57% reduction in average issuer dispute charge-off amounts while reducing risk of loss
Overview.
Overview: An issuing bank, a client of the third largest merchant acquirer in the U.S., faced a surge in disputes and a concerning rise in charge-off rates. Coforge’s expertise and the innovative SmarTrans methodology delivered significant cost savings and improved operational efficiency.
The key business challenges encountered by the client included:
Dispute Management Woes: The bank struggled to manage a growing inventory of disputes, leading to potential for substantial financial losses.
High Charge-Off Rates: The existing average charge-off rate of $0.14 per transaction significantly impacted the bank's bottom line.
Solution.
Coforge implemented the following approach to tackle the challenge:
SmarTrans Analysis: Our SmarTrans methodology provided a thorough business analysis, identifying areas for improvement and cost reduction.
Kaizen for Efficiency: We implemented innovative Kaizen (continuous improvement) processes to streamline dispute management and optimize inventory handling.
Tiered Chargeback Checks: We established a tiered system of checks based on transaction value, prioritizing high-dollar disputes to minimize potential losses.
Quality Assurance Focus: An independent quality organization ensured meticulous review and reduced repetitive errors, further lowering charge-off rates.
The Impact.
Lower charge-off and operational cost
Charge-offs reduced from $0.14 to $0.06 per transaction
Additional labor cost savings of 50% for some work
