Soft-collection Renovation for a Retail Bank

Retail Bank

Banking practices show that bad debt portfolio size can be significantly decreased due to an effective Soft-collection stage. It can prevent potentially toxic loans from turning into actually problematic ones.

Our client – further referred to as the Bank – came to the point when its Soft-collection lost efficiency and became the bottleneck in the workflow. Renovation could save the situation.

Client’s profile

The Bank is one of the significant players in the commercial retail banking sphere in Central Europe. Retail lending is the main operational field for our client. Its main area of interest embraces credit card issuance, retail lending, and deposits.

The Bank is collaborating with many large retail chains. It is represented in over 100,000 points of sales and has more than 150 branches.

Client’s Requirements

When the Bank’s management got in touch with us, the necessity to remaster the debt collection system was vital. Our company was recommended to the Bank by FICO – one of the largest vendors of financial software solutions.

The Bank had an implemented debt management software solution from FICO. The debt management system fully covered the Bank’s needs. But it was outdated and was not supported by the vendor anymore.

It was decided to replace the installed software with a new analogous FICO product to remove the bottleneck both in performance and accuracy. The remastered system should become a basis for the new debt-collection automation technology.

Bussiness challenges

In the first step, our team organized a series of meetings with the Bank’s representatives. After the requirements for the new debt collection system had been shaped, our experts analyzed the existing solution for weak points. 

In the course of analysis, the following flaws were determined:

• Obsolete, unsupported technological platform Capstone Decision Accelerator.
• Outdated and unstable front-end technology.
• Low performance and unsalable existing debt management platform.
• Manual processing of info extracted from Data Warehouse (DWH).
• Non-automated business processes in the collection department.

The fulfillment of the requirements of the Bank was complicated by facing a strict deadline. Development and deployment of the new system were to be done within 6 months.

Implementation

During the negotiations, the Bank and our company agreed on the necessity of migration of the functions from the existing system into the new one. And the new debt management system should be fully customizable and more productive.

Both parties were working hard and thoroughly for 6 months. During the period of system renovation, all the functions required by the Bank for the Soft-collection stage were embedded in a new software solution and new decision-making strategies were deployed in BRMS.

Solution Delivered

In the course of the Soft-collection stage remastering, the following tasks were completed by our team:

• Implementation of new tools and processes for Soft-collection.
• Building and launching a mobile application for field collectors.
• Creation and deployment of new strategies for FICO Blaze Advisor.
• Development and implementation of the debt notification system (via Interactive Voice Response (IVR) system).
• Deployment of applications for:
  • planning meetings with Bank’s clients,
  • processing scanned documents,
  • validation of inputting data.

After the new system was launched, the Bank started processing problematic debts significantly faster. The effectiveness of field and office collectors increased greatly due to the automation of manual processes.

Project Outcomes

The Bank started to use the system immediately due to its stability and reliability. After launching the new debt management system, our client noted a significant increase in debt collection efficiency.

The new system launch automated the processing of toxic assets and allowed the Bank to respond to them 32% faster. With every successful iteration, our cooperation with the Bank was taken to the next level of trust. That’s why our team was asked to renew the Hard-collection stage too.