Case Study: Shop Direct reduces provisions and cuts collections costs with FICO Xpress Optimization and FICO Debt Manager

Shop Direct Prioritizes the Customer Throughout the Collections Lifecycle

Shop Direct, the UK’s largest integrated pure-play digital retailer and financial services provider, set out to overhaul its collections approach to put customers at the center of every interaction. Confronting behavioral biases in its champion/challenger contact strategies and high provisions from its revolving credit product, the company sought a faster, analytics-driven way to make sustainable repayment plans and reduce losses.

Partnering with FICO, Shop Direct deployed FICO Xpress Optimization and FICO Debt Manager to build action-effect models and orchestrate seven tailored collections treatments based on scores, balances and real-time data. The new strategy cut the provision number by 2.9%, reduced collections operational costs by 7.5% (freeing resources for technology innovation), and improved roll performance—41 bps better overall Roll Better and a 69 bps improvement in Roll Worse test performance.

Shop Direct

Mark Harrison-North

Head of Credit Risk