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Auto Finance - Transforming the Collection Process

Traditionally, auto-finance (or for that matter, any!) organizations start with multiple function specific applications recommended by the technology and business stakeholders who are influenced by current fads and trends, budget, sales pitch, relations etc. With ever changing technology landscape, changes in business processes and new decision makers coming, over the time, multiple systems make their way into the IT Landscape of the company leading to below challenges:


  • Multiple system usage for Collection Process

  • Manual processes impacting the user efficiency and productivity

  • Higher turnaround time towards collection of dues and

  • In-ability to handle large volumes

  • Issues with reconciliation of data across different stages of processes

  • Having consolidated information for reporting and analytics becomes difficult impacting assessment of business process efficiency

  •  Comprehensive information not available with services representatives leading to high response time


 


Any auto-finance organization ought to have a robust solution to support the Collection processes. Agnostic of technology, the system supporting the Collection Process ought to provide:


  • Capability For Agents To Contact Customers To Execute Collection Activities

  • Tracking The Outcome

  • Viewing Work Summary And Account Information

  • Manage Customer Preferences

  • Record Account Conditions Pertaining To Legal Proceedings

  • Skip Trace

  • Repossession And

  • Manage Documentation And Correspondence Related To Account

  • Adherence to government (statutory and state specific) rules and regulations



A verticalized solution offering provides the technology backbone to address the single integrated view problem and is customized for specific business scenarios.


 


 

Irrespective of the underlying technology like Microsoft Dynamics, Salesforce etc., the basic architecture of Collection Process system is as bellows:

 


Efficiency and effectiveness of Collection processes in Auto-captive Finance directly impacts the bottom line of the organization. Identification of delinquent accounts at an early stage and handling them using appropriate collection activity can avoid charging off of the loan at a later stage. Proper automated processes can enable:


  • Improved penetration into workable collection account population in alignment with the strategic vision

  • Single system for assigning and working on accounts & monitoring the progress / updates from External systems / agencies

  • Increased Agent efficiency due to process enhancements and availability of additional information

  • Higher customer satisfaction due to better First Call Resolution supported by additional data availability

  • Less Manual errors due to process automation

     

    Case Study

  • A large auto captive financial services company based out of North America proposed to redesign the collection processes to leverage maximum output using CRM application. The existing CRM application being used by Collections department was conceptualized and designed in last decade and since then; there has been a huge growth in the portfolio and change in the market dynamics. In order to address these changes, redesign of the Collection processes and application was pursued. The platform has resulted into annual benefits in tune of USD 1.1 million with following benefits:


  • Improved penetration into workable collection accounts population leading to increased collection rate by 2%-5%

  • Single system for assigning and working on accounts & monitoring the progress / updates from External systems / agencies

  • Repossession vendor integration: Annual Opex savings estimated to be $230K

  • Reduction in callable volume, leading to lower agent hours and headcount

  • Decrease in outsourcing skip agency fees

  • Availability of consistent transaction history information across systems 

  • Siebel data used by Dialer resulting into more effective collection calls



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