How Can Collections Management System Help Banks?

Credit Collections Management Software (CCM) is a suite of integrated business applications that extend a bank’s accounts receivable and accounting system to facilitate credit management, billing and invoicing, remittance processing, dispute management, and collections processes. A credit collections management software typically supports credit facilitation, billing and invoicing, remittance processing, collections management, dispute resolution, and credit risk assessment.

Banks spend a huge share of their income every year on CRM & ERP software, looked upon with the primary motive of getting more leads and closing more deals. But one critical part of the entire process, which is debt/credit collection, is conveniently sidelined. This cumbersome job of collecting your own money requires a lot of client chasings along with reminders and callbacks, let alone the host of clerical tasks that come with data management. Non-specialised software is not very efficient in handling such tasks. The collections module in your existing system may still require you to print ageing reports and manage data in spreadsheets. Precisely, a dedicated ‘collections management’ software is what banks need to take care of their debt collection.

With the increasing volume of accounts and growing complexity in client services, banks and financial institutes are demanding more sophisticated and advanced processes which can run credit risk analytics before lending and manage loans and collections for them. In short, banks need an accounts receivable collection software to save time spent on administrative tasks and automate redundant tasks so they can focus on what matters most, collection! Here are a few ways in which collection software can greatly help.

Faster Repayments

It is estimated that collection management software can speed up the process of recovery by around 23% as compared to the manual process. Thus, theoretically, what took 60 days to collect would require less than 45 days. This gives you 15 days worth more of interest.

Predicting Cash Inflow

Using predictive analytics in banking, the outcome of lending can become more predictable. It can forecast what might happen in the future with an acceptable level of reliability and incorporates what-if scenarios and risk assessment. CRIF provides a full portfolio of credit risk modelling tools and expertise, empowering business analysts to develop, build, test, deploy and manage predictive models.

Reduce bad debt and Focus on most profitable customers

Companies using accounts receivable collection management software systems typically reduce bad debt by 15-25% because they identify and resolve disputes sooner, preventing them from ripening to the point where they become uncollectable. This software can let you identify unused credit lines and work with lower risk customers to help them buy more products and services. CRIF’s scoring models such as application scorecard, collections scorecard and behavioural scorecard , can predict the probability of a client behaving in a certain way, predict their profitability and side out risky customers. This can help banks focus their forces on specific clients and develop a customised collections strategy for each type.

A Collections Management solution comprehensively addresses the needs of Financial Institutions that require a centralized & automated system for managing their collection operations and in the process, allow Financial Institutions to enhance their customer relationships, facilitating future sales opportunities.