How Effective Is It to Automate Your Debt Collection?

No matter how big or small your business operations are, managing cash flow can be quite challenging. For instance, since the Great Recession in 2009 in the US the consumer debt had increased nearly by USD 2.3 trillion and now with the pandemic, it is even getting more difficult to recover debts.

Business turnovers have taken a hit and the revenue shortfall has affected all processes of the business. Consequently, many individuals, MSMEs, and SMEs are still struggling to get back to normal and are forced to default on their monthly EMIs.

Due to the growing job losses and declining revenues, the borrowers and banking customers have already started seeking extended financial support. This in turn has further stressed the bank assets and will require extreme measures for recovery. Even debt collection teams are having a hard time doing their job. Once the pandemic ends, banks are expecting a huge rise in delinquencies which will have to be dealt with by the available workforces.

This is where automated customer communications can save the day!

Automated Customer Communications to revive the Banking System

Automated debt collection solutions are capable of minimising the risks of defaults and NPAs to a great extent. Being widely used across industries, they offer tools that improvise the collection process, leaving no room for human error.

So, let’s go ahead and find out the ways in which your debt recovery business can leverage automated customer communications to improve their returns.

Keep in Touch with Customers Through Automated Messaging

Don’t let the ongoing pandemic affect the relationship that your business has with your customers. Automate your outbound activities through messages being sent to a mass audience. Keep it completely customised so that you can reach out to them in a way that’s quick and more efficient.

Consider automating some of the tedious steps in order to avoid any impact on your business revenue and payment collections. Instead of making calls after calls and chasing debt or collection payments one at a time, make use of a unique payment URL over email or SMS wherein it allows customers to make the payment securely online.

How Effective Is It to Automate Your Debt Collection?

Automation primarily removes the chances of human error, while still leaving scope for human judgement and intervention, and assists businesses control customer interactions with the help of software.

1. Provides an Updated Borrower Information

The Bureau of Consumer Financial Protection had received a huge number of debt collection complaints which were based on attempts to collect debts not owed. A mistake in the borrower’s profile validation or losing track of the borrower during the loan sanction or recovery period could lead to disasters later.

Hence, maintaining an updated borrower profile is highly required. Based on the loan type, repayment date, the amount owed, occupation, and location, borrowers can be segmented into different loan categories which helps in prioritising cases.

2. Breaks Down Communication Barriers

While your company’s operations may be spread across states or even countries, there may be a communication barrier with your customers who are in different places. Some may have a lack of proficient language or technical skills, especially in countries like India where financial literacy is not fully developed, and so face difficulty in paying back the money.

Debt recovery technology nowadays allows customers to choose their preferred language wherein it makes them more receptive to communicate with the company they owe money to. By embracing communication with technology, companies also save time and also the payroll cost of following up multiple times with the same customer.

3. Makes the Repayment easier for Customers

By providing your customers with an automated, easy to understand repayment plan, they will be less prone to become delinquent on their repayments. Automated messaging across multiple channels makes communications between the customer and your organisation have a good rapport, which is often not the case during the traditional follow up on debts by the agents.

With this, customers can now make repayments easily and quickly without having to interact with the customer care or bank directly.

4. Helps to Understand Customer Repayment Trends

By utilising this debt recovery technology, it allows companies to get the data of customers on how and when they like to be contacted on a case-by-case basis which confirms their promise to pay. This data can also make companies create incentive programs like fee waivers thereby encouraging customers to pay promptly.

And even when things are not going well with a particular customer, or if companies need to get a better idea of who needs more prompting to pay in the future, the debt recovery technology can help in finding the risky customers. This will allow avoiding such customers in the future or will look at what methods or processes are needed that best work to handle their promise to pay.

5.  Targeted Notifications

Notifications play a vital role in bringing the debtor’s notice on the repayment date. But most of the people around 73.47%  categorise their frequent notifications in the spam folder.

However, the targeted in-app, Whatsapp, or email notifications can remind the debtors of their repayment date and time without any further delay.

How Finezza helps Debt collections?

Finezza offers a unique collection app that makes debt recovery hassle-free. Our collection app is a form of delinquency management solution that is more sophisticated and customer-centric, meeting the demands of today’s lenders. It simplifies monitoring and management of loans, delinquency management, and debt collection and makes crucial debt collection information accessible 24/7.

This app benefits the collection agents as they can easily track the status of their customers who have to repay the loans. We offer a whole end-to-end mobile ecosystem that facilitates all requests, detects delinquencies, and ensures seamless loan servicing and repayment options.

The highlights of this mobile ecosystem:

•       Automatically generates calling and follow-up lists for the operations teams.
•       Improves operational efficiency with automation and minimises human intervention.
•       Safeguards lenders against potential risks with its enhanced fraud management solutions.
•       Custom Payment link generator for added security

We leverage the power of Artificial Intelligence to automate the workflow and thereby safeguard businesses from risks and any fraudulent activities whereby we adhere to all the business and regulatory mandates. This empowers financial lending institutions to make better decisions and faster ones. Contact us today to know more.