Since the outbreak of the latest financial crisis, debt collection management has become one of the most pressing topics for financial as well as non-financial companies. While drivers vary, from worsening credit conditions resulting in a decrease in overall collection percentages and an increase of customers who "can't pay", to increased competition and need to improve the bottom line, overall debt collection has become more challenging.
We will talk about it with Ubaldo Tambini, Director at CRIF.
Why are you undertaking new research on debt collection topic?
The “world of debt collection” is constantly changing. From previous studies it came out that a path of industrialization was underway and therefore, after three years, we decided to investigate deeper the current situation, in order to see what has changed and which challenges are on the horizon. For these reasons we are conducting various research and surveys in different countries.
What trends are you finding so far?
Well, there has been a giant leap in collection performance improvement with many financial institutions. Much of this progress is due to:
- Use of portfolio segmentation
- Applying a customer-centric approach
- Differentiating collection processes, such as by severity of delinquency
- Taking action as early as possible
- Streamlining collections organization structures, especially in operations
- Strengthening relationship with outsourcers through strategic partnership approach.
Moreover, a path of industrialization is underway also in non-financial sectors, such as telco/media and utilities who are benefitting from best practices in financial institutions and adapting and evolving them towards their own purposes.
