Simplifying Loan Closure
To Reduce Defaults
Simplifying Loan Closure
To Reduce Defaults
Overview
Our challenge was critical: a high volume of outstanding dues in the Consumer Durable Loan segment. The existing experience was failing to drive resolution, resulting in high frustration for customers and a system plagued by miscommunication and lack of accountability.
Our challenge was critical: a high volume of outstanding dues in the Consumer Durable Loan segment. The existing experience was failing to drive resolution, resulting in high frustration for customers and a system plagued by miscommunication and lack of accountability.
Our challenge was critical: a high volume of outstanding dues in the Consumer Durable Loan segment. The existing experience was failing to drive resolution, resulting in high frustration for customers and a system plagued by miscommunication and lack of accountability.
Our challenge was critical: a high volume of outstanding dues in the Consumer Durable Loan segment. The existing experience was failing to drive resolution, resulting in high frustration for customers and a system plagued by miscommunication and lack of accountability.
Our goal was not just to build a repayment portal, but to re-engineer the psychological and systemic foundation of debt resolution, positioning the bank to effectively mitigate a significant business risk.
Our goal was not just to build a repayment portal, but to re-engineer the psychological and systemic foundation of debt resolution, positioning the bank to effectively mitigate a significant business risk.
Our goal was not just to build a repayment portal, but to re-engineer the psychological and systemic foundation of debt resolution, positioning the bank to effectively mitigate a significant business risk.
Our goal was not just to build a repayment portal, but to re-engineer the psychological and systemic foundation of debt resolution, positioning the bank to effectively mitigate a significant business risk.
What are Consumer Durable Loans?
Diagnose
The Challenge / Broken System
We began this project with primary research, combining both qualitative and quantitative data to understand "why loan closure was failing?"
We began this project with primary research, combining both qualitative and quantitative data to understand "why loan closure was failing?"
We began this project with primary research, combining both qualitative and quantitative data to understand "why loan closure was failing?"
Quantitative
Reasons why customers have defaulted
Reasons why customers have defaulted
Reasons why customers have defaulted
Reasons why customers have defaulted
Qualitative
Sentiment analysis of customers
Sentiment analysis of customers
Sentiment analysis of customers
01
Manipulation
Agents often pushed for settlements to meet targets, leaving borrowers feeling pressured.
01
Manipulation
Agents often pushed for settlements to meet targets, leaving borrowers feeling pressured.
01
Manipulation
Agents often pushed for settlements to meet targets, leaving borrowers feeling pressured.
01
Manipulation
Agents often pushed for settlements to meet targets, leaving borrowers feeling pressured.
Parallel Data:
WhatsApp Campaign
Parallel Data:
WhatsApp Campaign
Parallel Data:
WhatsApp Campaign
To validate the potential for behavioral nudges and measure initial engagement, we also analyzed data from a parallel recovery campaign conducted via WhatsApp. This allowed us to quickly gauge borrower willingness to re-engage given the right incentive structure.
To validate the potential for behavioral nudges and measure initial engagement, we also analyzed data from a parallel recovery campaign conducted via WhatsApp. This allowed us to quickly gauge borrower willingness to re-engage given the right incentive structure.
To validate the potential for behavioral nudges and measure initial engagement, we also analyzed data from a parallel recovery campaign conducted via WhatsApp. This allowed us to quickly gauge borrower willingness to re-engage given the right incentive structure.
Result
of recipients engaged → either paying overdue EMIs or expressing intent to pay the next one.
of recipients engaged → either paying overdue EMIs or expressing intent to pay the next one.
of recipients engaged → either paying overdue EMIs or expressing intent to pay the next one.
of recipients engaged → either paying overdue EMIs or expressing intent to pay the next one.
Reframe
Mind the gap
Reframe
Mind the gap
1. The Insights
1. The Insights
1. The Insights
Our primary research exposed critical disconnects in the collections process. We formalized these findings into structured insights.
Our primary research exposed critical disconnects in the collections process. We formalized these findings into structured insights.
Our primary research exposed critical disconnects in the collections process. We formalized these findings into structured insights.
Insight 1
Absence of a source of truth delays decision making.
Settlement related information is received through different channels like field agents and SMS/WhatsApp, and customers often call agents only to validate information.
Insight 1
Absence of a source of truth delays decision making.
Settlement related information is received through different channels like field agents and SMS/WhatsApp, and customers often call agents only to validate information.
Insight 1
Absence of a source of truth delays decision making
Settlement related information is received through different channels like field agents and SMS/WhatsApp, and customers often call agents only to validate information.
Insight 1
Absence of a source of truth delays decision making.
Settlement related information is received through different channels like field agents and SMS/WhatsApp, and customers often call agents only to validate information.
Insight 2
Customers seek assurance that full repayment guarantees loan closure and peace of mind.
Customers engage in detailed discussions with agents to ensure their repayment choices stops further CIBIL impact. They also request timeline for important documents for further reassurance.
Insight 2
Customers seek assurance that full repayment guarantees loan closure and peace of mind.
Customers engage in detailed discussions with agents to ensure their repayment choices stops further CIBIL impact. They also request timeline for important documents for further reassurance.
Insight 2
Customers seek assurance that full repayment guarantees loan closure and peace of mind
Customers engage in detailed discussions with agents to ensure their repayment choices stops further CIBIL impact. They also request timeline for important documents for further reassurance.
Insight 2
Customers seek assurance that full repayment guarantees loan closure and peace of mind.
Customers engage in detailed discussions with agents to ensure their repayment choices stops further CIBIL impact. They also request timeline for important documents for further reassurance.
Insight 3
Customers disengage when their financial constraints are not acknowledged
Customers engagement drops if they sense their financial constraints are not being recognized, one sided conversations discourage payments.
Insight 3
Customers disengage when their financial constraints are not acknowledged
Customers engagement drops if they sense their financial constraints are not being recognized, one sided conversations discourage payments.
Insight 3
Customers disengage when their financial constraints are not acknowledged
Customers engagement drops if they sense their financial constraints are not being recognized, one sided conversations discourage payments.
Insight 3
Customers disengage when their financial constraints are not acknowledged
Customers engagement drops if they sense their financial constraints are not being recognized, one sided conversations discourage payments.
Insight 4
Foreclose tomorrow rather than settlement today
Customers engage in detailed discussions with agents to ensure their repayment choices positively impact their CIBIL score and secure their financial future. They also request timeline for important documents for further reassurance.
Insight 4
Foreclose tomorrow rather than settlement today
Customers engage in detailed discussions with agents to ensure their repayment choices positively impact their CIBIL score and secure their financial future. They also request timeline for important documents for further reassurance.
Insight 4
Foreclose tomorrow rather than settlement today
Customers engage in detailed discussions with agents to ensure their repayment choices positively impact their CIBIL score and secure their financial future. They also request timeline for important documents for further reassurance.
Insight 4
Foreclose tomorrow rather than settlement today
Customers engage in detailed discussions with agents to ensure their repayment choices positively impact their CIBIL score and secure their financial future. They also request timeline for important documents for further reassurance.
Insight Outcome
Insight Outcome
Insight Outcome
These insights guided us to prioritize transparency, continuity, and personalized communication as non-negotiable design principles for the new system.
These insights guided us to prioritize transparency, continuity, and personalized communication as non-negotiable design principles for the new system.
These insights guided us to prioritize transparency, continuity, and personalized communication as non-negotiable design principles for the new system.
We reframed
We reframed
We reframed
THE CORE QUESTION
Before
Before
Before
After
After
After
"Design a loan closure journey."
"Design a loan closure journey."
"Design a loan closure journey."
"How might we enable customers to close loans with clarity and willingness, through behavioral design?"
2. Behavioral Triggers Benchmark
2. Behavioral Triggers Benchmark
2. Behavioral Triggers Benchmark
We studied human psychology to gain an understanding of the emotional levers that drive reactions to offers, incentives, and deadlines. This allowed us to map what can motivate repayment (urgency, progress, reward).
We studied human psychology to gain an understanding of the emotional levers that drive reactions to offers, incentives, and deadlines. This allowed us to map what can motivate repayment (urgency, progress, reward).
We studied human psychology to gain an understanding of the emotional levers that drive reactions to offers, incentives, and deadlines. This allowed us to map what can motivate repayment (urgency, progress, reward).
We then identified how these psychological insights are actively translated into successful UX strategies in e-commerce and other web experiences (the "hacks").
We then identified how these psychological insights are actively translated into successful UX strategies in e-commerce and other web experiences (the "hacks").
We then identified how these psychological insights are actively translated into successful UX strategies in e-commerce and other web experiences (the "hacks").
Scarcity
Limited-time availability creates a sense of urgency by constraining the window of opportunity.
Limited-time availability creates a sense of urgency by constraining the window of opportunity.
Limited-time availability creates a sense of urgency by constraining the window of opportunity.
Loss Aversion
Consumers are primarily motivated by the fear of losing what they already have or are entitled to, rather than gaining something new.
Consumers are primarily motivated by the fear of losing what they already have or are entitled to, rather than gaining something new.
Consumers are primarily motivated by the fear of losing what they already have or are entitled to, rather than gaining something new.
Social Proof
In ambiguous or uncertain situations (like debt resolution), people tend to follow the actions of others to validate their own choice.
In ambiguous or uncertain situations (like debt resolution), people tend to follow the actions of others to validate their own choice.
In ambiguous or uncertain situations (like debt resolution), people tend to follow the actions of others to validate their own choice.
Outcome
Outcome
Outcome
We also looked at other critical features and included Anchoring, Progress Tracking, Simplified Decision-Making via pre-selected beneficial options, and Empathy-Based Messaging into our design.
We also looked at other critical features and included Anchoring, Progress Tracking, Simplified Decision-Making via pre-selected beneficial options, and Empathy-Based Messaging into our design.
We also looked at other critical features and included Anchoring, Progress Tracking, Simplified Decision-Making via pre-selected beneficial options, and Empathy-Based Messaging into our design.
Design
The solution
The solution
Three Paths, One Journey
What to Expect from the Solutions
Our research revealed one core truth: people default not out of defiance, but confusion and fear. The system around loan closure had become a maze — fragmented, opaque, and emotionally taxing.
Our research revealed one core truth: people default not out of defiance, but confusion and fear. The system around loan closure had become a maze — fragmented, opaque, and emotionally taxing.
Our research revealed one core truth: people default not out of defiance, but confusion and fear. The system around loan closure had become a maze — fragmented, opaque, and emotionally taxing.
We approached the solution through three complementary journeys, each addressing a different behavioral reality:
We approached the solution through three complementary journeys, each addressing a different behavioral reality:
We approached the solution through three complementary journeys, each addressing a different behavioral reality:
1. The North Star Journey
1. The North Star Journey
1. The North Star Journey
— a direct, frictionless closure flow for those ready to pay.
2. The Not Able to Pay Journey
2. The Not Able to Pay Journey
2. The Not Able to Pay Journey
— an empathetic off-ramp for those in distress.
3. The Tranche Journey
3. The Tranche Journey
3. The Tranche Journey
— a flexible, gamified repayment path for those willing to pay but needing time.
1. The North Star
It’s designed to answer a single question: “How can we make closing a loan as easy as buying one?”
Read More
It’s designed to answer a single question: “How can we make closing a loan as easy as buying one?”
Read More
It’s designed to answer a single question: “How can we make closing a loan as easy as buying one?”
Read More
It’s designed to answer a single question: “How can we make closing a loan as easy as buying one?”
Read More
LAN - Dashboard Design
Problem:
Customers lacked a single, reliable view of their loan. Data was fragmented, and users depended on agents for validation → creating friction, confusion, and mistrust.
Problem:
Customers lacked a single, reliable view of their loan. Data was fragmented, and users depended on agents for validation → creating friction, confusion, and mistrust.
Context:
The LAN View is where users make the most critical decision → see accumulated information about the loan & waiver, and decide to close, settle, or postpone repayment.
Context:
The LAN View is where users make the most critical decision → see accumulated information about the loan & waiver, and decide to close, settle, or postpone repayment.
2. The “Not Able to Pay” Path
“Not Able to Pay” is a path within the North Star journey that helps us understand why a customer can’t make a payment, approach them with empathy, and offer a space to discuss what they can manage.
Read More
“Not Able to Pay” is a path within the North Star journey that helps us understand why a customer can’t make a payment, approach them with empathy, and offer a space to discuss what they can manage.
Read More
“Not Able to Pay” is a path within the North Star journey that helps us understand why a customer can’t make a payment, approach them with empathy, and offer a space to discuss what they can manage.
Read More
“Not Able to Pay” is a path within the North Star journey that helps us understand why a customer can’t make a payment, approach them with empathy, and offer a space to discuss what they can manage.
Read More
3. The Tranche Journey
One of the insights we built upon is: “Settlement offers attract customers, but the strict deadline for payment discourages them from acting.” As paying the full settlement amount at once felt unmanageable.
This insight became the foundation for the Tranche Journey: a flexible, phased repayment model that lets customers close loans at their own pace.
Read More
One of the insights we built upon is: “Settlement offers attract customers, but the strict deadline for payment discourages them from acting.” As paying the full settlement amount at once felt unmanageable.
This insight became the foundation for the Tranche Journey: a flexible, phased repayment model that lets customers close loans at their own pace.
Read More
One of the insights we built upon is: “Settlement offers attract customers, but the strict deadline for payment discourages them from acting.” As paying the full settlement amount at once felt unmanageable.
This insight became the foundation for the Tranche Journey: a flexible, phased repayment model that lets customers close loans at their own pace.
Read More
One of the insights we built upon is: “Settlement offers attract customers, but the strict deadline for payment discourages them from acting.” As paying the full settlement amount at once felt unmanageable.
This insight became the foundation for the Tranche Journey: a flexible, phased repayment model that lets customers close loans at their own pace.
Read More
Impact & Outcomes
From Pilot to Platform
Project Status:
Project Status:
Under Developement
Under Developement
Under Developement
Under Developement
Business Impact
Simplified → Scalable → Insight-Driven
Simplified → Scalable → Insight-Driven
1. Transparency at Scale: Reduced dependence on agents through self-service closure and automated approval flows.
2. Operational Efficiency: Automation reduces the cost-to-collect and minimizes compliance risk by removing manipulation from the process.
3. Data Intelligence: The Not Able to Pay path generates behavioral and financial data, giving the bank insights into customer intent, repayment capacity, and reasons for default.
Guiding Principles
A new system for digital recovery