1) Financial institutions can leverage predictive analytics to create dynamic collections strategies that maximize recovery amounts at each stage of the collections lifecycle.
2) Early collections focus on identifying high-risk customers to target for early recovery, while allowing low-risk customers time to self-cure. Late and recovery stages use harder tactics like legal notices on high-risk defaulters most likely to default further.
3) By considering both probability of recovery and expected recovery amount, institutions can prioritize accounts and strategies to boost profits from collections.