How banking Industry is using automation for collecting and recovering loans

As Indian economy grows at a very fast rate, one sector that is seeing tremendous growth is banking sector. We see a huge surge in demand for finance from small scale and large scale enterprises alike. Banks, credit card companies and other financial institutions give loans and advances to individuals and small Businesses. There is a huge collection and recovery process that is generally outsourced by most of the banks. This is a big Industry.

Although most of the banks have automated Core Banking functions. Their collection process grossly remains manual, maybe because it is outsourced to collection agencies and they have not been deploying technology because of rising project expenditure.

Manual Process of Collection Agencies

Banks / Finance companies share a spreadsheet containing the list of collectibles to their collection agencies periodically. The team leader of these agencies then invests great deal of time and effort to segregate the data amongst agents depending on their capabilities.

The complete cycle of recovery is done by collection agencies, everything from making calls, on-field collection of payment and managing data. The data so collected is shared back with the bank. The efforts of the agents is not recorded or is very unsystematic, therefore can be difficult to analyses.

The main disadvantage of above manual process is that it is extremely labor intensive and prone to errors. Also this kind of process does not allow the collection agency to grow more than couple of hundred people because manual supervision and reporting has limitations. Cost is also very high because a supervisor or Team Leader is required for small teams of 8-12 people.

Automating the Process of Collection Agencies

Now this entire process is getting automated using the next generation software tools and technologies. Modern day Collection Management System (CMS) consists of Call Centre Solution + CRM + Mobile App for field agents + reporting tools.

Now when banks give collection list it is imported to the CMS with a single click, based on the template for that particular bank. The list also gets distributed and assigned to calling agents, almost automatically.

Then comes the role of Call Centre Solution, Agents don't have to dial the calls, but the software does this for them using auto dial feature. Even call dispositions are marked automatically. Eg: if someone does not pick up the call, software will automatically dial that number after 2 hours, while agent does not have to do anything for it.

Call Centre solution offers inbuilt call recording, automatic call distribution and auto dialing. Also it displays complete information of borrower while Agent is talking to the borrower. This solution also offers detailed reporting about the efficiency of the agents. No more manual reporting required here. It also manages next follow ups and reminders for the them, so that follow up is never missed. Auto dialer will dial the follow up calls immediately.

Now, if some borrower requests collection agency to send somebody to collect the money, the call centre agent simply assigns that entry to the field collection person, who receives a notification on his Mobile app with complete details of borrower, his address, appointment time etc.

Now when field agent collects the payment, he enters that on his Mobile App. Borrower will receive payment confirmation on his mobile as SMS. Even the call centre software which the agent is using is also updated with this receipt. Final part of automation comes when banks require reporting during and on month end. The CMS software has readymade reports as and when required by banks.

Conclusion

Lots of time and efforts are saved with the help of this new Technology. It's not that this kind of technology that did not existed before, but the new concept of SAAS has made it possible at economical costs. Banks and collection agencies and all their calling agents and field agents, not only have lesser work load but also lesser stress, and a much better and efficient working style.

This is truly a Digital Transformation for Collection Process of banks, Credit
Card companies and other Non-Banking financial institutions.

- Limesh Parekh, CEO of Enjay IT Solutions