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Bank Collection Software Increases Asset Recovery For Credit Unions and Financial Institutions

In recent years, business owners and personal debtors have started to use more credit.

With the increased influx of credit usage, state and federal regulations compelled banks and credit unions to automate debt and asset recovery. This is where debt collection software helps lenders make significant strides in improving their operational efficiency.

Bank collection software has brought a revolution to asset recovery. Tasks like payment reminders are done automatically, allowing debt collectors to prioritize more pressing matters. This can increase debt recovery by several times, reducing bad debts and making your Profit and Loss statements look better.

Automated Asset Collection Management System

An automated debt collection management system uses technology to streamline and automate the more mundane and repetitive tasks that do not necessarily need human intervention. Collectors (a bank or credit union lender) use debt collection management system to:

  • Maintain proper order and manner of collection steps through task lists
  • Make it easy for the collectors to track customer credit and account process by way of simplification
  • Provide detailed information about the entire debt collection and payment process
  • Flag the absence of a mandatory management step

How Banks Use Collection Software For Increased Asset Recovery

With the advent of state and federal regulations, banks and credit union collectors are required to abide by debt collection rules. By using automation and AI, lenders and collectors can comply with these rules and enforce recovery actions better.

Banks use AI to perform tasks like making calls to notify debtors based on their status and history while maintaining a relationship with them. Human error throughout the process is non-existent, as the AI keeps detailed case reports and tracks the completion of the collection process. These reports are entirely digital, eliminating the possibility of being mishandled or missing paper documents.

Moreover, the software can be customized to suit the needs of any individual organization. No institution will have to spend an extended period of time adjusting to the system, as the software will do so for them.

Features Of Automated Debt Collection Software

Some key features of debt collection software that streamline the debt-collecting process and make it simpler and more convenient for the lenders are:

  1. Automated Workflow

The routine task automation mentioned earlier is one of the most elementary features in a debt collection software. The workflow can be set up with a multitude of options to cater to any set of rules.

  1. Easy Integration

Automated debt collection software is often compatible with most banking software and can be tweaked accordingly. The ease of integration is a much-needed feature in any collection software, decreasing the time required for any system to fully switch to automation.

  1. Better User Experience

Simple user experience is key to any debt collection system, as the software must have universal usability to ease the users through the process. A clear-cut outline of the staff’s targets and case list makes team management easier and clarifies any issues they may have.

Functions like automated task lists for credit types further improve the flow of the process, streamlining it for both the staff and the customers. The software also provides 24/7 support and maintenance for added user convenience.

  1. Customizability

A software allowing the staff to use customizable queues and filters will help them create the workflow that maximizes their efficiency. Searching and segmenting cases through custom queues will shed light on the trends within a community for the bank or credit union.

Benefits Of Automated Debt Collection Software

Here’s how debt collection software revolutionized the process of asset recovery:

  1. Efficiency

Debt collection software, web-based or on-premise, create a better and more efficient work environment. This benefits both the debtors and the collectors, as the reduced work performed by the latter means they can focus on the former well.

A study conducted by the Aite Group predicted that 43% of banks will have integrated AI in one form or another by 2021. As of April 2022, their prediction has been proven correct, with nearly 40-50% of the banking services using AI in their processes.

  1. Increased Customer Engagement

Automated bank collection software increases customer coverage with fewer agents involved while ensuring faster recovery. Non-priority queries are handled by collections bots, while agents attend to more pressing questions, improving customer engagement by up to 30%, as shown in a study by Forrester.

  1. Reduced Operating Expenses

Improved debt collection strategies formulated with debt collection software in mind can save a lot of time and operating costs for the bank. As described in a study by the Boston Consulting Group, AI integration can help banks reduce operating costs by up to 50%.

  1. Real-Time Monitoring Of Compliance Status

Automated collection software ensures that the banks comply with FDCPA, TCPA, and other banking system policies, preventing any overstepping of the rules. This, in turn, helps to streamline the compliance process as well.

  1. Greater Revenue Recovery

The bank’s staff are able to utilize the software and maximize debt collection with the information it provides. With this, the time agents need for researching and verifying any given collection data is reduced drastically. This, in turn, keeps the collection smooth, timely, and efficient. Debt collection software keeps track of these expenses and ensures that reminders are sent and payments are collected in a timely fashion.

A study by McKinsey has shown that approximately one in 10 American households have incurred credit card debt of more than $10,000. Moreover, the average American citizen spends $1,292 annually on interest payments.

  1. Reduced Expenses

Web-based debt collection has become critical in keeping the process going smoothly. It allows employees to work from anywhere and the software maintenance and updates take less time.

Moreover, web-based software is often lighter on the bank’s expenses than the on-premise versions, simply because the former incurs no server charges. Web-based software allows debt collection to continue without a hitch, conserving the institution’s resources in the process.

Debt collection software is crucial for a financial institution to recover with greater efficacy and compliance as quickly as possible. One of the most important aspects of the software is the ability of the institution to reassign their agents to more revenue-focused tasks.

Automation can multiply the number of clients and accounts a financial institution is addressing at any given time. The benefits it brings to a bank is invaluable and the rising number of institutions adopting it is a testament to that.

With the features they bring, automated collection software looks to be the future of asset recovery processes.