It is highly impossible to have a good control on any part of finance business without being a tech savvy company.
There are enough gadgets including mobiles and high speed connectivity to have every information and capture any activity very accurately on site and off site.
Top guy need not be a computer wizard or software engineer to run a finance company; he still necessarily needs to be an economist, marketer and financial wizard.
He must be open to the change and he may have to be interested to know what computers and new gadgets can do to mitigate risk and help him have a full operational control.
Whatever computer is capable, must be done through only computers. This drastically saves cost and helps control the business better. Of course, he must choose right software vendor, to really get better return on huge financial outlay upfront.
There was a company who had invested a huge money in collection module of a financial software – Finness. It was not implemented till the author joined the company as collection head.
With implementation, the following were achieved quickly:
With implementation, the following were achieved quickly:
- Centralized control on delinquency; accurate delinquency ratio and rates
- Automated work flow; segmentation was done through queing system
- Tele-calling could be started for Low risk - Low deliquent accounts
- Dunning; collection letters were sent out on time, through collection system
- Customer disputes are known
- Mitigated the risk of cash handling and misapplication
- Daily allocation and assignment of cases to field collectors
- Access to collection system, through inter and intra net
- Accounts of customers at the press of the button; foreclosure data available
- Efficiency and effectiveness could be measured, thanks to analytics.
- Customer Contact / interaction details and feedback were recorded.
- Promises To Pay were to made to pop up on PTP dates, for close follow up.
The company had moved to a position of having the lowest delinquency ratio of 6% on their car portfolio from around 12% ( In fact, the company had no accurate delinquency ratio as it depended on field delinquency data till implemenation of dedicated collection sysytem ) and more importantly, it was useful to maintain accurate customer accounts.
I am sure more advanced versions of many software are available currently to track default accounts from delinquency to collection to losses to legal proceedings to recovery.
Have one, because charge-offs need to be minimised.
