Nobody Answers the Phone: How Default Management Moved Upstream

Only 13% of collections calls get answered. So what replaced the phone?Ten years ago, default management was almost entirely a phone-based process. Today, the phone gets answered 13% of the time, and the industry has rebuilt itself around digital-first outreach, behavioral data at a scale no single lender can reach, and models that predict on day one of delinquency how long an account will take to cure.Jay Mossman of AKUVO and Dave Wasik of 2nd Order Solutions join host Barry Roach to trace how the discipline got here. Jay explains how AKUVO processes data from 30 million consumers and 110 million banking accounts each night across more than 200 institutions, and why, for a large share of delinquent borrowers, the correct action is to leave them alone.Dave, who ran collections and recoveries for Capital One’s U.S. card business through the Great Recession, closes with a contrarian take: The biggest near-term win for collections leaders has nothing to do with AI.WHAT YOU’LL LEARN• Why digital-first now beats phone-first on loss mitigation outcomes, not just cost• What the 90% of delinquencies that resolve within 30 days reveal that credit scores cannot• How a severity-of-delinquency model predicts cure time on day one with 85% to 90% accuracy• Why the real value of an unanswered outbound call is the caller ID itself• Where collections leaders should spend the next 18 monthsGUESTSJay Mossman, CEO and founder of AKUVOJay spent nearly two decades in banking before founding a series of companies over 30 years, including Akcelerant and now AKUVO, both focused on default management and portfolio risk.Dave Wasik, partner at 2nd Order SolutionsDave has more than 30 years of experience in credit and lending. 2nd Order Solutions is a credit and lending advisory firm working with banks, specialty lenders and fintechs across the credit lifecycle. He previously led collections and recoveries for Capital One’s U.S. card business through the Great Recession.CHAPTERS0:00 “Leave them alone”: Predicting the cure on day one0:58 Intro1:21 Meet Jay Mossman, AKUVO3:01 Meet Dave Wasik, 2nd Order Solutions4:05 From reactive collections to predictive risk4:48 Shift one: Digital-first replaces the phone6:05 Shift two: Internal and external data7:19 From if-else-then to instructions9:32 “Models don’t collect”10:24 Inside an anonymized data lake11:25 Predicting cure time on day one12:26 The 90% the credit bureaus never see12:51 Two thousand borrowers vs. 30 million14:44 Digital-first vs. phone-first: The lines flipped16:52 Thirteen percent answer the phone17:21 The engagement assistant as top collector18:02 The caller ID billboardABOUT LEADERS IN LENDINGLeaders in Lending is brought to you by Upstart. Conversations with the people building the future of consumer credit.Subscribe so you don’t miss Part 2.