$2.5 billion in 2019
$5.6 billion by 2026
Category Intelligence on Debt Collection Software covers the following
Global debt collections software market size is valued at approximately $2.5 billion in 2019 and is expected to reach $5.6 billion by 2026. It is forecasted to grow at a CAGR of nearly 9.4 percent over the period 2019–2026. The year-over-year growth rate for 2020 is estimated at 1.88 percent.
Debt collection is impacted by consumer behavior, macroeconomic factors, regulatory changes and protections on a day-to-day basis. Financial institutions seeking to improve collections need to design a sustainable and profitable debt collections strategy. Process improvements, such as workflow automation, customer management, consistent collections treatment, and collector experience plays an integral role in debt management.
Automating collections: Many financial institutions struggle with changing debt landscapes and are trying to cope with such situations through outdated technology. With fewer resources, growing debt volume and consumer protections, legacy system is inefficient and detrimental. Debtors are now living in an omnichannel and self-service environment; financial institutions that upgrade to new technology witness a host of benefits leading to a profitable lending business. Broadly debt management solution enables bank to minimize bad debt, rehabilitate customers, reduce attrition, and maintain revenue streams. Government agencies are using debt management solution for collecting tax debt, though the revenue size is small, complexities and inherent data integration challenges that government agencies face is similar to a bank’s infrastructure
Shift to customer-centric collections: Financial institutions have the habit of servicing customers’ account and not their customers. A customer-centric approach enables banks to design processes and system (i.e., collection automation) with a key focus on improving customer experience and loyalty.
Analytics for better account treatment: Analytics helps bank in building robust collections- scoring models and precise debt collection strategies. Collections solution providers offer analytics module as part of their end-to-end solution or as a bolt-on solution. Depending upon the quantity and quality of data, collections specific-scoring, models, and decisioning can be built. While behavioral scores can predict a longer-term trend, advanced analytics (based on sophisticated algorithms) help managers predict the short-term trends: likelihood an account will be become more delinquent, likelihood of self-cure, probability of payment in the coming month and the amount.
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