Context
A customer's loan instalment fell into arrears because the linked account was empty — while the same customer might hold sufficient balance in another account at the same bank. Because the system did not bring those two facts together, the bank delayed a receivable it could have collected, and the customer paid default interest while able to pay. Both sides lost: default risk for the bank, and a cost that felt unjust to the customer.
Approach
- A control step was defined so that at the moment of delinquency, accounts beyond the linked one were also queried.
- Decision rules were written for which account types could be applied, in what order and under what conditions.
- To avoid customer dissatisfaction, the limits of automatic collection and the notification flow were built into the process design.
- Reporting outputs were defined so the results of collection decisions could be measured.
Outcome
- Needless default interest stopped accruing for customers who were able to pay.
- The collection decision moved from individual initiative to defined rules.
- A share of delinquency-driven complaints was resolved at source.
- The bank could collect a collectable receivable at an earlier stage.
This case study describes the project through its scope and approach. Client name, commercial figures and performance metrics are withheld under confidentiality obligations.
What This Project Left Behind
Part of every collection problem is not an ability-to-pay problem but a visibility problem. An institution that cannot tell the two apart manages a customer who can pay as though they cannot, and damages the relationship needlessly. The same principle holds on the corporate side: a collection policy built without knowing why a receivable went unpaid ends up penalising good customers.
- Banking & Credit Process Advisory — Strategic advisory on restructuring distressed loans, financial analysis, negotiation preparation and process management with banks.