Reliable Collection Systems Reduce Bank Collections
It is now more important than ever that financial institutions have a reliable and compliant debt recovery system because they simply cannot afford to write off bad debts or ignore customer experience.
Some 77 million Americans have a debt in collections, which amounts to 35% of consumers. Meanwhile the Consumer Financial Protection Bureau also reports that U.S. consumers have submitted more complaints about debt recovery practices than about any other product or service.
That is why banks and credit unions should view debt gathering as a critical piece of the credit cycle, not just the final step. The role of collections is an important service that helps financial institutions maintain clients and open more funds for lending again, a strategic process that is key to generating good habits and a payment culture among customers.
The process, defined as the set of synchronized, suitable, and timely activities meant to obtain full repayment of loans from clients, and intended to convert the financial institution’s receivables into liquid assets as quickly and efficiently as possible, while at the same time maintaining a positive relationship with the client to set the stage for future transactions.
CARM-Pro vigorous bank loan collection and recovery software helps banks and credit unions increase revenues and reduce costs through improvements in compliance, resource efficiency, and superior reporting.
Interaction with Client
Even a partial decrease in loss rates for large portfolios can produce a noteworthy and recurring decline in credit losses. Maximizing return on investment by minimizing unpaid loans and managing conventional credit risk as well as profitability factors such as customer retention and resources are key components of a financial institution’s debt recovery process.
Along these lines, the process requires significant interaction with the client, beginning with a careful analysis of the lender’s situation and continuing through timely and frequent contact over the duration of the loan.
Many collectors do not have right tools to improve delinquency rates and maintain borrowers as customers. Delinquent borrowers are still valued customers. Without a consolidated comprehensive view of the customer’s relationship with the financial institution, financial institution personnel are unable to make quick decisions or offer customers a best-fit solution and clear delinquent accounts.
Without a consolidated borrower-centric approach, debt officers can unintentionally sanction different agents to communicate with the same customer. These repeated aggressive calls by different agents leaves customers aggravated and the possibility of having customer service rated poorly and relayed over social media to the larger public. In addition, there is a distinct possibility of the customer switching loyalties in search of better customer experience.
We can help you transform to our robust collection and recovery system. We can help with data rollback and escrow source codes as well.
Improving Bank Collections in 4 Steps
Many bank debt-recovery systems are not very effective and occupy several incongruent applications with slight integration between them. Many do not have consolidated data portals or centralized operational control, which creates data inconsistencies and loss. Collectors sustain added expenses include the maintenance of these systems and IT staff training in addition to administering this intricate infrastructure.
There are many things to consider if your financial institution is considering a change from your legacy system. Such as knowing whether the current system automates debt and asset recovery operations providing substantial operational, regulatory and financial advantages to your bank or credit union.
Here are four quick steps to improving the debt recovery process:
- Align consumer strategies and practices with your organizational strategy, structure, and priorities.
- Develop a decision-making strategy using advanced analytics and alternative data sources.
- Streamline workflows and operational structure.
- Demonstrate consistency throughout the process.