As our economies suffer the effects of the Pandemic, our Lending Institutions experience a conundrum. (a) Social and Governmental pressure to bootstrap economic revival. (b) Pressure on income and profitability. (c) Health and safety concerns for customers, employees, and agents (d) Possible regulatory guidance on floors/ceilings of rates and means to recover.
In an Income Statement today, a $ recovered is perhaps equal or more to a $ of new business, therefore, ‘Recovery’ lands back into the spotlight. This is easier said than done with health and safety challenges requiring the need to maintain safe distances, safe handling of cash, being responsible and empathetic lenders.
Our state of business and technological advancement presents us with several means to deal with this issue. We discuss a few of these in this document.
Apply more Intelligence into your recovery effort
Non-performing Assets is one of the most important metrics that a Lending Institution monitors and keeps under check. Defaults are inevitable in any Institution striving to survive; however, management of defaults and minimising losses can be achieved. Focus on optimization of collection activities so that the Institution recovers more with lower costs and efforts. Consider the following…
- Statistics driven Collection Scorecards
- Portfolio Valuation & Collection Segmentation
- Portfolio Stresses (w. COVID19 Factors)
- Recovery Prediction Models
- Performance maximisation through sound LGD Models
- Cost Optimization & Efficient Debt Management Decisions
The ‘Social Distancing’ way of operation
Now that you have ‘Scienced It’, apply these models into the automated account and case allocation to the field staff.
Manage collections, moving seamlessly away from a physical contact way to a ‘Social Distancing’ way of operation. Organisations now allow employees to work from home, allowing them access to the systems they need to carry out tasks, in a real time or quasi-real time mode. Solutions are available to allow the staff to ‘Collect-from-Home, “On-the-Move”, using ‘Click-to-Call’ with updated information case history trails available to them then-and-there @ home, @ on-the-field etc.
Benefit from Technology
If Customers are ready to pay, instantaneously give them multiple payment options – cash, cheque, online transfers, digital wallets or card. Send out payment links then-and-there via SMS, e-mail, WhatsApp, Facebook Messenger, Skype, Chatbots. Accept money through mobile wallets & payment aggregators and if you need to deal with cash, provide the nearest ‘safe’ Cash Collection Staff or Agent with ‘geo-tracking’.
Keep a digital track of the physical money. Do away with receipt books inventories and the risk associated with exchanging physical material. Issue electronic receipts of cash on the spot, ending possibilities of siphoning and fraud. Accept split payments across different modes.
When you subcontract collections work to agencies, keeping things in control is not easy. Make contract management & compliance maintenance easy for your operations team. Enforce empanelment rules for different types of agencies when onboarding them. Create digital contracts or manage digital copies of contract documents & collaterals in one place. Notify Operations & Collections Managers in case of any discrepancies, slippages, fraud attempts or approaching contract expirations, when managing day-to-day work with agencies with geo-location tracking, tagging and fencing. Survey your agents for health and safety checks.
As accounts move from soft collections to hardship stage lets show some forbearance.
In this context, communicate with your Staff, Agents and Customers. Let them know that you care, want them to economically prosper but also mean business. At Total RegTech Solutions, we help businesses take Recovery and NPL Management to the next level, through a combination of Software Solutions, Risk Model Design & Knowledge Transfer
Visit us at www.totalregtechsolutions.com or Call +973 1700 3357 / WhatsApp +973 36710 300