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The collection process often creates several hurdles for lenders. The process directly affects the gross recollected amount of the lender’s portfolio. A smooth, data-driven process ensures lower delinquency and reduced collection costs and high customer satisfaction.
Challenges in collections process
Borrower fails to repay - customers fail in repaying either due to
Technical issues with eNACH or payment systems
Lack of balance in the mandate account (and resultant inability to repay)
Lack of intent to repay
No access to real-time data - Lenders don’t have real-time access to data about the borrower's financial condition after the disbursement. This means that they are (at least partially) going in blind when it comes to recollection. As a result, they are forced to use inefficient one-size-fits-all strategies and are unable to allocate their collections resources effectively.
How to make collections efficient?
Nevertheless, there are different ways in which to address these challenges for effective loan repayment. These include:
Leverage real-time cash-flow data - Leverage real-time data on the borrower’s financial position such as account balance, cash-flow, new loan obligations, other upcoming EMIs.
Identify risky borrowers in advance - Identify users who are at risk of non payment prior to the due date
Prioritise collections resources - Intelligently allocate collection resources by segmenting borrowers based on real-time data on the borrowers financial position.
Tailored Communication - Tailor the message, channel and timing of communication to the borrowers.
This is what FinBox’s CollectX does with its range of features designed to make recollection more efficient.
Introducing FinBox CollectX
FinBox CollectX is a collection prioritization and early warning system for lenders with a digitally acquired portfolio. It augments their existing collections system. With CollectX, lenders drive upto 50% higher collections efficiency using real-time cash-flow insights of their borrowers.
CollectX’s features and functions include:
Collection Prioritisation based on real-time data - CollectX leverages real-time cash-flow data of the borrower. It gives lenders precise insights on their borrowers by assessing the financial position of the borrower, account balances, credit hungriness, over indebtedness, other credit obligations. It generates prioritisation buckets against each borrower
Identification of risky borrowers such as those with low balance, multiple credit obligations, upcoming loan dues, and increased credit utilization.
Prioritisation of borrowers for collection efforts based on -
Updated financial data of the borrower
Other debt obligations
Failed repayment on other obligations
Timely alarms before loan due dates - CollectX flags risky borrowers 5 days prior to their due dates, so that lenders can allocate collections resources strategically and use targeted communication.
Recommendation of repayment dates for failed eNACH payments - CollectX checks the borrower’s financial position and balance sufficiency to recommend a repayment date with a high chance of success.
Flexible Integration with your existing decision system - integrates with your existing decision system and is connected by API, FTP.
CollectX is built on state-of-the-art Artificial Intelligence models and is in alignment with Data Empowerment and Protection architecture for complete security and privacy.
Benefits of CollectX
Lower costs of collection - Lenders can prioritize their resources and tailor communication accordingly
Lower delinquency rates - thanks to timely alarms on probably defaults prior to the repayment date
Improved bounce payment success rate - CollectX recommends e-NACH presentation dates for failed payments. This boost chances of success of repayment.
Increased number of repeat customers - Smooth collections processes improves customer satisfaction. This means they are more likely to convert to reapply for credit from the lender
How CollectX works
CollectX seamlessly integrates with your existing decision system and takes less than 3 days to go-live. Here is how it works:
Step 1 - Lenders share their portfolio with FinBox via APIs or CollectX Batch processing mode
Step 2 - CollectX generates a list of borrowers in various collection prioritisation buckets 5 days before the due date. It collects real-time user device data from FinBox DeviceConnect.
Step 3 - CollectX pushes this data to the lender's current decisioning systems via APIs or FTP (in the form of a CSV).