With customer centricism becoming the new normal in the Indian financial services industry, financial companies across the country are investing in new technologies to improve their operations and service delivery. Field Debt Collection, a critical part of their business practice, heavily relies on paperwork until now. However, by investing in strategic technologies, firms can boost their debt collection activities, believe industry leaders.
Religare Finvest Limited (RFL) a subsidiary of Religare Enterprises Limited (REL), a small and medium enterprise (SME) financing focused NBFC, was managing its debt management and collections through an in-house system and was faced with some unique challenges. With a presence in 25 branches across all major cities, the INR 120.9 billion (as of December 31st 2014) financial services provider, was also looking to invest in technologies that can offer them a competitive advantage.
Challenges in debt collection
Over time, the company noticed a major delay in its debt collection. With teams working out of various geographies, paper trail tracking came up as an issue that, in turn, made data validation a major hurdle. In the past, collating validation ﬁelds such as PAN card number, instrument/reference number, data types validation and others was a diﬃcult task. There were even instances where reconciliation issues rose when a single cheque from a customer with multiple loans was submitted.
Consequently, the company faced operational ineﬃciency due to the manual and paper based collection system. Receipt books based on manual inputs resulted in errors like wrong agreement number, ineligible data, carbon copy impression quality, etc. There was a perpetual risk of loss of manual receipts books which are controlled ﬁnancial documents. The impact of such a loss resulted in operational hassles.
To aid this process, RFL has a call center team which supports the recoveries function. There is, also, a large ﬁeld collection team, comprising of ﬁeld or sales personnel and collection managers, which is spread across more than 50 locations.
An automated user-friendly solution
However, the financial firm was looking for an automated and user-friendly approach to improve customer satisfaction. Religare Finvest needed a technology partner who would ensure a smooth and eﬃcient collections operation. As Kavi Arora, Chief Executive Officer, Religare Finvest Limited said, “Religare Finvest Limited is committed to making financing easier for SMEs through innovative, pioneering and industry-leading solutions.”
It was then that the financial company approached Noida-based Nucleus Software Limited to empower its critical business process. The IT firm – based on an analysis – recommended a mobility based solution.
Nucleus Software’s FinnOne mCollect, one of the leading mobility collections solutions, oﬀers several key features that has been designed to integrate with any base system. The application is compatible on Android, Blackberry, Symbian and Windows platform and capable of working on devices like mobiles and tablets.
Ravi Pratap Singh, President & Head, Global Product Management at Nucleus Software explained, “Our partnership with Religare Finvest goes back to 2009, when Nucleus Software’s Lending solutions were implemented for its Retail loan operations.” The implementation of the FinnOne mCollect solution was logically another step up in strengthening our partnership.”
The solution is targeted at field collectors, collection agencies and bank oﬃcials and was considered the right fit for Religare Finvest. The Mobile application interacts with Base Central collection system on a ‘Real- Time’ basis using GPRS/ Wi-Fi and is also capable of running oﬄine application processes.
Sharad Agarwal, EVP & Head of Operations and IT, Religare Finvest Ltd, said that the new mobile solution was cost eﬀective, easy to use and has been implemented in a quick time frame which has resulted in enhanced customer experience.
For example, over the last 6 months, mCollect has seen over 90% penetration across the RFL’s ﬁeld collectors team with a collection of over 25,000 payments. In monetary terms, the per-receipt cost came down to 30% of prior expenses. This product has enabled a virtually paperless operation therefore eliminating the need for managing receipt books. RFL noticed it could minimize human errors as the captured information is editable. The correct, instantaneous receipts could ensure accurate status of customer outstanding, transaction records and streamline collection operations.
Users now have access to an instant MIS to track the cash collected and follow up schedule. Chances of collection have increased signiﬁcantly as queries raised by customers can be addressed instantly in contrast to earlier situations where such unresolved queries were leading to non-collection till the queries get resolved.
An 85% reduction in Float money was also observed by RFL. By increasing control on ﬂoat money, the risks involved have reduced dramatically. Finally, there was a marked increase in the level of customer satisfaction. “With all customer queries solved at their doorsteps, this solution ensures higher customer satisfaction,” said the IT team at Religare.
With services such as instant SMS and personalized e-mail, customers have become not only more inquisitive to know the latest information on their loans, many of them also do not hesitate to pay in cash. “Streamlined operations, hassle free collections and easy to use technology solutions have greatly empowered the RFL collection team,” concludes the Religare IT team.
Investments in financial technology in the Asia-Pacific region have grown fourfold in the first nine months of 2015 compared to the entire 2014, according to a report by the global consultancy firm Accenture released in November 2015. Payments technology accounted for 40 percent of the total, while 25 percent were dedicated to lending.
“Today, financial services companies are waking up to the vast opportunities created by the current wave of fintech,” says Jon Allaway, senior managing director of Accenture’s Financial Services group in ASEAN and executive sponsor of the FinTech Innovation Lab Asia-Pacific.
“Financial services institutions are embracing cloud, mobile and blockchain to fundamentally redefine their business and operational models. We are seeing this in the increased investments from banks in fintech venture capital funding, incubators and startups,” he summed up.