As the clouds of crisis cast an ever-growing shadow above economies, banks across the world are seeking to support customers’ financial wellbeing and protect the quality of their loan portfolio. However, their challenge in 2022 could scarcely be more different to the one they faced in 2008.

The Covid crisis triggered a momentous change in regulatory trends, which – coupled with the long-term shift towards customer-centricity and increased competition in the financial services sector – fundamentally changed the status quo of debt collection.

As the effects of lockdowns and subsequent economic shocks disrupted the “business as usual” of the liquidity-rich previous decade, some have anticipated a “perfect storm” of NPLs, while other industry players like Loxon have drawn banks’ attention to the potential for the long-term process of “climate change” in NPL management to approach a tipping point.

In 2022, when the current crisis is again making most households and businesses anxious about the future, financial services are uniquely positioned to create value for their stakeholders through next-generation collection practices. Preventing delinquencies, providing a cure for financial difficulties, and maintaining affordability of loans is not only profitable, but also serves a broader mission: for banks to become major problem solvers, ensuring financial stability.

Banks are transforming to tackle crisis-era collection challenges

Five trends are emerging to shape data-driven debt collections as banks accelerate their technological and business transformation:

1. With digital-first approach and contextual engagement optimized across communication channels, collection is becoming an integrated part of positive banking experience.
2. Advanced analytics and real-time data availability enables lenders to dynamically adapt strategies as customers’ vulnerabilities, risk and behaviour change 
3. Artificial intelligence is being employed to improve understanding of customers, to automate routine tasks, and to help scaling smart decisions.
4. A rapid move towards composability is resulting in increased ecosystem collaboration.
5. Cloud-based models are driving faster innovation, increased business agility, and cost flexibility.

A modern customer-centric debt collection system with composable design is a prerequisite for banks to protect and enrich their lending relationships amid the economic turbulence of our time, and in the uncertain future to come.

Learn more with Loxon about the future of customer-centric debt collection

What are the top trends in the collection industry today? What skills and capabilities will be essential to protect against credit loss? What are the new crisis-era challenges that lenders have to gear up for?

Follow Loxon’s professional content and stay updated about these and other questions. Where to begin? We have already published our first set of knowledge pieces for banking professionals dealing with topics that are likely to spark discussion:

• Delve deeper into the 5 trends that shape the collection industry. Read our 📜 white paper on the subject. Go ahead and look at the 📊 infographics to get a shortened and visually enhanced version: “Five technology trends that are transforming debt collection”.
• Want to know more about what banking professionals think about the “NPL climate change”? Watch this 🎥 webinar, hosted by IBS Intelligence.
• Get more context from our experts. In our recent 🎤 podcast hosted by Robin Amlot from IBS Intelligence, Tamás Erni (Chairman and Head of Sales) and Ádám Kocsis (Head of Professional Services) from Loxon talk about “How lenders can improve the collection experience and manage troubled lending” amid uncertainties.

Stay tuned to new content about the future of collection systems!
Subscribe to our 📰 newsletter to ensure you never miss a beat. The conversation continues soon to explore the following questions:

• How can banks better understand customers’ vulnerabilities and offer tailored solutions?
• What is actionable data? What are the prerequisites of employing AI “anywhere” to solve collection problems?
• How can banks digitise collection workspaces for transforming the hybrid-age productivity curve into a “hockey stick”?
• Does collection mean connection? Will a digital-first and embedded collection experience make customers lives easier “almost invisibly”?

Stay connected, follow us on LinkedIn and Facebook, and feel free to contact Loxon’s specialists if you have questions or comments.And be sure to check out our upcoming blog post. Next time, we will take a close look at the challenges banks are facing in today’s new crisis-era collection environment.