The current methods of collecting debt are inefficient and have a negative impact on the size of the debt book, and subsequently, the cost of recovering the debt.
For collections agents, the process is slow, cumbersome, prone to error or deliberate malfeasance and requiring intimate examination and knowledge of physical documents. They can spend a large volume of time with a customer assessing how much income they have, and what their discretionary and non-discretionary spend looks like.
For the customer, the process while also slow and cumbersome, is potentially embarrassing, as intimate details of their financial lives are pored over.
Open Banking and bank data give a far superior customer journey.
The customer merely has to login to their internet banking, and Open Banking will provide the collections agent with read-only access to the customer’s bank statement information.
With no data asserted by the customer, agents are granted compete and factual view of the customer’s financial situation – with no reliance on customers to provide information which can be exaggerated or potentially untruthful.
This streamlines the whole collections process, creating a journey that is efficient while suitable for vulnerable customers who are likely to be in debt.
DirectID accesses raw bank data directly from digital bank statements, offering accurate income figures calculated specifically for each applicant. Understanding income is the starting point for each recovery agent to make a determination on what the repayment figure should be. It is then crucially important, and forms the basis of a monthly affordability figure, an accurate view on how much a customer can afford to spend on repayment costs.
All the data available is categorised in line with the Standard Financial Statement, the universal income and expenditure statement in the UK, so all debt management services can utilise the tool.
A solutions provider to UK local authorities partnered with DirectID to streamline the collections process for local councils. The current process, built upon paper documentation and phone calls, was neither efficient nor pleasant for any party involved.
By partnering with DirectID, local authorities were able to remove the friction within this process and found that using bank data was infinitely more efficient in assessing a debtor's affordability. As the DirectID Collections & Recoveries solution aligns with the SFS categories, local authorities can continue to assess repayment potential based on the universal income and expenditure statement.
- DirectID Collections & Recoveries
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There are many untapped opportunties for the financial services industry and for individual consumers through bank data, and it is incumbent on us all we make the most of this opportunity.
It’s such a light touch integration. DirectID makes it fast and easy to get up and running.
CEO, Just Us
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