As we know, collector’s abilities are not the only element in the efficiency equation. Effective debt collection requires a good leadership, specialized collector’s abilities, dedicated training sessions, efficient policies and procedures, technology, security measures and legal compliance.
So, the efficiency equation includes many components to be considered. In case one of them does not run properly, a clear impact can be seen in the final result.
If all of the above are covered, you are good to go. If you want to make sure you maximize your pursuit of debt collection, you need a good system.
A debt collection management system ensures high-level efficiency and productivity through operational activities automation. Therefore, complete collection software can help reduce operational costs, increase recovered amounts, improve customer engagement and deliver a pleasant experience for both debtor and creditor.
How can a collection system make a difference in the collector’s daily work?
To answer shortly, by offering features which sustain the collector’s activity:
- 360o view of the debtor - This feature ensures better customer experience for the debtor as well as flexibility for collectors, allowing them to manage different entities (e.g.: debtors, contracts, collaterals, etc.) and to easily access customer collection information. Another advantage of this feature is allowing business flows to be implemented at each hierarchical level.
- Customer Segmentation - A good application offers the possibility to create customer segments in order to best differentiate collection treatment. Multiple risk scores can be assigned to each collection segment based on configurable algorithms. The collection segments are configured according to the business specifics of each organization.
- End-to-end collection and recovery flows - A complete debt collection system covers all collection and recovery flows in a structured and easy to follow manner: early collection, late collection, fraud monitoring, legal procedures monitoring, relationship with third parties, asset management. Collection teams are able to monitor debtors even before the first day in delay, for prevention purposes and through each collection stage until cure or legal process completion.
- 3rd party activity - A debt collection solution should always provide the possibility to include and manage 3rd party’s activities. A dedicated tool for 3rd parties monitoring helps better manage and measure their operational performance. Some features are: automatic distribution of cases based on business needs, centralized history of data for comprehensive reports or audit purposes and ability to compare performance for competitiveness increase.
- Multiple ways of communication with the debtor - The system should use multiple communication channels for debtor interactions. People don’t call as much as they used to, but they chat, they send sms and emails. Therefore, digital communication should be integrated in any solution, without putting aside the traditional channels such as letters or phone calls.
Self service (debtor portal) - Self-service solutions are considered to be highly valuable by almost 90% of business executives, who consider them the preferred channel for several customer segments. The explanation comes from:
- Customers want to be able to view their debt information, make payments, send a complaint or provide reasons for unpaid debt without talking to an agent.
- Multiple payment options remove customers’ excuses for not paying.
- Self service brings non-stop access as customers can view their banking products and can easily take action.
- Customers appreciate fast interactions for fast results and problems solving.
- Reporting & KPI Modules - One of the challenges of an integrated collection application is the big amount of data related to customer behaviour, financial information, collection actions, interactions between agents and customers and the outcomes over long periods of time on which the managers rely to control, predict and manage the process. The system has to offer visual representations and graphics on the gathered statistics and data that can ease the comparison and ensure that the manager can decide the proper approach. Also, on demand reporting can be easily performed.
- Multiple ownership allocation - This ensures a better interdepartmental operational efficiency and allows collectors to apply different strategies depending on the debtor and its due amount.
Payment agreements - In the collection process, the collector may set up a formal (or informal) agreement with the debtor. The system should automatically track payment agreements based on information received in the daily imports (e.g.: delay changes, changes in outstanding amounts, payments, etc.). Some of the advantages are:
- Automatic calculation of installments – time saving;
- Flexible and customer oriented collection treatment;
- No need for user periodical checks – automatic checks are included.
Strong collectors’ abilities combined with a solution that offers a high level of automation, covers end-to-end the operational business flows, facilitates collectors’ daily activities and gives the possibility to customize the collection treatment based on the debtors’ profiles and market changes on the spot results in a more effective, customer-focused collections process that turns debtors into valuable customers while increasing recoveries and reducing costs.