This page contains a Flash digital edition of a book.
In Focus Commercial Credit


Looking forward


Last month, CCRMagazine spoke to Sanjot Gill, Group Head of Analytics at Arrow Global on how the company, and wider industry is working for the benefit of customers


Sanjot Gill Group Head of Analytics, Arrow Global


As the portfolio strategy and analytics function of the business, we see our role very much as being to build the platform for the sustainable success of the company and for our customers moving forward. With a large, listed company like Arrow Global, we clearly have customers, shareholders, and other stakeholders and getting the analytics right will help our work with all of these.


Consistent and measureable We use data analytics to help us understand customer circumstances and we have always found that consistency is key in this. Data has to be consistently gathered and


used, not only so that the customer journey can be constantly improved, but also so that it is measurable. If we consistently measure performance and feed that back into our modelling, then we can work towards optimisation in everything that we do.


Arrow’s journey I have been at Arrow in two spells over the past 10 years. In that time, we have grown hugely, but we were always built on the foundations that have allowed us to grow. From the beginning, we have always been


committed to getting the approach and strategies right. This meant taking a common- sense approach so that we were measuring and modelling the right factors accurately and thereby we could build a platform for success. Having these data points from a long time ago means that we can see why various things happened and what was the outcome of a given action. Today, everyone talks about taking this


approach in the industry, but you really need to have the consistency of data to make a success of it. It says a lot about the high level that we have reached that we are now working with the Maths Department at the University of Manchester. Such a partnership approach is key to us both externally and


16


If we consistently measure performance and feed that back into our modelling, then we can work towards optimisation in everything that we do


internally. For example, we feel that we bring different teams and departments together to work with each other, such as Finance, Operations, Forecasting, Collections Strategy, and Group Modelling. By this interaction, we can make sure that what happens at a customer level is brought in to the higher- level, sophisticated portfolio modelling.


Simulation approach Our Knowledge Transfer Partnership with the University of Manchester has really allowed us to move our modelling forward. Credit-industry organisations tend to take a


traditional approach to modelling consumer behaviour, for example on default rates and loss given default, but we believe we are taking a more sophisticated approach by employing account-level Monte Carlo simulation techniques.


www.CCRMagazine.com Now, over an extended period of time, we


can model who will pay when, how much, and whether they are going to settle the account. We can understand how these KPIs change with our engagement approach. This is so powerful because it means that


we can alter our performance to benefit both our customers and overall portfolio. Rather than making strategic changes


based on a naïve understanding, we can take actions that we are confident will have the beneficial effects we want, based on real data. In the UK alone, we have around five


million consumer accounts going through our Arrow Simulation Engine, which provides a valuable resource and an understanding of what will drive performance in five, six, or even seven years. That allows us to target the right KPIs and informs our performance and investment needs.


A conveyor belt of talent It is interesting that we now have something of a conveyor belt of talent. As capable young people see the exciting work that we are doing, they want to be part of it, and that, in turn, leads to future success. Today there are more than 20 people working in our analytics function and seven of them are PhDs, four from Manchester University. I would not say that you need a PhD to


do basic binary event modelling, but the fact is that as you start to reach the level of sophistication we work with, on portfolio dynamics, it does become important.


Across Europe Arrow Global has great strengths across Europe, working in Italy, the Netherlands, and Portugal. However, the approach is always the same: get the data and consistency in place, so you can understand decisions and why things happen, and then you can build on your firm foundations. CCR


September 2019


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52