Survey identifies delinquency trends and opportunity for improved customer experience management for customers in arrears.
Johannesburg, 18 September 2013 – A recent survey completed by senior managers at South African financial services and retail companies highlights the need for a new and innovative response to the rocketing numbers of indebted consumers.
Current economic conditions combined with increasingly indebted customers mean that financial services and utility companies are expecting their consumer debt write-off levels to increase significantly over the next year, a situation which, left unaddressed, will directly affect their bottom line. The survey highlighted the need for companies to make changes to adapt to their customers’ changing profiles and increasing use of the internet.
The survey was completed by attendees of recent workshops held in Cape Town and Johannesburg by two pioneering companies in the payments and collections field who have joined forces to help tackle South Africa’s growing consumer debt problem.
The Emerging Markets Payments Group (EMP) has partnered with Katabat (formerly CMC Agile) (Collections Marketing Centre) to help companies manage customers in arrears and enable individuals to take control of their repayments schedules through the intelligent use of agent-based collections, customer self-service via the web and mobile channels. This increased control results in improved collections rates, reduced cost to collect and greater customer satisfaction.
The goal of the research was to gauge expert views on the current state of consumer lending and trends regarding the number of consumers experiencing repayment difficulties as well as to understand the industry’s view of techniques and processes being deployed to assist, manage, and collect consumer debt (customer experience management).
As consumer debt in South Africa continues to rise, all lenders are being negatively affected as customers fail to settle their bills and ignore repeated requests to pay. According to South Africa’s National Credit Regulator, which is trying to reduce unsecured lending levels, nearly half of all consumers are at least three months behind on debt payments.
The trend toward greater bad debt write-offs and the direct connection to company profitability is emphasised by the vast majority of respondents indicating that the topic receives board level attention.
To help customers in arrears, some companies are restructuring repayment schedules and changing their internal collections processes. However, the survey makes clear that South African companies could increase revenue collection levels by deploying best-practice technologies and systems.
Many organisations in South Africa which extend credit, including banks, retailers, personal loan companies, local government and utilities, are using outdated legacy collections systems to manage outstanding customer debt. The survey shows that in today’s rapidly evolving consumer landscape this is no longer a viable option. Only continual innovation and the ability to address the customer via their preferred channel in an innovative and engaging way will result in reducing exposure to the consumer debt mountain.
EMP and Katabat (formerly CMC Agile) are now providing these types of organisations with the most advanced and innovative arrears management and collections technology available today in order to boost collection rates while improving the customer experience.
Vytas Kisielius, CEO of Katabat (formerly CMC Agile), said: “Clearly there is an extremely worrying debt problem in South Africa and stories tend to focus on the effects of debt on consumers who are struggling. There has been little analysis of how outstanding consumer debt and increasing levels of write-offs are affecting the bottom line of South African companies. Our survey clearly shows that companies need to get more pro-active in their management of customers in arrears”.
Mike Crawley, CEO at EMP Southern Africa, says “Rising debt levels in South Africa are affecting the viability of many businesses which must explore every technique available to recoup payments. Enabling customers to self-cure is a straightforward and proven way to improve collections rates. Katabat (formerly CMC Agile)’s FlexCollect brings best-of-breed and proven technology to Africa’s lenders.”
Vytas Kisielius will be speaking at the 6th Consumer Credit Southern Africa Conference at the Emperors Palace, Kempton Park, Johannesburg on September 18-19 2013.
Emerging Markets Payments (EMP) is the leading electronic payments processing company in the Middle East and Africa (MEA). EMP covers all elements of the payments value chain from issuing, acquiring and switching through to card procurement and personalisation. It also covers all the major channels, being card, mobile and Internet. EMP is currently partner to over 140 banks and 30,000 retailers across 45 countries in MEA. The company also offers a full range of eGovernment solutions. EMP offices are located in Cairo, Egypt; Dubai, UAE; Amman, Jordan; Nairobi, Kenya; Lagos, Nigeria; Cape Town, South Africa.
About Katabat (formerly Collections Marketing Centre)
Katabat (formerly CMC Agile)’s cloud-based enterprise collections solution consolidates all credit-related strategies for offers and correlates all communications, including phone calls, web visits, emails, texts, and letters between an organisation and its customers into a single and much more effective dialogue. This enables organisations to adopt a far more targeted, personalised, and responsive approach to engaging with customers who are in arrears.
Its solution includes a self-service option which enables people in arrears to manage their own repayments schedule online. Removing the need to contact a call centre agent improves overall customer response rates while allowing customers to manage their affairs in a less stressful way that improves the lender’s ability to prove regulatory compliance – all the while reducing the costs of running a collections operation.
Collections Marketing Centre UK Ltd (Katabat (formerly CMC Agile)) offers a pioneering customer experience management service that enables lenders to deploy completely synchronised collections treatments, individualised offers, personalised communications through a wide array of contact methods promising more rapid account resolution across credit card, real estate, student, and instalment loan products. The company’s FlexCollect® managed service solution is helping a rapidly growing number of top lenders collect more, spend less and ensure compliance by increasing the efficiency and effectiveness of their charged off, delinquent, and pre-delinquent portfolio operations.
For more information please visit www.emp-group.com and www.katabat.com or contact Katabat (formerly CMC Agile)’s PR representative Bridget Fishleigh – firstname.lastname@example.org, +44 7946 342 903 or skype: bridgetfishleigh