ROI Calculator "Chiron"

Like any business that's reliant on recurring payments, PAYGo providers experience churn, otherwise known as attrition, in their customers' repayment plans. Predicting when and for whom churn will occur, how effective a targeted intervention might be, and the return on investment for a set of interventions, can help to prioritize such interventions, reducing costs and increasing overall revenue.

By feeding into a machine learning model features engineered from data on products, transactions, demographics, income, and more, predictions can be made as to who is likely churn in the next 30 days. An ROI calculator can then take this model's predictions along with other metrics (e.g. cost of intervention, likelihood of success, unit cost of churn) and turn them into a prescribed set of interventions to maximize ROI.

Needs Addressed. Like any business reliant on recurring payments, PAYGo providers experience churn, otherwise known as attrition, in their customers' repayment plans. Predicting when and for whom churn will occur, how effective a targeted intervention might be, and the return on investment for a set of interventions, can help to prioritize such interventions, reducing costs and increasing overall revenue.

Technology. By feeding into a machine learning model features engineered from data on products, transactions, demographics, income, and more, predictions can be made as to who is likely churn in the next 30 days. An ROI calculator (Figure X) can then take this model's predictions along with other metrics (e.g. cost of intervention, likelihood of success, unit cost of churn) and turn them into a prescribed set of interventions to maximize ROI.

Validation. A majority of the PAYGo providers who attended the the peer convening expressed a strong interest in adopting such a tool.

Gap. While the approach and model are both portable to other providers, the lack of standardization in the data portfolio and payments could present some hurdles in adopting the technology to a new partner.

Partners. We are currently working with a PAYGo provider in partnership with BigML, a cloud-based ML-as-a-service provider, to pilot this model and measure its effectiveness in the medium-term.

PAYGOCarmen Merab