Global Consumer Debt Collection Industry Outlook

  • Outsourcing of debt collection to third-party agencies is higher in North America and APAC 
  • Rising household debt in Canada, which surpassed the country’s GDP, in 2016, is expected to drive the third-party debt collection industry in North America 
  • APAC banks have a higher tendency to outsource the international debt collection activities 
  • Increasing complexity of the regulatory environment across North America and Europe is acting as a threat to the growth of the debt collection industry


Global Debt Collection Market Maturity

  • Outsourcing tendency of debt collection to third–party agencies is witnessed more in North America and APAC as compared to Europe 
  • Improvement in recovery rates by 10–12 percent has been witnessed by outsourcing of debt collection 
  • Cost and time for legal proceedings in Latin America is much higher than in other regions, thereby increasing the complexity of debt collection

Debt Collection Industry Trends

  • Increase in the tendency to outsource in-house process of debt collection has been witnessed, especially among the North American companies 
  • Higher adoption of the final demand letter, an additional service for the debt collection industry, has been seen mostly among mid-sized companies 
  • Invoice or transaction verification, the process for checking the accuracy of the debts, is expected to be lower in North America, due to the higher internal efficiency of the creditors

Debt Collection Drivers and Constraints


Better recovery rate

  • Creditors, incurring huge losses due to increase in delinquent debts, have experienced an improved recovery rate of 15 –20 percent, by outsourcing debt collections

Better utilization of time and resources

  • Debt collection is an extremely complex and slow process, especially for smaller banks
  • By outsourcing this process, banks have realized better cost savings, as well as resources which can be utilized for their core functions 

Technological advantage

  • Better offerings of technology by the Debt Collector Agencies (DCA) such as skip tracing, text messaging, analytics, etc., has helped creditors to communicate with the debtors, thereby improving the collection rate


Increasing labor costs

  • Debt collection is a labor intensive process and salaries comprise 30 – 40 percent of the total costs. Thus, the increasing labor rates, especially in the developed countries, is expected to affect the profit margins

Stringent regulations

  • Governments are expected to impose stricter regulations on the debt collection industry, especially in matured regions like North America and Europe, which are already bound by directives and acts like FDCPA, TCPA, CCD