Financial hardship is where a customer experiences difficulty in paying the repayments on loans and debts.
This occurs typically when individuals have a change to their personal circumstances, and find it hard to keep up with their repayments. In most circumstances this can be outside of their control. Examples include job loss, divorce, mental or general health issues
The challenge was to find innovative ways of predicting a customer’s financial hardship (before a customer declared hardship) and provide insights of typical customer profiles related to it.
AugustAï processed millions of transactions, and thousands of variables to automatically create a machine learning model in a matter of hours that predicts customer financial hardship.
Provided our client the ability to understand the customer profiles and key drivers for financial hardship
Allowed personalised support mechanisms to be put into place, and facilitated an update in generic contact strategies where predictive insights were present
Regulatory support for exploring an innovative approach to supporting vulnerable customers
A machine learning model that is 13 times more likely to detect a customer in hardship.
The model captures 13% hardship requests in just 1% of the model predictions.
Provided the client an ability to offer payment plans to its customers to lower the rate of customer financial hardship.