How Rezo’s Collection Product is Improving the Collection Efficiency
May 2, 2023
Debt collection is a critical process for businesses and financial institutions worldwide. However, traditional debt collection methods are often ineffective and time-consuming, resulting in low collection rates. This is where Rezo’s AI-driven debt collection product comes in, offering a more efficient solution for early delinquent customers.
By leveraging advanced algorithms and machine learning models, the collection product can analyze customer behavior patterns, predict default risks, and identify the most effective collection strategies. By using it, financial institutions can minimize the risk of non-payment and improve their chances of recovering the full loan amount.
Customer segmentation is the process of dividing customers into groups based on similar characteristics, behavior, or needs. By segmenting customers based on delinquency level, the collection product prioritizes the efforts and allocates resources more efficiently. For example, customers who are only a few days behind on their payments may require a different approach than those who are several months behind.
How does the Collection Product Improve Collection Efficiency?
Collection Product aims to help and assist NBFCs in debt recovery. The collection product is used for timely EMI and penalty collection. The motive behind the product is to avoid defaulters; if there are some, it categorizes them based on DPD (days past due) and data collected. The product then suggests different loan recovery strategies for different buckets.
- Data consolidation- Rezo combines the information gathered from lenders regarding their past-due accounts and debtors into a structured and usable manner using artificial intelligence (AI) and a product dashboard. This helps in the consolidation of the data of the customers.
- Segmentation – The technology of Collection Product divides customers based on product, geography, and days past the due date into different buckets, ranging from early delinquents to NPAs (Non-performing assets). This segmentation can help debt recovery teams identify patterns and trends in customer behaviour that can decide their overall debt recovery strategy.
- Data Analysis: The collection product analyses borrower behavior and payment histories to identify which borrowers are most likely to fail on their loans. This assists lenders in spotting possible delinquencies early on and taking the necessary steps to stop them from becoming defaulters. It also provides a real-time framework for monitoring campaigns and payment schedules. The Collection Product uses machine learning algorithms to produce in-depth reports and analyses with all this data.
- Smart Connection: Segmentation and data is followed by an intelligent contact strategy. Rezo uses AI-driven chatbots and voicebots to engage with borrowers, remind them when their payments are due, or provide information on available repayment choices. This enhances borrower participation and raises the probability of timely payments. The collection product calls at the appropriate time and frequency and collects the debtor’s overdue payment through a customised link. Moreover, it handles call routing to the appropriate agents and updates the data on the unified dashboard.
How are we Improving Collection Efficiency for Initial Buckets?
Rezo divides the debtors based on DPDs and suggests a unique action plan for a personalized and actional approach. A customer who has not paid the debt within seven days from the due date falls into the early delinquent category and will be given gentle reminders, mainly through chat or text.
On the other hand, Debtors whose due date has passed two months back need to be put in a different bucket and dealt with different strategies. Organizations must do more than merely message them to collect debts from such people.
The following table shows the detailed categorization and suitable action plan for each category based on the days past the due date.
Benefits of Collection Product
The collection procedure is now more effective and covert thanks to Rezo’s collection product, which has spared NBFCs from laborious manual handling. The collection product increase the recovery rates, save expenses, and communicate with consumers who have defaulted on their obligations more effectively by segmenting clients and adjusting their techniques accordingly.
- Improved recovery rates: The collection Product automates many of the repetitive tasks in the debt collection process. Using data-driven insights and predictive analytics, AI-driven debt collection software can help NBFCs optimise their collection strategies and increase their chances of recovering outstanding debts. This can result in higher recovery rates and more efficient use of resources.
- More targeted communication: Different customers respond better to different communication methods. By segmenting customers based on delinquency level, debt recovery teams can tailor their communication tactics to each group’s preferences and needs, which can lead to more effective communication and better outcomes.
- Increased accuracy: AI algorithms can analyse large amounts of data and identify patterns and trends humans may miss. This can help organisations identify the most effective collection strategies and target their efforts on the debts most likely to be paid.
- Better customer experience: AI-driven debt collection software can use natural language processing to communicate with debtors more personally and empathetically. This can help reduce people’s negative associations with debt collection agencies and improve the overall customer experience.
In conclusion, Rezo’s AI-driven debt collection product offers a more efficient and effective solution to the traditional debt collection process. The product leverages advanced algorithms and machine learning models to segment customers based on delinquency level, predict default risks, and identify the most effective collection strategies. By automating many of the repetitive tasks in the debt collection process and providing more targeted and personalised communication, the collection product can increase recovery rates, save expenses, and improve the overall customer experience.
With its ability to analyse large amounts of data and identify patterns and trends, the product can help financial institutions optimise their collection strategies and minimise the risk of non-payment. Overall, Rezo’s Collection Product is a valuable tool for businesses and financial institutions worldwide that are looking to improve their collection efficiency and increase their chances of recovering outstanding debts.
Request a Demo Today- Contact Us