Financial institutions looking to recoup delinquent accounts while maintaining a positive association with their brands have a powerful new tool: Oracle Banking Collections.
The cloud-enabled solution announced today provides lenders a more comprehensive look at debtors’ total financial pictures and features so they can more easily repay their loans.
While credit card and mortgage delinquencies are currently stable, there is a significant rise in student and auto loan defaults. In fact, Fitch Ratings stated that the 60-plus day delinquency rate for subprime car loans climbed to 5.16% in February of this year, the highest level in nearly two decades. The collections process is complex, inefficient riddled with fraudulent activity.
IDC Consumer Banking research director Marc DeCastro said: "With today’s choices and technology available, consumers demand solutions that put them at the center and in control of their options.
"It is a unique situation to apply a customer first mindset when it comes to handling delinquent accounts, but if done correctly, the benefits of such an offering should help to lead to improved contract rates and be a real help to delinquent borrowers."
Oracle Financial Services Banking Products senior vice president Chet Kamat said: "The Federal Reserve reported that as of March 31, 2016, total household debt in North America alone was $12.25 trillion. Oracle Banking Collections provides financial institutions a single system for comprehensive collection activity across all products related to a delinquent account.
"The collections process is designed for the digital world with efficient workflows, improved decision making and intuitive customer centric capabilities that empower the consumer with self-service remediation.
"Financial Institutions can choose to deploy the solution on the Oracle Cloud or on premise."
Each year financial institutions waste millions of dollars attempting to solve their debt collection problem with the age-old tactic of throwing 3rd party debt collection agents who may use decades-old technology riddled with inaccurate borrower data, at the problem.
The actions by collection agents, who know nothing about the customer or customer’s relation with the financial institution, can border on harassment with phone calls at all hours, dunning letters and the threat of lawsuits.
The new Oracle Banking Collections offering is helping financial institutions and their collections agencies improve collections on delinquent accounts by offering three unique and powerful capabilities:
1. Detailed insights into a borrower’s entire relationship with the financial institution, enabling collections agents to know more about who they are communicating with and how best to have a meaningful conversation about remediating the account.
2. A single system of record for all collections activity, helping to support compliance with strict collections regulations including those set forth by the Consumer Financial Protection Bureau.
3. Unique self-help features that enable the consumer to proactively determine a remediation plan for their account and avoid the collections process altogether.