Complex legal and enforcement procedures, a large volume of outstanding debts and a peculiar character of the debtors’ actions force the creditors to resort to collection supporting systems.
One of important areas in the financial sector’s activity is handling late payment of debts. This requires an active approach on the part of the bank in accordance with creditor principles: monitor your receivables, inform the debtor in the case of arrears and insist on repayment. If this does not work, recover hard. Complex legal and enforcement procedures, a large volume of such cases and a peculiar character of the debtors’ actions force the creditors to resort to collection supporting systems.
The effectiveness of collection is enhanced by a dedicated IT system which monitors the repayment of overdue receivables on a daily basis. In this way it is easier to start soft collection, also known as pre-collection, which concerns debts that are only slightly overdue. In case multi-channelled soft collection fails, a comprehensive solution provides for a smooth transition to hard collection. At this stage the system may support agreement termination, writ of payment, court enforcement proceedings. Well-designed business processes ensure effective collection, optimise costs and time, and guarantee tightness of the entire process.
Improvement of Communication with the Debtor
When the debtor is contacted early, the bank has a chance to learn about the current situation, which often limits problem escalation at the very onset of the process. Integration of the collection system with other bank systems makes it easy to profile actions based on the client data the bank has. Phone call-based automated soft collection, texting and sending reminders enhances the effectiveness and reduces the costs of debt recovery. Integration of the collection and call centre systems is crucial for communication to be effective.
Operating on the basis of one common user interface enables managing both single calls and entire telephone campaigns, as well as electronic communication from the level of the debt collection system. It is important that the communication be coordinated and multi-channelled, using calls to the account manager, automatic calls, texts, e-mails, letters, communicators, chats or forms from on-line sites. Bank employees should be free to switch between the channels of contact with the debtor. They should always know the information provided earlier on via the channels and take into account the earlier actions and arrangements.
BPM Systems in Debt Management Processes
A solution using the BPM (Business Process Management) class platform may a perfect fit for the collection process. Ferryt Debt Management based on the Ferryt platform developed by DomData is an example of such a collection system. The solution comprehensively handles the process of monitoring, soft and hard collection. The processes may be targeting client or debt collection. The ability to adapt processes to the peculiar character of a bank or a firm and to the changing business needs improves the effectiveness of debt recovery.
In the case of hard collection, Ferryt Debt Management enables processing agreement termination, debt restructuring, settlement and debt enforcement. It also supports the outsourcing of collection and sale of debts. Connections to numerous systems, such as EPU, BIK, KRD, BR, greatly improve the debt recovery process.
How do you Structure the Mechanism Well?
Well-designed processes on the BPM platform ensure tightness of the collection system. They automate launching the collection, make it easier to meet the deadlines on its individual stages and collect information from other systems of the organisation and external systems on an ongoing basis. At this point, it is worth pointing out that the institution may decide to what extent the process is to be automated or manually driven. Fully automated soft and hard collection is also possible for a given case. The persons in charge of supervision have a full access to each proceeding, debtor profile and the status of payments to creditors. The collection fees, if correctly defined in the processes, will be automatically charged at the subsequent stages of the process.
The collection system based on a modern BPM platform can be extended to include a decision engine. The support form a decision engine enables implementing predictive or scoring models in the system. It significantly improves the effectiveness of monitoring and collecting the debt.
Because what counts, is …
effectiveness of debt management and recovery. To a large extent, it depends on IT systems. Comprehensive solutions, such as Ferryt Debt Management, make it possible to carry out collection adequately to a given client and situation. The Ferryt business platform has been successfully exploited in the Polish and foreign banks for years now. It is modern, flexible, open, intuitive, easy to use and fast to introduce changes. One of its areas of application is the improvement of collection processes. The processes which are growing ever more important for the banks, and also for other enterprises with mass clients.
