Revolutionizing Debt Collection: A win-win for banks and Clients
The realm of banking is undergoing a transformation, and debt collection is no exception. Often underestimated within the banking domain, debt collection stands as a pivotal element of client risk management for financial institutions. Simultaneously, it presents an untapped avenue for enhancing customer retention and overall profitability.
Understanding Debt collection….
At its core, bank debt collection encompasses critical procedures that enable financial institutions to recuperate unpaid funds and mitigate risks tied to loans and receivables. This process comes into play when a customer account falls behind or when payments, such as loan installments, remain unpaid. It is a broad term including :
- Commercial collection
- Amicable collection
- Legal collection
- Over-indebtedness, which lies between vulnerable clientele and debt collection.
Challenges of traditional bank debt collection:
Traditional bank debt collection has traditionally been managed through manual processes requiring substantial human intervention. However, the landscape is changing, prompting financial institutions to enhance their debt collection operations. These shifts stem from factors such as macroeconomic challenges and risks.
While institutions encounter similar issues, their collection methods vary widely. Some entities automatically deduct owed amounts from delinquent accounts, while others rely on a single communication channel like phone or mail. This variance often results from underutilization of automation for consumer profiling and engagement.
Statistics clearly demonstrate the importance of efficient Debt collection Management:
- In 2020, 96% of businesses experienced payment delays*.
- Payment delays or defaults account for 25% of business failures*.
- The number of credit card accounts in “financial distress” reached 3.2%, equivalent to 14.7 million accounts in April 2020**.
* Sources: Forrester Consulting, Observatoire des délais de paiement 2020, Baromètre Figec 2020. Fédération Nationale de l’Information d’Entreprise, de la Gestion des Créances et de l’Enquête Civile.
** Source: TransUnion (NYSE: TRU), Q1 2020 Industry Insights Report.
These numbers emphasize the necessity for financial institutions to embrace digitalized debt collection management systems.
Advantages of digitalized Debt Collection Management: Establishing customer relationships while reducing irrecoverable debts
Transitioning to digitalized debt collection management offers a range of advantages for both financial institutions and customers alike:
1. For banks:
- – Task automation:
Streamline debt collection management through automated payment reminders, generation of letters, and deadline tracking, effectively reducing manual effort.
- – Accuracy and consistency:
Systematic recording of payment data, reminders, and customer interactions ensures better traceability and more efficient debt collection management.
- – Transparency and dispute management:
Digitalization promotes transparency by providing clear tracking of actions taken. This facilitates effective resolution of potential disputes.
2. For customers:
- – Personalized engagement:
Customers receive tailored payment notifications and reminders, aiding in deadline management and offering flexible payment options.
- – Improved communication:
Digitalization facilitates communication and collaboration between customers and banks, thereby enhancing the overall debt collection experience.
- – Preventing Over-indebtedness:
By having a clear view of customers’ financial situations, banks can intervene promptly to propose suitable solutions and prevent debt accumulation.
Digitalized debt collection management ushers in a multitude of benefits for both banks and customers. By embracing this approach, banks can bolster their competitive standing, elevate customer satisfaction, and optimize overall profitability.
Introducing « Digi-Collect »: Your Trusted solution for Digital Debt Collection
« Digi-Collect » presents a comprehensive end-to-end digital solution designed to optimize debt collection operations. It orchestrates the entire process, overseeing various debt collection stages – from amicable phases to legal actions – and supporting diverse arrangements.
With « Digi-Collect », you gain access to:
- – Real-time Reporting & Dashboards to monitor progress and key performance indicators (KPIs).
- – Efficient Allocation of Collection Files and Tasks to available managers.
- – Customer Risk Scoring & Alert System, providing a holistic view of customer situations.
- – Payment Tracking and Fee Management by the finance department.
- – Third-Party Coordination (bailiffs, lawyers, experts, etc.).
- – EDM: Electronic Document Management and configurable customer reminders.
Avec DigiRecouvrement, vous orchestrez efficacement vos relances de façon ciblée et personnalisé pour une meilleure efficacité. Vous accédez en temps réel aux données financières et commerciales de vos clients pour être au plus près de la réalité du terrain.
Our solution adresses your challenges
Digi-Collect empowers you to orchestrate targeted and personalized reminders, enhancing efficiency. Real-time access to customer financial and commercial data ensures a strong connection to ground realities.
Put an end to unpaid debts and boost your profitability with Digi-Collect!
