Loan disbursement as we know it is only the beginning of a hopeful span of repayment period where a lender expects to receive small debt recovery payments. However, when left unmonitored, this period can run havoc on the revenues of the loan dispensing company.   

NBFCs, MFIs and other lending institutions often come under the purview of regulatory authorities where their collection processes are scrutinised. As a financial lending company, it is essential that you strengthen your debt recovery strategies earn steady streams of revenue. A targeted debt collection strategy not only helps reduce costs, saves time but also maximises resources.  

7 Ways To Make Debt Recovery Easier

Here are a few ways you can make sure there is no delay in recovering debts…

1. Auto Generation of Pending Debt Statements

Automating statement generation and sending payment notification to customers is a great way to take some burden off the shoulders of debt collection agents. These auto-generated payment messages can be sent across to borrowers through SMS or mail.  Automated reminder systems can send thousands of customised, personalised messages via a customers’ favourite communication channel. Not only does this kind of automation easier at the lending headquarters with minimal paperwork and manual tracking but also saves borrowers a trip or two to make payments physically. 

To further streamline the process of debt collection, lenders can integrate a UPI payment option into the message they forward to the borrowers, allowing them to make the loan repayment instantly.

2. Multi-channel Contact Strategy

Digitisation of the debt collection process helps lenders achieve their debt recovery goals quickly. Companies can record a borrower’s contact preferences follow their protocols to reach out to them. Digital channels are the most hassle-free way of getting in touch with borrowers today. There is a dire need to integrate contact preferences and behavioural segmentation into debt recovery strategies.

A customer-sensitive multi-channel contact strategy helps gather responses from borrowers better than traditional methods. Use of advanced analytics, machine learning, and automation can be used to deliver tailored messages through the customer’s preferred channels, at considerable time gaps.

Investing in data analytics, AI and automation can successfully identify and segment customer types and preferences. The cost of implementing a robust multi-channel strategy remains insignificant when compared to the returns it offers to issuers.

3. Enhanced Self-Service Capabilities

It is true that a customer-oriented collection strategy boosts collection success rate and reduces operating costs. Using self-service capabilities turn around the debt collection processes ad for the better. 

These kinds of options allow borrowers to follow a do-it-yourself approach for clearing past-due balances. Using creative web tools in a software-as-a-service debt collections model, lenders can improve the customer experience, manage compliance, and automate the collections process through integrating self-service capabilities into the system. Not only does this kind of options help lending companies save money in the long run, but also enhance the customer experience. Speed loan repayments from delinquent borrowers with self-service options.

4. Tech-Driven Debtor Tracing

Many a time loan repayment defaulters relocate without furnishing a forwarding address to the lending company which sanctioned them a loan. This makes it difficult for a lending company to recover bad debts. Commercial lending businesses can use tech to locate debtors through a reliable tracing service. Making use of multiple data sources like address links, date of birth matching, occupier searching, deceased data, judgement data, telephone and electoral roll, lenders can trace a debtor down and recover bad debts quickly. 

5. Real-time Monitoring of Customer’s Activities

Lending companies can benefit from monitoring the customer’s activity in real time when they seek to recover a debt. Such a system can notify debt collectors about the repayment activities of borrowers as and when they are done. Real-time notifications ensure that borrowers who have already repaid are not bothered unnecessarily through unwanted recovery calls and save a lot of time.

Functionalities like CTI allow debt collection agent to pull-up all the data about a particular customer while having a conversation with them. Such features can revamp the way debt collectors handle debt recovery cases.

6. Scheduled Follow-Up Tracking

Lenders often struggle with ways to get customers to repay loans before resorting to extreme measures like a legal intervention. Using scheduled payment reminders such as SMS texts and emails, are an easy way to follow up with a borrower. When a debt collector contacts a delinquent customer, they need to keep additional contacts on a strict schedule. Systematic follow-up of borrower’s accounts reinforces a sense of seriousness and urgency into the customer. Thus, follow up tracking is a less invasive approach to recover debts from borrowers quickly and consistently. 

7. Use Debt Recovery Analytics and Account Receivable Scores

Lenders need to change the way they feel about unpaid accounts. Instead of referring to them as ‘due collections’ and ‘bad debt,’ they need to focus on the entire accounts receivable cycle. Following a holistic approach using Debt recovery analytics and account receivable scores can fetch better revenues. To prioritise delinquent accounts, lenders should apply analytics that brings out both the probability of recovery and the expected monetary amount to be recovered.

Why is Finezza the Ultimate Tool for Easier Debt Recovery?

Finezza’s mobile ecosystem offers a unique collection app that facilitates debt recovery. This state of the art delinquency management solution helps lenders with field collection to make debt recovery easier. Not only does the use of this specialised collection app omits the paper load of the lending company but also streamlines the process of collection by easing the woes of collection agents. It also minimises the chances of human error. 

The app comes laced with multiple features that simplify the debt collection process, like:

•      PTP tracking
•      Follow-up tracking
•      Real-time customer information
•      Location tracking
•      Collection updates through mobile and web
•      Address locator

Finezza offers wholesome loan lifecycle management solution, filling in the gaps in the process of debt collection through its collection app. All in all, it improves operational efficiency on account of automation and minimal human intervention. It also ensures minimal operational costs, all the more reason for lending companies to embrace the ecosystem!

To know more, get in touch with us today!