A new approach to collection management with an increase in late payments

Press Release

Madrid, 18th Nov 2020

With late payments predicted to reach 15% as a result of the pandemic, according to the Bank of Spain’s annual report, there is an urgent need for banking organisations to implement new collection management strategies.
The tools offered by GDS are a good investment for organisations seeking to manage credit risk and late payments in a comprehensive, customised and effective manner.
The term ‘collection management’ refers to the recovery of fees owed by customers due to their credit obligations. The Bank of Spain has warned that, in this current period of economic uncertainty, both in homes and businesses, the number of bad debts and non-payments could multiply. The outlook is not promising. The rate of late payments is currently around 7% and is predicted to rise to 15% by the end of the year (the worst rate since records began), much higher than the 4.8% seen in 2019. This is a devastating figure that could cause serious problems for the financial system, and banking organisations will have to do all they can to minimise the impact on their bottom line.
Collection management strategies are often complicated and ineffective due to inadequate use of communication channels, poor process optimisation and the lack of a comprehensive view of interactions with the customer. In fact, due to the inability to reduce late payments, for many businesses, they simply become accepted as another operating cost. To address this, GDS Modellica offers customisable tools and intelligent strategies that provide complete solutions and improve existing applications to comprehensively manage and reduce risk through behaviour pattern analysis. Their services make it possible for any organisation to optimise and automate their credit risk management strategies and policies.
Financial organisations can simply not afford to accept the late recovery or non-recovery of non-payments, and in the current economic situation caused by the pandemic, businesses are driving structural changes to address this. These include the incorporation of automation, prediction, advanced analytics and artificial intelligence into their management tools with the aim of increasing customer loyalty but also optimising collection management to predict and reduce risky behaviours. This way, banks can more effectively and precisely prevent late payments.
When awarding credit to customers and businesses, it is key for banking organisations to use predictive analytical strategies with personalised, up-to-date information. This way, they will be able to provide loans without compromising their viability and keep risk within controlled parameters that make it possible to establish early warnings and detect possible non-payment situations before they arise. In the words of the managing director of GDS Modellica, “it is important to put in place robust liquidity and lending mechanisms, as well as enhance credit risk management processes, review business continuity plans and manage processes in a comprehensive, joined-up manner”.
The banking industry needs to make a significant investment in incorporating AI technology, Machine Learning and other software in different areas in order to acquire valuable information that can later be used to improve customer service, business relations, after-sales services, the user experience and credit risk management in general. For example, the GDS MODELLICA Behavior Engine (MBE) evaluates the borrower’s credit situation based on previous behaviour and predictions made using all available information about that person or SME. The system then periodically identifies the total line of credit that will be extended to an account or borrower and enables the management of limits and lines for each product. It is also capable of accurately identifying the most valuable customers or those with the potential to become important customers.
Automating credit processes and operations is key since it allows organisations to analyse potential scenarios using accurate, real-time data and evaluate credit risk before awarding a loan. Such new collection management techniques are optimised, agile, fast and customisable and allow the process to be monitored more comprehensively. Investing in the right management strategies is the most effective way to reduce late payments, improve the recovery of non-payments and ultimately, reduce costs.

Latest Articles

Work with Us

Want to click less and know more?

Download GDS Modellica company overview
Icons made by geotatah from www.flaticon.com
Icons made by Freepik from www.flaticon.com
Icons made by Icongeek26 from www.flaticon.com
Icons made by monkik from www.flaticon.com
Icons made by monkik from www.flaticon.com
Icons made by Freepik from www.flaticon.com
Icons made by Kiranshastry from www.flaticon.com
Icons made by srip from www.flaticon.com
Icons made by Smashicons from www.flaticon.com
---------------------------------------------------- Vector de Diseño creado por fullvector - www.freepik.es Vector de Venta creado por macrovector - www.freepik.es Vector de Tecnología creado por macrovector - www.freepik.es Vector de Negocios creado por stories - www.freepik.es Vector de Tecnología creado por upklyak - www.freepik.es Foto de Negocios creado por Waewkidja - www.freepik.es Foto de Negocios creado por freepik - www.freepik.es Foto de Icono creado por freepik - www.freepik.es Foto de Negocios creado por freepik - www.freepik.es Vector de Personas creado por rawpixel.com - www.freepik.es Vector de Tecnología creado por upklyak - www.freepik.es Vector de Fondo creado por iconicbestiary - www.freepik.es Vector de Negocios creado por freepik - www.freepik.es Vector de Escuela creado por upklyak - www.freepik.es Vector de Escuela creado por upklyak - www.freepik.es Vector de Fondo creado por freepik - www.freepik.es Vector de Fondo creado por pikisuperstar - www.freepik.es Vector de Banner creado por fullvector - www.freepik.es Icons made by srip from www.flaticon.com Vector de Diseño creado por fullvector - www.freepik.es Vector de Banner creado por fullvector - www.freepik.es Vector de Tarjeta de visita creado por fullvector - www.freepik.es Vector de Tarjeta de visita creado por fullvector - www.freepik.es Vector de Banner creado por fullvector - www.freepik.es Vector de Infografía creado por katemangostar - www.freepik.es Vector de Logo creado por katemangostar - www.freepik.es Vector de Fondo creado por freepik - www.freepik.es Vector de Negocios creado por fullvector - www.freepik.es Vector de Negocios creado por freepik - www.freepik.es Vector de Ciencia creado por macrovector - www.freepik.es Vector de Negocios creado por pikisuperstar - www.freepik.es Vector de Infografía creado por fullvector - www.freepik.es Vector de Mercadeo creado por slidesgo - www.freepik.es Foto de Negocios creado por jannoon028 - www.freepik.es Foto de Fondo creado por freepik - www.freepik.es Vector de Flecha creado por macrovector - www.freepik.es iconixar from www.flaticon.com Icons made by Nhor Phai from www.flaticon.com Icons made by surang from www.flaticon.com Icons made by dDara from www.flaticon.com Icons made by mynamepong from www.flaticon.com Vector de Diseño creado por freepik - www.freepik.es Vector de Diseño creado por freepik - www.freepik.es Vector de Ilustración creado por stories - www.freepik.es Vector de Ilustración creado por stories - www.freepik.es Vector de Fondo creado por pikisuperstar - www.freepik.es Vector de Tecnología creado por upklyak - www.freepik.es Vector de Fondo creado por pikisuperstar - www.freepik.es Vector de Tecnología creado por upklyak - www.freepik.es Vector de Tecnología creado por stories - www.freepik.es/***********/ Vector de Infografía creado por fullvector - www.freepik.es Vector de Infografía creado por fullvector - www.freepik.es Vector de Fondo creado por rawpixel.com - www.freepik.es Vector de Negocios creado por pikisuperstar - www.freepik.es Vector de Negocios creado por freepik - www.freepik.es Foto de Tecnología creado por master1305 - www.freepik.es Iconos landing Icons made by srip from www.flaticon.com Icons made by Eucalyp from www.flaticon.com Icons made by Eucalyp from www.flaticon.com Icons made by Freepik from www.flaticon.com Icons made by dmitri13 from www.flaticon.com Icons made by Wichai.wi from www.flaticon.com Icons made by Eucalyp from www.flaticon.com Icons made by prettycons from www.flaticon.com Icons made by Smashicons from www.flaticon.com Vector de Fondo creado por pikisuperstar - www.freepik.es Vector de Tecnología creado por freepik - www.freepik.es Foto de Negocios creado por jannoon028 - www.freepik.es Vector de Tecnología creado por pch.vector - www.freepik.es Vector de Negocios creado por freepik - www.freepik.es Vector de Negocios creado por gstudioimagen - www.freepik.es Business card vector created by fullvector - www.freepik.com Card vector created by upklyak - www.freepik.com Business vector created by fullvector - www.freepik.com ----------------------------------------------------- Iconos sociales twitter negro
Icons made by Freepik from www.flaticon.com
linkedin
Icons made by Freepik from www.flaticon.com
youtube
Icons made by Freepik from www.flaticon.com
------------------------------------------------------ Vector de Dinero creado por vectorjuice - www.freepik.es Vector de Tecnología creado por macrovector - www.freepik.es
Icons made by Freepik from www.flaticon.com
Vector de Tecnología creado por stories - www.freepik.es
Icons made by Wichai.wi from www.flaticon.com
Foto de Negocios creado por onlyyouqj - www.freepik.es
Icons made by Smashicons from www.flaticon.com
Icons made by Eucalyp from www.flaticon.com
Icons made by prettycons from www.flaticon.com
Icons made by Smashicons from www.flaticon.com
Icons made by Freepik from www.flaticon.com
Vector de Infografía creado por upklyak - www.freepik.es Vector de Dibujos animados creado por vectorjuice - www.freepik.es