For those that do not work in the industry, the thought of the collections process may be somewhat scary; threatening sheriff agents being the main thought that springs to mind. The process of recovering debt is in practice, very different from this mental image. Indeed, only a tiny percentage of debts end up in the hands of court officers following instructions from a County Court or the High Court.
The process for the recovery of bad debts is however beset with inefficiencies. Debts can be notoriously trying to bring in, involving considerable amounts of manpower, and taking in time and effort. For the debtor also, the collections process is notoriously cumbersome, as well as being potentially embarrassing. The need to forensically examine a debtor’s bank statement information, income and expenses mean the process is more akin to a probing exam, than a transaction of funds.
With a process that is ripe with inefficiencies and is costly and timeconsuming both for creditor and debtor, it is right for new systems to come in and improve what is there currently. As stated in the introduction, currently Collections and Recoveries can be defined as:
- Requiring of extensive manpower
- Time consuming
- Providing a poor customer journey
At DirectID we became aware of the problems within the current setup when we spoke to some of the leading companies in the field, including financial service firms. They described some of the many challenges that are currently faced within the space.
Working on a process that is slow and cumbersome has direct impact on the size of their bad debt book, the cost involved with calling in this debt, and the resultant affect it can have with regulators are all of great importance. Without throwing resource at the problem, it can be difficult to speed up the recovery process.
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