Thodoris Psilopoulos |
Companies are able to optimise and change the way in which collection and recovery can be organised and successful recoveries achieved thanks to advanced technology systems that can release millions in provisions from balance sheets.
Firms are under a great deal of pressure to upgrade their collection and recovery operations. Legacy systems are struggling to cope with rising volumes of non-performing loans (NPLs) as well as tighter regulation.
Older systems hold back firms in large part because they are not user friendly and fall short on functionality, being unable to manage accounts throughout the entire debt lifecycle, lacking the scalability to match growing volumes and being relatively inflexible.
In contrast, advanced systems bring inherent flexibility at the same time as offering powerful gains in productivity as automation streamlines the entire collection process. Managing all account data through a single interface allows everything to be simplified, at the same time as reducing duplication and cutting costs.
Agents spend more time on valued-added activities because administrative tasks are effortlessly integrated within system architecture or eliminated completely. The whole working environment becomes more user friendly; application users can be grouped by department and assigned access rights with roles defined by specific permissions.
A more user-friendly system improves operational performance, enabling firms to achieve more with less resources as well as making constant, intelligent enhancements to operations and improving risk management.
Better customer service
Data tends to be more fragmented, inconsistent and error prone when it is stored across multiple locations and depends on manual processes. Automation by its nature, reduces the possibility of human error as well as improving attention to detail.
High quality, consistent information underpinned by reliable processes is undeniably aligned to the increased responsibility that comes with heightened regulatory scrutiny.
Such precision is of course also in the interests of customers themselves, as they can be unfavourably impacted by the use of incorrect information. Legacy systems have also been poor at monitoring the activities of agents.
In contrast, sophisticated technology offers firms a high level of visibility over the activities of agents, enabling firms to detect agent practices that may unfavourably impact on account holders, and thereby better safeguard their own reputation.
Decrease NPL numbers and high roll rates
Systems that lack automation are characterised by relatively ineffective NPL management. Advanced systems integrate segmentation analytics, ensuring that treatment strategies for specific groups of accounts are applied automatically on an ongoing basis.
While this approach reduces costs and boosts revenue as accounts should be handled in the most optimum way, it also brings significant improvement in account rehabilitation.
Such a proactive, targeted approach early in the process can reduce bad debt, delinquency and attrition by up to 35%. Adopting advanced system technology actually allows firms to achieve more, but with less resources.
More user-friendly systems, enabling firms to easily customise and create parameters, can drive powerful improvements in productivity. Agents spend less time on administrative tasks, allowing them to pursue more value-added activities, work on more accounts and generally improve cash flow.
Advanced technology also enables firms to continually make changes in order to improve results. The effectiveness of automated segmentation strategies can be constantly evaluated so that adjustments can be made to enhance performance.
Reduce a high level of IT involvement to make changes to systems
Advanced systems bring improved functionality on many levels at the same time as enabling the seamless integration of data and automation of process, requiring much less day-to-day IT involvement compared with legacy systems.
As data is integrated in one place and the entire process can be managed through a single interface, the costly duplication of IT resources inherent in older systems is eliminated. Sophisticated systems enable accounts to be managed throughout the entire debt lifecycle, from initial contact through to the legal and restructuring stages, using the same platform infrastructure.
Firms can say goodbye to the high cost and the waste attached to traditional IT systems while more modern systems can be easily scaled up to handle increased volumes as well as effortlessly adjusted to add additional features.
This greatly reduces the need for ongoing IT involvement and investment, and means firms should never have to worry about building their own systems, as platforms can be tailored to their needs and effortlessly modified. In contrast, the rigidity of legacy systems can put an entire organisation at a disadvantage and hinder overall agility.
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