Debt collection Services
Report on top debt collection & debt purchase suppliers across several regions -APAC, US, UK, Africa
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Debt collection Services Industry Benchmarks
The average annual savings achieved in Debt collection Services category is 6.20%
The industry average payment terms in Debt collection Services category for the current quarter is 63.8 days
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Category Strategy and Flexibility
Price per Unit Competitiveness
Minimum Order Quality
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Debt collection Services market frequently asked questions
As per Beroe's analysis, global debt collection industry outlook is a combination of the following pointers: -- The outsourcing of debt collection to third-party agencies is higher in North America and the APAC region -- Rising household debt in Canada that surpassed the country's GDP a while back is expected to drive the third-party debt collection industry in North America -- APAC region banks have a higher tendency to outsource international debt collection activities
Two primary constraints of the debt collection industry are: -- Increasing labor costs ' Debt collection is a labor-intensive process & salaries comprise nearly 30 ' 40% of the total cost. So, any increase in the labor cost will affect the profit margins -- Stringent regulations ' The governments are planning to impose strict debt collection industry regulation policies on the debt collection industry especially for matured regions like North America and Europe which are already bound by directives & acts like FDCPA, TCPA, and CCD.
According to Beroe's report, increasing complexity of the regulatory environment across North America and Europe poses a big threat to the debt collection industry growth.
According to the report, the highest market size is captured by North America at a valuation of $17.05 Bn followed by Europe at $7.58 Bn, and the Asia Pacific at the lowest valuation of $3.3 Bn.
As per Beroe's analysis report, the following are the leading debt collection industry trends: -- There's a considerable increase in the tendency to outsource the in-house process of debt collection especially in the North American companies -- Final demand letter (an additional service for the debt collection industry) has seen a higher adoption rate among the mid-sized companies Invoicing (Transaction) verification (for checking the accuracy of debts) is expected to be lower in North America due to the higher internal efficiency of the creditors.
Debt collection Services market report transcript
Global Consumer Debt collection Services Industry Outlook
Outsourcing of debt collection to third-party agencies is higher in North America and APAC
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
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
Credit issuing companies have attempted to manage cash flow and costs by outsourcing debt collection services at higher rates. This trend has resulted in increased opportunities for industry operators
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 10-12 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
- Better offerings of technology by the Debt Collector Agencies (DCA) such as skip tracing, text messaging, analytics, etc.
Low Interest Rates
- Record low interest rates in countries around the globe have made it easier and more attractive for corporates, individuals and governments to borrow and incur more debt
Increasing labor and technology costs
- Debt collection is a labor-intensive process and salaries comprise 30–40 percent of the total costs. But the advent of technology can not offset the costs incurred as subscription to software and other services are just as expensive as hiring extra FTEs. The increasing labor rates, especially in the developed countries, is expected to affect the profit margins
- 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
Supply Trends and Insights : Debt collection Services
- Agencies are looking at strategic collaboration and M&As for growth and larger players are increasingly looking for attractive acquisition partners, who would contribute to profits, expansions, and technological changes to their agencies. The major acquisitions are Experian Group acquiring the digital identity resolution service provider, Tapad, to improve their fraud and identity management services and Atradius expanding their global presence in Europe by acquiring a Portuguese collection agency, Gestifatura. This brings up the presence of Atradius in 34 countries around the globe.
Analytics and Advanced Underwriting Services
Agencies are using advanced underwriting tools to track the client customer’s repayment history and patterns, their credit scores and risks, and assets under their name to come to a more informed decision after buying portfolios from banks and other financial institutions. This will help the agencies to prioritize and focus on the sure return of investments (people who can repay the debts) and send the high-risk cases over to legal as soon as possible to speed up the collection process and increase the steady cash flow within the company.
Investment in Debt Collection Software: The remote working nature due to the pandemic has made several agencies invest in Debt Collection SaaS providers (both clod and open-API) to facilitate their FTEs to work from their homes and ensure maximum returns during these troubled times.
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