Loan collections costs are spiralling out of control, according to CEB TowerGroup - Now Gartner. Thanks to a variety of factors, including a fourfold increase in delinquencies from 2007 to 2010, the cost of servicing non-performing loans has skyrocketed. It stands at 15 times the cost of servicing a performing loan.
More organizations are turning to loan collections software to control costs. Loan collections software systems use features like process automation, analytics and self-service collections portals to increase efficiencies throughout the credit cycle. However, the loan collections technology vendor landscape is crowded, and vendors offer many features.
Before you begin investigating potential loan collections solutions for your organization, here’s what you need to know about the market.
In 2016, CEB TowerGroup released the first-ever technology analysis of loan collections systems by an industry analyst firm. The report details the features a vendor should offer in a solution. The highest priority technologies to look for, says CEB TowerGroup, are:
These three technologies have the highest strategic importance rating, according to CEB TowerGroup:
“Financial institutions should invest in technologies with a higher strategic importance rating, as these technologies and trends are likely to yield higher ROI and are more market-ready in nature.”
Thanks to the complexity of features out there, it’s critically important to vet the following when considering vendor solutions:
Be sure with any vendor you can check off the following items before you buy:
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