Debt Recovery Tools and Strategies to Improve Debt Collection

Debt Collection

There are many reasons for why customers and clients fail to pay their debts on time. Reasons, such as bad health, bad customer-service experience, or loss of employment may contribute toward debt default. Every year, a lot of money owed to governments, businesses, credit-card companies, healthcare providers, and utility companies cannot be recovered because of ineffective use of tools and technology, outdated information on the debtors, or the debtors just falls off the radar.

Debt-recovery tools and strategies can help streamline communication with the debtors, while also providing them the option to choose among various debt-payment solutions.

To help you recover your debt, the following is a list of tools and strategies that you need to employ.

Get Professional Help for Debtor Tracing

Sometimes, debtors move to a new place without notifying the debt-providers of the change in address, making it hard for the debt providers to then locate their whereabouts in case of default on a repayment. It is understood that, in cases of shifting to a new place, the debtor will let the provider know the forwarding address to the new location. But, if a forwarding address is not provided, commercial collection services will help you pin-point the location of the missing defaulters.

Auto Generation of Your Expected Debt Statements

Auto-generated notifications about the status of debt-recovery process, sent to the debtor via SMS or Email, can also take the burden off the shoulders of the debt collection agents.

These messages are tailored to the debtors’ preferred channels of communication. The digitization of the debt-collection process not only saves up on paperwork and time for the debt collectors as the process becomes automated, but the borrowers, too, benefit because they don’t have to make multiple trips to the debt-collectors’ offices.

Furthermore, an instant repayment solution option, sent along with a message, called UPI debt repayment, can really streamline the process.

Multi-Channel Contact Technique

The digitization of the debt collection process helps lenders recover loans in a timely manner. The most convenient method for reaching out is through digital channels, since everyone nowadays has an email address, a cellphone, and social media accounts. Due attention should be given to personal contact preferences, and as well as multi-channel techniques need to be adopted for communication.

Machine learning, advanced analytics, and automation can all send tailored messages at particular times to the customers’ preferred channels. Investing in Al, data analytics, and automation will help you easily organize customer contact preferences. The cost of implementing these latest technology tools is insignificant when compared to its return on investment.

Real-Time Monitoring of Transaction Activity

Debt collection companies can monitor a debtor’s transaction activities in real-time. Such data is valuable to the company for assessing the debtor’s ability to pay. Secondly, this also helps with keeping track of paid and unpaid debt. You definitely do not want to bother your customers with messages that don’t concern them. Putting AI tools at the front and center of the debt-collection process will make debt recovery a manageable scenario.

Improved Self-Service Abilities

Every customer-oriented debt collection strategy enhances the success rate of debt collection while, at the same time, decreasing operating costs. Implementing self-servicing solutions turns the entire debt collection process from an impossible nightmare to something that is effortless. Such approaches enable borrowers to follow a self-service option for clearing their overdue balances. By using different tools for debt collection, lenders improve customer experience, automate debt collection, and facilitate compliance through self-servicing systems.

Utilize Account Receivable Scores and Debt Recovery Analytics

Debt collectors need to change the way they think about non-paying customer accounts. Instead of considering them as defaulters, they must focus on the whole account receivables cycle. Implementing a multi-pronged approach towards debt recovery through the use of analytics, an account receivables scores can bring better revenues. For lenders to target defaulting accounts, it’s important to follow what the analytics are saying.

Establish Scheduled Follow-Ups for Tracking

Lenders don’t have to resort to extreme measures, like legal actions, to recover their debt. Establishing scheduled debt payment reminders like emails and SMS texts are some of the easiest ways to follow-up with a borrower.

Systemic follow-up tracking of a borrower’s account underlines the importance of assessing customer seriousness in repaying debt. Besides, scheduled follow-up tracking is considered a less-intrusive approach to recover debts.

Use Tools for Efficient Debt Recovery

There are various debt-collection apps available that facilitate debt recovery. A debt-recovery app is a debt defaulting management solution that can help lenders with timely collections, which makes the process of debt recovery easier. Such a specialized collection app eliminates the need for paperwork and streamlines the collection process by easing the troubles of collection agents. Also, the use of these apps can eliminate human error.

The debt recovery apps have many features that can simplify debt collection process, such as PTP tracking, real-time customer information, follow-up tracking, location tracking, address locator, and collection updates via mobile and web.

It offers a loan management solution and fills the gaps in the debt collection process. Furthermore, operational efficiency is improved by incorporating these apps along with the added benefit of eliminating human error. Further, operational costs are reduced, and the placement of AI tools for debt collection increases ROI for the company.

Conclusion

Although companies might have a complete record on the loan defaulters, the process of loan recovery is not straightforward. There is a growing need for AI tools and applications in assisting with loan recovery. When a company needs to recover debt, they don’t have the strategies, tools, or channels for efficient loan recovery. Data on customers that you can use to track or communicate is invaluable during this process. That’s why using debt-recovery strategies and using different AI tools and techniques can help make the debt collection process more efficient and as well as reduce costs. These tools and strategies also enable the lenders to recover debt in a timelier manner.

 

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.