For decades, the collections and recoveries functions have delivered exactly the outcome they’ve been set out to do: collect and recover bad debts and protect shareholders from financial loss. Most banks have adjusted to cope with the increased expectations that now come with managing customers who are experiencing financial hardship. But, as the last 18 months have clearly shown, this is no longer enough.
While the vocabulary around this critical and strategic banking capability has changed – from ‘collections’ to ‘assistance’, ‘recoveries’ to ‘solutions’, and ‘hardship’ to ‘supporting many forms of vulnerability’ – it’s simply not enough. The mission, people, processes and technology within the collections and recovery functions all need to evolve and scale to be fit for the future.
To make this a reality, there are key questions executives should be asking when it comes to their collections and recoveries functions:
The collections and recoveries functions are likely to continue increasing in importance. By ensuring this capability is geared to the future, banks can better meet their own needs – and their customer’s expectations too.
This article is an edited extract from Deloitte’s commentary on the FY20 results of Australia’s major banks.