The Recoup: Upcoming strategies in debt recovery

The Recoup: Upcoming strategies in debt recovery

We’re back with another edition of Recoup - SpoctoX’s quarterly newsletter highlighting important events and recent developments in the debt collections industry. With this initiative, we deliver news and key insights that not only add to your knowledge database but also keep you updated with trends and shifts in the industry.?

In this recap, we explore the profound impact of digital debt collections on financial institutions, highlighting the changes brought about through AI integration. Adoption of digital collections is steadily increasing, driven by AI and digital technologies that promise enhanced efficiency, cost-effectiveness, and regulatory compliance. We will also focus on the changes brought about by Budget 2024 and its implications on the debt collection ecosystem.?

At SpoctoX, it was an eventful quarter filled with recognition for our work,and? interactive discussions and collaborations. Here’s a summary of what we did this quarter.

Compliance as a cornerstone: Collect CoLabs 4th edition

We conducted the 4th session of Collect CoLabs, our in-house collaborative discussion forum where experts from the financial services industry come together to highlight issues, trends and put forth their opinions and recommendations aimed at the evolution of the debt collection process. The session’s focus revolved around the theme of compliance and building sustainable practices in collections.

Some key takeaways from the session are detailed on the following link.


On the thought leadership front, Gaurav Kumar, Group CEO, SpoctoX - A Yubi Group Company, shared his insights on how combining digital and physical methods of debt management could lead to a more sustainable and effective collection mechanism.

Article: Debt Collection using a Phygital Approach

A path that combines the capabilities of physical and digital debt collection is the appropriate way forward to channel a holistic debt collection strategy.?

Gaurav Kumar, in a conversation with CXO Today explores the direction in which the debt collection industry could evolve in the upcoming years and the strategic initiatives that SpoctoX is taking to spearhead this change.

On the recognition front, SpoctoX created a couple of waves this quarter.

  • Excellence in Innovation & Transformation in Debt Management, 8th Annual India Banking Summit & Awards 2024

  • Best Innovative Debt Collections Platform, NBFC & Fintech Summit and Awards 2024

These recognitions resonate with our team's hard work and dedication to transforming debt management through innovative solutions.?

Around the world in 90 days: Debt Recovery Edition

The Union Budget had a number of revisions for the debt recovery ecosystem.

Key highlights included:

  • Regarding the effectiveness of the National Company Law Tribunals (NCLTs) under the Insolvency and Bankruptcy Code (IBC), Sitharaman highlighted that unpaid debts from over 1,000 companies have been resolved, leading to a direct recovery of ?3.3 lakh crore for creditors. Additionally, 28,000 cases involving more than ?10 lakh crore were resolved even before formal admission.
  • To accelerate insolvency resolutions, the government aims to amend the IBC, reform and enhance existing tribunals, and set up additional tribunals.
  • The economic survey highlights that the IBC has been acknowledged as an effective solution for tackling the twin balance sheet issue, where banks face a high level of NPAs and corporates are overleveraged. ?

"Appropriate changes to the Insolvency and Bankruptcy Code and reforms for strengthening of the NCLTs will be initiated to speed up the insolvency resolution. An integrated technology platform will be set up to improve the outcomes under the IBC for ensuring consistency, transparency, timely processing and better oversight for all stakeholders."

- Nirmala Sitharaman, Minister of Finance & Corporate Affairs , GOI


In other news, an article from The Economic Times talked in depth about the revolutionary nature of digital debt collections and the financial impact it has had on the organizations opting for it. Some key takeaways included:

  • Financial institutions spend close to 50,000 crore towards debt collection . AI integration holds the potential to cut up to 40% of this expenditure.
  • The adoption of digital collections has increased from 10% to 20% in recent years and is anticipated to reach around 40% by 2028.
  • AI and digital technologies are driving a significant transformation towards a more comprehensive collections strategy, skillfully balancing efficiency, cost-effectiveness, and compliance.
  • Fintechs focused on digital collections, equipped with advanced platforms and AI capabilities, have swiftly evolved from being innovative options to essential solutions.
  • The role of traditional field collections, once central to the industry, is projected to decrease from 40-45% in 2023 to below 25% by 2028.
  • AI and digital tools have enabled lenders to cut credit losses by up to 50% and achieve notable recovery improvements of 20-30%, even in difficult delinquency scenarios.


Another eye-catching news report from The Hindu talked about changes in the debt ecosystem caused due to micro-finance - with personal loans disbanded via digital apps observing the highest share of overdue accounts. The main highlights stated are:

  • The high delinquency rates among small borrowers with personal loans below Rs. 50,000 is a notable concern in the financial sector. According to an RBI report, a significant portion of these loans was issued by NBFC-Fintech lenders, which are heavily involved in digital lending through apps that process loans quickly.?

  • Google reviewed and moderated the availability of loan apps on its Play Store. Between April 2021 and July 2022, they assessed between 3,500 and 4,000 loan apps and subsequently removed or suspended over 2,500 of them.

Did we pique your interest? Stay updated with Spocto X (A Yubi Company) for more insights and subscribe to The Recoup – your essential newsletter for all things debt collection.?

Until next time!

ajit singh

digital debt counsller at spocto - A Yubi Company

4 个月

Thanks for sharing

MANOJ KUMAR

Operations Supervisor at ONS SOLUTIONS

4 个月

Very informative

Mohit Ghildiyal

Leading Strategy and Analytics@ Creditas | Six Sigma | Data Science | Problem Solving

4 个月

Good progress by the NCLT under the IBC framework. Banks need to streamline their resolution timelines and boost their resolution rates. While the number of resolved cases has increased year-over-year (from 189 to 270 cases in one year), we still have around 7,000 pending cases.

Ankur Doda

Director Debt Management company dedicated to helping banks / Nbfcs recover outstanding receivables.

4 个月

Insightful... Request you to also keep sharing new tools of digital collection so that we all are enlightened

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