Collections Dossier: July 2024

The promise of generative AI for credit customer assistance

The rapid rise of generative AI (gen AI) is empowering credit customer assistance and collection functions to leverage its potential fully. Read this article by McKinsey, which delves into how Gen AI is enhancing customer interactions by personalizing messages, automating tasks, and empowering teams with advanced capabilities. This not only boosts operational efficiency by potentially cutting costs by up to 40%, enhancing recovery rates by up to 10%, and elevating customer satisfaction by up to 30%, but also introduces transformative use cases such as automating routine tasks, analyzing interactions for actionable insights, and providing real-time support to agents.

However, implementing Gen AI poses challenges, requiring meticulous planning to seamlessly integrate AI, ensure regulatory compliance, and optimize its application throughout the customer journey. Looking forward, gen AI holds promise in enabling organizations to internalize collections operations, improve financial health, and strengthen market competitiveness through superior customer service delivery.

Prudence, Profits, and Growth

The global fintech market is poised for substantial growth, projected to reach $1.5 trillion in revenue by 2030 despite recent funding and valuation challenges. Game-changing technologies like GenAI and the vast population of unbanked individuals present significant opportunities. However, the focus has shifted from rapid growth to prudent and profitable expansion. This shift is reflected in the improvement of EBITDA margins and the rise of profitable growth among fintech companies.

Read this report by BCG based on interviews with over 60 fintech CEOs and investors, where they outline four major themes shaping the sector, including the growth of embedded finance, the rise of connected commerce, the impact of open banking on advertising, and the productivity gains from GenAI.

Additionally, the report outlines strategies for navigating the evolving fintech landscape. It emphasizes the need for fintech companies to prioritize risk management and compliance, enhance profitability, prepare for IPOs or strategic sales, leverage digital engagement platforms, and advocate for comprehensive digital public infrastructure.

RBI mandates lenders to listen to loan defaulters before declaring accounts as fraud

The Reserve Bank of India (RBI) has updated its master direction on "Fraud Risk Management," mandating that lenders must issue a detailed show-cause notice (SCN) to individuals and entities accused of fraud before declaring their accounts as fraudulent.

This change ensures adherence to natural justice principles, allowing borrowers at least 21 days to respond to the SCN, and the master direction applies to commercial banks, non-banking financial companies (NBFCs), financial institutions, and cooperative banks. The policy requires a board-approved fraud-risk management strategy that is reviewed every three years. The directions outline various fraudulent activities, including misappropriation of funds, manipulation of accounts, and fraudulent digital transactions.

Read Mayank Khera 's, Co-founder and COO, of Credgenics, perspective on the matter in News 18 and Business Today, where he has welcomed this move by the RBI, emphasizing that it ensures fairness, transparency, and accountability in the financial system.

The Impact Of ODR In Redefining Financial Dispute Resolution For BFSI

The financial services ecosystem in India has seen exponential growth, transforming how people access credit, manage finances, and conduct transactions. Fintech platforms have simplified credit access, particularly for underserved segments, leading to better financial empowerment. However, the debt repayment process is often plagued with hassle and uncertainty, leading to congestion in the legal resolution phase.

Read this article by Mayank Khera , Co-founder and COO, Credgenics, in LawBeat, where he discusses innovative solutions like Online Dispute Resolution (ODR) that are addressing the gaps and transforming the financial dispute resolution landscape by offering digital-centric, efficient, and transparent dispute resolution without court intervention. He talks about ODR’s future, which involves integrating AI and Machine Learning, for enhanced security and efficiency while addressing challenges like data privacy, digital inclusion, and regulatory support.

Empowering Rural India: How technology can address debt challenges?

Rural indebtedness in India is a significant challenge, burdening many agricultural households with debt. Limited access to formal banking services and reliance on exploitative moneylenders exacerbate the problem. However, as India embraces the digital revolution, technology’s potential to manage rural indebtedness and promote economic empowerment is immense.

Read this article in TechGig authored by Anand Agrawal , Co-founder and CPTO, Credgenics, which explores how technology can address debt challenges in rural India. Enhanced access to financial services via digital platforms can alleviate logistical challenges and reduce cost of access, thereby supporting financial inclusion. User-friendly interfaces and financial literacy initiatives further empower rural population. Advanced security measures and the integration of cutting-edge technologies such as AI and ML ensure secure and tailored banking services. For successful implementation, a collaborative effort among policymakers, financial institutions, and tech innovators is essential. Such collaboration can lead to economic empowerment and sustainable growth in rural India, unlocking vast opportunities for its communities.

What can you do if you have defaulted on your personal loans? Experts explain

Managing defaulted personal loans requires clear communication and proactive engagement with lenders. This ensures effective management and swift resolution of defaults, leading to minimal adverse consequences such as credit score impacts and legal actions.

Read this article in LiveMint, where Mayank Khera, Co-founder and COO of Credgenics, emphasizes the importance of promptly addressing default situations and engaging with lenders to explore resolution options. He highlights the repercussions of defaulting on personal loans and stresses the significance of maintaining open communication with lenders to negotiate repayment plans or explore assistance programs. This approach is key to mitigating the long-term effects of loan defaults and facilitating credit recovery.

Understanding Loan Delinquency: Causes, Consequences, and Solutions

Navigating the world of loans can be challenging, and missing a payment can have serious consequences. Our latest blog breaks down everything you need to know about loan delinquency - why it happens, the impact, and how to prevent it.

Leveraging AI and Analytics in Loan Collections

Artificial Intelligence (AI) and analytics are transforming the loan collections processes for banks and lenders, enabling a more efficient and customer-centric approach.

By leveraging AI, lenders can automate routine tasks, predict repayment behaviors, and identify high-risk accounts with precision. Analytics provide deep insights into customer data, allowing for personalized communication and tailored repayment plans. This combination of technology and data-driven strategies enhances the customer experience by making interactions more relevant and empathetic.

Check out this infographic to see how innovative technology and data-driven insights are redefining loan collections.Visit us to find out more about our market-leading loan collection technology platform at www.credgenics.com

Industry Roundtable on Online Dispute Resolution and Collections

Credgenics ODR & Collections Roundtable 2024, held in association with Dun & Bradstreet at Taj Palace, New Delhi, was a resounding success.

The conference saw esteemed members of the judiciary and senior leaders from legal, credit and collections functions across the banking and financial services communities come together to share their perspectives and indulge in insightful conversations on Online Dispute Resolution and its potential to transform the resolution of financial disputes.

Each element, from the speaking sessions by distinguished industry experts, to the thought-provoking panel discussion, was an incredible opportunity to connect, collaborate, and learn from the power of shared experiences.

Hon’ble Ms. Justice Indira Banerjee, Former Judge of the Supreme Court of India - Chief Guest at the Industry Roundtable on ODR & Collections

Credgenics was honoured to have Hon’ble Ms. Justice Indira Banerjee, former Judge of the Supreme Court of India, as the Chief Guest at our Industry Roundtable on Online Dispute Resolution scheduled at the Taj Palace, New Delhi, on 12th July, 2024. Her profound insights on the Indian legal landscape and her commitment to justice serve as a timeless inspiration for future generations.

Debt Collections Platform for Asset Reconstruction Companies

In view of the critical role that Asset Reconstruction Companies (ARCs) play in consolidating debt, the implementation of advanced digital technologies and analytical tools is essential. This approach is vital for boosting collection success rates and improving performance across various loan segments.

Credgenics offers a debt collections technology platform that helps ARCs recover stressed retail assets more effectively. This platform uses advanced digital and analytical tools to enhance debt collection strategies. With Credgenics Collections Platform, ARCs can accelerate NPA recovery with technology and data, reduce the cost of outreach with higher connect rates, provide real-time insights with a comprehensive dashboard, seamless LMS integration for effortless usage, and simplify the approval process for debt settlement.

Learn more about how Credgenics enables ARCs to reduce operational costs with automated and digitized processes and improve resolution rates.

Case Finder

In the ever-challenging landscape of legal debt recovery and financial dispute resolution, efficient case management is crucial. Traditional methods of case management, characterized by fragmented data, manual searches, and missed updates, struggle to meet the evolving needs of the legal world.

Case Finder, a powerful feature of Credgenics' Litigation Management System (LMS), is set to transform how legal teams discover, manage, and monitor cases, streamlining operations and boosting productivity. This innovative solution offers powerful keyword searches, instant case saving: Effortlessly store and access critical information, real-time updates to stay informed on case statuses and developments and seamless eCourt Integration.

Learn more about how Case Finder can centralize your case management, simplify workflows, and boost legal team's efficiency. https://bit.ly/3XKvSgF

Credgenics Bioscope

We are excited to introduce “Credgenics Bioscope,” our quarterly throwback series. This initiative aims to spotlight the vibrant, dynamic, and fun culture at Credgenics, showcasing our employee engagements, interactive sessions, team-building activities, and enriching learning programs. Each edition will take you down memory lane to witness the camaraderie and vibe that drive our team.

Join us in celebrating the moments that make Credgenics a super exciting and happening workplace!

Transforming Debt Collections: Best Practices for Seamless Customer Experiences

In the digital age, delivering seamless customer experiences (CX) is paramount for lending businesses. By crafting an effective, digital-first collections strategy cantered on exceptional CX, lenders can improve satisfaction, minimize delinquencies, and maximize recoveries. Additionally, this approach helps companies foster trust, long-term growth, and positive relationships with customers.

Read this blog that explores industry-leading practices that transform debt collections into immersive, engaging journeys that include prioritizing borrowers' expectations for hassle-free, transparent interactions to build trust and drive compliance, leveraging data insights to personalize collection strategies, tailoring communication, optimizing efforts, and embracing omnichannel engagement across borrowers' preferred touchpoints for enhanced accessibility.

Case Study - Scaling up collections with ML-based intent to pay prediction

The customer, a prominent digital lending platform in India, operating across more than 150 cities, focusing mainly on Tier 2 and Tier 3 regions, disbursed over 1 million loans, averaging 10,000 loans daily. The lender wanted to optimize collections and address challenges including high operational costs, inefficiencies in calling, increased call waiting time, idle time, unanswered calls, and a poor borrower experience due to the lack of response pattern assessment.

Seeking a solution, they partnered with Credgenics and introduced ML-based segmentation to assess borrowers' intent to pay, implemented an advanced contact strategy, and deployed a predictive dialer for efficient agent allocation.

Download this case study to understand how this approach improved borrower engagement and talk time, while reducing agent idle time and churn. As a result, the customer experienced a 24% reduction in churn rate among nonresponsive borrowers, a 33% increase in collections from previously unanswered calls, a ~12% increase in overall paid rates, and a 12% increase in overall pick-up rates. The use of predictive dialing and real-time performance tracking enhanced productivity while the ML-based intent-to-pay prediction and optimized calling strategies significantly boosted collections and improved borrower experiences.

Customer Speaks

Credgenics, the leading provider of debt collections technology solutions, has enabled Moneyview, a leading online platform that offers a full suite of personalized financial products, to adopt a digital-first collections approach.

This includes leveraging omnichannel communications and advanced analytics, leading to improved customer engagements, optimized field collections, and an enhanced customer experience.

Vaibhav Karolia, Sr. Manager (Business Analytics) at Moneyview, shares how Credgenics has been a valuable partner in Moneyview’s journey toward boosting financial inclusion and collections performance.

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