When we think of a debt collection system, we think of a software used to gather, display, and plan for how to proceed with any particular loan account. Planning revolves around whether a collection campaign is required for a defaulted loan account, or whether said account will likely repay since it has a good history.
These are what a bank or financial institution officer need to determine, before taking any next steps. The system with which they use to process and plan the collection process has to cater towards the likelihood of repayment. The following are three of the most important features needed in an enterprise-class debt collection system that ensures that this can be achieved.
View by customer instead of by loan accounts
It is a given that debt collection systems should have the ability to import loan data piped in from an origination system. We all expect that. But often, most of these debt collection systems only display loans to be collected, on an account-by-account view. The problem with that is, most of the time, a single customer may have more than one outstanding loan account involved, and that hampers bank personnel to get a higher-level overview about the borrower and their ability to repay.
For better handling, a great enterprise-class debt collection system should come baked in with the ability to view grouped loan accounts by customer. This will greatly streamline the collection process for banks, as their collection agents could see all the loan accounts tied to a particular customer. That way, they need not have to contact the same customer over and over again for different loans.
Intuitive interface for flexible collection strategies
Once a profile is loaded with all the customer’s loan accounts in full view, the next challenges are to make sense of all the information displayed, and to determine the next steps, should a collection campaign is needed for a particular customer or loan account. While debt collection systems are perfectly adequate in gathering information, said information is usually not being displayed in an easy manner for the officers and agents to figure out what to do next.
Customer profiling and collection strategies are arguably two of the most important elements in the entire debt collection process. Customer profiling is merely a way to create a portrait of a customer based on data the system already has, to determine the standing and likelihood to repay.
A strategy is a particular configuration of treatments (emails, calls, field visits, etc), set to be deployed each at predetermined times, and applied to a specific segment of the customer base. A great debt collection software usually houses multiple strategies, to cater towards different customer segments. The most fundamental version of the approach in designing strategies is using the value vs collectability matrix:
- High value, low collectability: more aggressive strategy.
- High value, high collectability: field visits.
- Low value, low collectability: send reminders.
- Low value, high collectability: call campaigns.
A great collection software could gather and display the data available in a way that make sense, for bank personnel to determine the next actions. It needs to have a simple-yet-scalable user interface (UI) with drag-and-drop capabilities. Its user-configurable profile, strategy, and treatment must also be flexible enough so that they can be tweaked on the fly to determine the best approach.
Most of the time, when it comes to scalability, most debt collection systems falter. It is one thing to have an intuitive user interface, but it is a whole other level to have a robust back end that could handle all the operation that is happening at the same time.
It is an absolute must, for a scalable debt collection system, to be able to handle millions of accounts, taking into consideration that the number of bank transactions are usually enormous. And any batch job that is required, be it sending reminder messages to customers that their payment is due, or a recurring backup of all new and updated transactions, has to be done optimally in the fastest way possible, to ensure that there is no bottleneck and no downtime.
Putting it all together
While a great enterprise-class debt collection system like Juris Collect is catered specifically for large banks, it can also handle smaller-scale financial institutions. The point is, it is highly scalable and just like how the software can be scaled up to handle larger workloads, it can also work well with smaller hardware setups.
Its robustness on the back end is paired exceptionally well with an intuitive front end that could display all the relevant information needed and guide the officers and collectors to plan for what’s next.
Finally, a great collection system has to put customers first – realising that there is actually an individual behind every loan account – and customising each approach depending on the customer, rather than the account.