three essentials for successful point-of-sale credit line management

At every point-of-sale transaction, shoppers today are just as likely to be carrying their mobile devices as they are their wallets. For credit card issuers looking to safely increase customers’ credit limits and strengthen relationships, the ubiquity of mobile turns every point-of-sale transaction into a valuable moment in time. Rather than just authorize a purchase by any customer nearing or exceeding their credit limit, using mobile channels—SMS, automated voice, mobile apps and email—issuers can immediately communicate line increases and other offers that drive higher profitability and deeper loyalty.

Line increases and services communicated to customers in real-time, when they’re out shopping and in “buying mode,” have a greater chance of being accepted and positively affecting relationships than when offered through random marketing offers. Mobile, combined with communications technology that enables intelligent customer engagement and automated contact, opens the door for issuers to take a variety of favorable actions with customers during or immediately following a transaction. For example, depending on a customer’s qualifications, issuers might:

• Authorize an over-limit transaction and offer the customer a line increase (and use mobile for the application process and income verification).

• See that a customer is nearing their limit, and that successive transactions within a limited time indicate that the customer is out shopping, and offer an increase prior to the customer exceeding their limit.

• Authorize an over-limit transaction, and immediately afterwards inform the customer of the authorization as a demonstration of goodwill.

• Direct customers to enroll in an overdraft protection program, thereby generating additional revenue.

The success of this type of communications is contingent upon technology that can support three essential capabilities. One is the ability to execute automated communications in real-time. The second is use of multi-channel communications, and the ability to determine each customer’s preferred channel. The third is the ability to perform the communications to scale—to keep up with any volume of transactions and line management communications requirements at any time.

www.fico.com Make every decision countTM

Three Essentials for Successful Point-of-Sale Credit Line Management

Credit Line Increase Offers*

2x

20132012

1x

*2013 FICO Benchmark Reporting Service Study.

©2014 Fair Isaac Corporation. All rights reserved. page 2

Essential #1: Real-Time Communications

Other than handling incoming customer calls, the infrastructure of call centers is not designed for real-time customer engagement. Whereas call centers are useful for having agents work queued lists of accounts for various purposes, effective point-of-sale line increase programs require technology that can deploy real-time, automated communications in response to in-stream events. That involves decision technology for analyzing and deciding on the increase, followed by communications technology for determining contact information and automating a connection. Issuers need technology to analyze and decide on an increase, but they also need technology to act on and resolve an increase—together in real time.

For example, when a customer makes a purchase, an issuer’s customer decision management platform—such as FICO® TRIAD® Customer Manager—will perform an authorization. However, immediately following an authorization the issuer can use its decision management technology—including business rules and analytics—to automatically evaluate those customers nearing or exceeding their credit limit for an increase. In seconds, upon deciding to offer the increase, data regarding the offer can be sent in a file to a customer communications technology platform (such as FICO® Customer Communication Services) which matches customer contact information to the data and automatically makes contact with the customer and communicates the offer.

Real-time contact in making line increase offers is likely to drive the greatest take-up rates. However, issuers can also use the combination of customer decision management technology and customer communications technology in a nightly batch mode, triggered by accounts that have come within a particular threshold of their credit limit from recent transactions.



Essential #2: Multi-Channel Customer Communications

Essential #3: Scalability

©2014 Fair Isaac Corporation. All rights reserved. page 3



As part of the real-time process, it’s also essential to determine the best mobile channel and messaging to successfully connect with and engage the customer. An effective point-of-sale line increase program requires issuers to create omni-channel communications based on rules and sophisticated analytics. With analytics issuers can determine whether a customer prefers contact through text, voice script, a mobile app or email. Based on analysis of past contact data at an aggregate level—how customers in general have shown preferences for types of channels related to types of communications or offers— as well as analysis of past contact data for each particular customer, issuers can then select the channel and messaging most likely to generate a connection and response from the customer. In addition, a strategy with a tiered, chronological approach to customer contact using different channels can be developed. It’s also essential for the technology to provide a feedback loop of results data for ongoing learning and improved actions.


The degree of success achieved in a point-of-sale line increase program will directly correlate to the issuer’s ability to make real-time offers to every potential line increase candidate, regardless of how large that population spikes to at any particular time. A call center only has so many agents. What happens when the number of line increase candidates increases, whether randomly or generated by other factors such as holidays or major sales events?

By contrast, with an advanced customer communications technology platform issuers can scale a virtual agent to immediately analyze and act on any number of transactions requiring line increase consideration. In addition to meeting demand, the technology enables issuers to reduce or eliminate the need to invest in staff during holidays and peak shopping periods. The benefits of automation also include more stable costs as you scale.




Email

Text

Auto-mated

Call (Voice)





For more information North America Latin America & Caribbean Europe, Middle East & Africa Asia Pacificwww.fico.com +1 888 342 6336 +55 11 5189 8222 +44 (0) 207 940 8718 +65 6422 7700 [email protected] [email protected] [email protected] [email protected]

FICO, TRIAD and “Make every decision count” are trademarks or registered trademarks of Fair Isaac Corporation in the United States and in other countries. Other product and company names herein may be trademarks of their respective owners. © 2014 Fair Isaac Corporation. All rights reserved.

4039EX 09/14 PDF

About FICO® Customer Communications Services

Today, with a renewed interest in generating profit from line increases, issuers can turn to FICO® Customer Communications Services to complement their credit line decision management with intelligent, informed interactions with customers. FICO Customer Communications Services, in conjunction with FICO® TRIAD® Customer Manager or other customer management technology, helps businesses support point-of-sale line increase programs with:

• Communications that are delivered when and how customers want them.

• The ability for a customer to report or verify income, in support of meeting Regulation Z.

• A way to increase the number of customer engagements with limited or even reduced budgets.

• Clear tracking of customer communications to help with compliance.

three essentials for successful point-of-sale credit line management

Technology