With the pandemic, the banks are walking on a double-edged sword. On the one hand they are flooded with loan enquiries, and on the other hand they are facing the challenge of timely recoveries of existing loans. Individuals have lost jobs and taken pay cuts to cope with the financial pressures brought about by the pandemic. The moratorium period provided by the RBI has ended and pressures are building on every individual to recommence EMI repayments. Banks are also under tremendous pressure to recover outstanding payments in order to maintain their liquidity. The last round that were declared as bad debts gave large corporates an unhindered access to bank funds. However, the real crisis is just hitting home, and the retail borrowers are at the receiving end.
Where are the banks headed?
As per S&P Global Ratings reports, bad loans for the banking sector are expected to go as high as 10-11% of the total loans by 31 March, 2022 from 8% on 30 June, 2020. This, however, does not distinguish between retail and corporate loans.
Clear and transparent communication with customers at this point is of prime importance for every stakeholder at the bank including credit managers, risk managers, and collection managers. Defaulting customers do not wish to receive harsh communications from the bank to add to their worries. The banks, however, are left with no option.
Using the right message, at the right time, through the right medium is what will connect the banks with the defaulting customers. This challenging task cannot be left solely to the collection agents. An intelligent data analysis, both with the data from the bank’s core systems as well an ancillary data from supplementary systems, can help set up the base for sensitive and personalized communication generation. It is time to act SMART to trigger personalized communications using omni-channel, AI empowered communication technologies.
Time to get smart
A Customer Communications Management System (CCMS) with capabilities of addressing the demographic and geographic needs viz. language, content & intensity would be required to compile and address the problem at hand. Banks right now require enhanced EMI recovery communications with built-in capability to address:
- Multilingual requirements of the diverse spread across the country with capability to manage branding & ethical sentiments
- Tonality of the communication in being persuasive, corrective and, if the need arises, being licit
- Multiple channels of interfacing with the customer – physical, email, SMS or even social media & WhatsApp
- Big data-driven cluster predictive analytics or a nested loop, based on outcomes or responses of earlier communications
- Archival and retrieval as also maintain documents to facilitate litigation
Seshaasai, with its robust services, offers IntARcM – a modular approach to address the entire accounts receivable communications for banks. Right from addressing and making sense of the raw data from the core systems and ad hoc systems to creating templates in order to address the multitude of customer profiles to generation of the communication across multiple mediums – print, email, SMS or WhatsApp. It also offers the services of tracking the communication till it reaches the customer via API-based linkages with multiple courier systems. Physical deliveries can be tracked right up to the customers’ doorstep and RTO’s can be managed effectively. All communications – physical and electronic – can be tagged and stored in a repository for retrieval at a later date when the need arises. Extracting relevant reports for management and operational purposes is another key feature of IntARcM.
Making a difference
The key to maintaining continuity with a customer is through effective communication, and Seshaasai – with IntARcM – helps you during these trying times with an innovative solution. In the words of one of our customers, “Our collection efficiencies improved by 12% within 3 months of adopting the IntARcM solution proposed by Seshaasai. We are now making sense of our data and organizing it such that we have a better mechanism in place to effectively and smartly communicate with our customers.”
Bosco Mascarenhas is Head-Business Development at Seshaasai.
This story originally appeared on LinkedIn.