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Toyota uses analytics to keep delinquent customers in their cars

Thor Olavsrud | March 29, 2016
Toyota Financial Services' Collection Treatment Optimization (CTO) program helps its collections agents optimize which borrowers to call to help reduce delinquencies and keep customers in their vehicles.

"Working with delinquent customers to keep them in their cars while working out payment options has helped Toyota avoid millions of dollars in losses," Bander says. "It's a win for our customers and a win for Toyota. Furthermore, it reduced our operating expense ratio by allowing Toyota to grow our portfolio by roughly 9 percent without adding collections headcount. This has also enabled us to tie future lending decisions to our collections abilities — putting more customers behind the wheel of a Toyota."

Bander notes his team is actively working on a project to deploy optimization into loan originations.

"The ultimate dream is you shouldn't have to go to the dealership to find out if you can get financing," he says. "You sit on your couch and find out if you can get a certain payment. After you find out, you can go to the dealership and finish."

In November of last year, an independent panel of experts awarded Toyota Financial Services the 2015 FICO Decision Management Award for Debt Management for the CTO program.

"The panel of judges was impressed by how Toyota Financial Services aligned its collections program with its corporate customer service philosophy," Philip Alexander, editor, Global Risk Regulator, one of the judges for the awards, said in a statement. "Rather than a tactical approach to collections, they are pursuing a long-term vision: to keep their customers in their cars."

 

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