How Open Banking Enables Personalised, Sustainable Debt Collection

1. October 2021 / in Open Banking, Debt Collection

Sustainability is the motto for our times and the path to a successful future. This also applies to collection agencies.

Especially in light of the mounting pressure placed on the industry due to the new fee regulation coming into force on 1st October 2021, it’s crucial that collection agencies take the right steps towards sustainable collection.

Above all, sustainability means customer centricity, debtor friendliness and a strong focus on digitalisation. Have you heard that somewhere before? You’re right, digitalisation and customer centricity are two of the great promises of PSD2 and the whole Open Banking movement that is taking the financial world by storm.

Open Banking can be used to break completely new ground in terms of digital debt collection. This is because Open Banking opens up unimagined opportunities to improve the customer experience and thus also the success potential of the payment claim.

Discover how offering Account Information Services increases repayment rates and digital Payment Initiation Services make it easier for customers to pay. You’ll also learn how Open Banking can help you to reduce the workload on your team and how customer-centric approaches work in the digital age.

1. Enhanced Customer Experience with Tailored Solutions

It pays off to treat existing customers well, even if they have payment difficulties. After all, it’s very costly for companies to acquire new customers. In this respect, companies should rely on collection agencies that adopt a strong customer-centric approach. In the strictest sense of the word, this is what sustainability is all about.

A key element here is the provision of Account Information Services (AIS), which help to assess the debtor’s individual financial situation so that, for example, a tailored installment payment plan can be offered. In other words, highly customised debt collection. Collection agencies can already offer this to their customers today with the help of innovative Open Banking products such as the Collection Check (in the PSD2 environment).

It goes without saying that maximum transparency is also ensured for customers when they activate the account view via their account access. This way, collection agencies act with minimal effort in accordance with PSD2 and appear as a modern, digital company.

XS2A, Banking APIs and PSD2. Here you’ll find everything you need to know about Account Information Services!

How does it work? The debtor is provided with a seamless login process into their online banking system in order to present their financial situation in detail. Using the All-in-One Collection Check, collection agencies can then look at the customer’s current financial situation together with customers and work out an individually tailored solution for paying the outstanding balance.

When processing individual collection cases, it’s crucial that you enter into active discussion with the debtor in order to understand exactly why the debt has not yet been settled. Subsequently, a solution for the settlement of the outstanding debt can be found, taking into account the debtor’s financial situation. This way, you create mutual transparency, which then provides a real opportunity to settle the outstanding debt.

The result: a better overview for the collection provider, satisfied customers and higher chances of settling the invoice.

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2. Innovative Payment Methods Increase the Success Rate

In order to boost success in receivables management, you should not only take the customer’s individual situation into account; it’s also crucial to make the payment process as simple and frictionless as possible. In this context, Payment Initiation Service Providers (PISPs) are assisting collection agencies with new payment methods.

As part of Open Banking, there are digital payment solutions such as the TÜV-certified online bank transfer including PayPerCode, a QR code directly on the first payment reminder. These are extremely convenient for customers: scan, pay, done. Due to the high level of convenience, the conversion rate is very high. The debtor is convinced by the simplicity of the invoice payment, while the creditor is impressed by how quickly they receive the payment.

How does it work? Payment Initiation Service Providers offer innovative payment methods that make payment easier than ever before. Thanks to payment processing without any media disruptions, customers are seamlessly guided through the payment process, ensuring an all-round customer-friendly payment of the receivable amount. To initiate a payment, customers simply need to log in to their online banking system and then authorise the transfer (e.g. using the TAN method). Online transfers are also possible as a white-label solution in the look & feel of the collection agency.

PISPs now offer innovative payment concepts both online and on paper. For example, the PayPerCode is printed on an invoice or reminder letter. Whether on paper or digitally, in both cases customers are redirected to a dedicated landing page provided by the Payment Initiation Service Provider for payment. Here customers can pay the invoice immediately online.

The result: a seamless payment experience with a high level of customer acceptance.

3. Open Banking Shortens Internal Work Processes

New payment methods make it easier to process receivables as part of the account reconciliation process for debtor payments received by bank transfer. The rate of unattributable payments is significantly lower, which helps to eliminate inquiries, adjustments and reminders for your accounting department. Payments can be processed in batches for bulk collection, or as a single payment order if the debtor is in inbound or outbound communication with the collections officer. This way, a payment can be ordered directly from the conversation.

By the way, Account Information Service Providers also save collection agencies unnecessary work. With the All-in-One Collection Check, you can estimate the success potential of a renewed reminder and even predict the optimal time for sending a payment reminder. More specifically, the All-in-One Collection Check provides segmentation support at several stages of collection processing, such as whether it makes sense to conduct an out-of-court or judicial collection procedure.

How does it work? With the OnlineÜberweisen mobile payment solution including PayPerCode, customers are directed to a predefined payment page. Since the payment order is already pre-filled and assigned to the file number as a unique identifier, you can bid farewell to errors caused by manual typing or copying of IBAN and the reason for payment.

FinTecSystems also offers collection agencies an easy onboarding process for new payment methods. The payment method enables payment in the look & feel of the collection agency. From a technical perspective, the entire payment process is hosted and managed by FinTecSystems. This means that you receive a complete service for payment processes, relieving you and your team of any administrative effort in this respect.

The result: digital collection is less error-prone and benefits from new payment options without any in-house development work.

These three steps will help collection agencies achieve greater sustainability. Ensuring customer centricity, digitalisation and efficiency today will determine who runs ahead of the competition tomorrow.


Schlagworte: Open Banking, Debt Collection

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