Fast-Growing Eastern European Banking Group:  Collections and Recovery

Old Way

Banks in each country handled their processes differently, with variations in customer acquisition strategies, manual processes and collections procedures, and subjective recovery approaches devised locally.  The banking group had rapidly changing objectives that had to be passed on to local offices manually, with no central management or monitoring of policies.

EDM Way

A decision service handles collection and recovery decisions for banks throughout the group.  This service applies centrally managed business rules as well as local customization that's both integrated and controlled.  The group changes rules as its business changes or new regulations come into force, and these rules are immediately applied consistently across local offices.  The group monitors and improves decision making as it learns what works best.  The service handles all decisions in the collections and recovery process -- asset management and disposal, recovery, early- and late-stage collections, litigation, and local agency management -- and business managers, not IT, control the decisions.  Decisions are based on policy and risk level, not just local judgment calls.

Benefits

• The group now manages and monitors 35 distinct strategies.
  
  
• The system handles a 150 percent increase in early-stage collections.
  
  
• The number of collection agents expected in one country has been cut in half, as shown in Figure 1.
  
  
• Bad debt reserves have been lowered.

Figure 1.  The reduced head count after applying an EDM approach to collections.