AI-Powered Overdraft Risk Mitigation: Coforge Boosts Recovery Rates for Leading US Bank

Challenges.

• High default risk on overdraft accounts.
• Regulatory compliance challenges.
• Potential customer dissatisfaction.
• 45% of customers failing to make payments despite notifications.
• Lack of an effective prioritization system for risk management.
• Increasing charge-off risks and financial losses.

Our Solution.

Coforge implemented an AI/ML-powered solution to address overdraft risks:

• Developed an advanced risk scoring model using SAS.
• Implemented an early warning system triggered on Day 1 Past Due (DPD 1).
• Created a prioritization segmentation based on risk score and overdraft balance.

Key highlights:

• Risk Scoring Model: Predicted likelihood of customers repaying overdrafts.
• Early Warning System: Identified high-risk customers for proactive outreach.
• Prioritization Segmentation: Enabled targeted interventions based on risk and balance.

The Impact.