits?

By: Roger Ahern

It’s been proven in practice many times that by optimizing decisions (through improved decisioning strategies, credit risk modeling, risk-based pricing, enhanced scoring models, etc.) you will realize significant business benefits in key metrics, such as net interest margin, collections efficiency, fraud referral rates and many more.  However, given that a typical company may make more than eight million decisions per year, which decisions should one focus on to deliver the greatest business benefit?

In working with our clients, Experian has compiled the following list of relevant types of decisions that can be improved through improvements in decision analytics.  As you review the list below, you should identify those decisions that are relevant to your organization, and then determine which decision types would warrant the greatest opportunity for improvement.

• Cross-sell determination
• Prospect determination
• Prescreen decision
• Offer/treatment determination
• Fraud determination
• Approve/decline decision
• Initial credit line/limit/usage amount
• Initial pricing determination
• Risk-based pricing
• NSF pay/no-pay decision
• Over-limit/shadow limit authorization
• Credit line/limit/usage/ management
• Retention decisions
• Loan/payment modification
• Repricing determination
• Predelinquency treatment
• Early/late-stage delinquency treatment
• Collections agency placement
• Collection/recovery treatment