Risk Advisory

Smart Collections

Debt collection is a fail-safe mechanism to manage risks associated with providing services or lending money. The bigger the debt portfolio of an organization, the more important it is to continuously improve operational excellence of debt collections.

We have extensive experience with the optimization and set-up of collections processes targeting the spectrum of customer segments from large corporates till private individuals for our clients across industries, including Banking, Telco and Insurance.

We help organizations to increase collections efficiency via review and optimization of all aspects of collections processes. Our ultimate goal is to help organizations collect more money, faster, while spending less on overall collections processes.


Our Services

Collections Health Check

Review of end to end enterprise collections set-up, identification of inefficiencies and improvement roadmap preparation.

Early Warning System (EWS) Set-up

Set-up or optimization of EWS adjusted to specifics of your portfolio using statistical modeling.

Collections Strategy & Processes Optimization

Data driven redesign of collections strategy and operational processes and test of new proposed set-up in pilot mode.

Collections Contact Center Optimization

We help to improve overall effectivity of the collections contact center operations via data driven process set-up adjustments.

Preventive Loan Modification Program

We set-up campaigns targeting customers likely to need forbearance with loan modification offers before they enter collections.

Proactive Forbearance Program

We set-up or optimize proactive forbearance programs to improve overall cure rates of customers in temporary financial distress.

NPL Clean-Up & Portfolio Evaluation

We assess overall non-performing loan portfolios and design exit strategies maximizing overall recoveries.

Collections IT Systems Implementation

We help organizations to select and implement the best IT system to fit their specific needs.

Collections Health Check

In as short as 4 weeks, we review organizations entire collections processes and operations, perform deep data analysis and prepare an assessment report summarizing as-is collections maturity and potential for improvement. Our consultants also prepare a roadmap of improvements with calculated business cases supported by data analaysis. The ususal project outlines several quick wins, that are implemented during the healthcheck, 6-10 key improvement initiatives to start right after the healthcheck is finished and up to 30 recommendation in the area of collections strategy, segmentation, treatments, process set-up or contact center operations.


Standard Collections Stages

Early Collections

Typically, between 1-90 days-past-due (DPD), early Collections is all about efficiency. With high self-payment, our job is to identify clients who require limited actions, and the rest. For the remaining portfolio, apply cost-effective communication strategies to eliminate most of the unpaid debt. The assumption here is that the client is not in real trouble and can repay, unless proven otherwise.

Late Collections

Typically, between 90-180 days-past-due (DPD), clients are undeniably in trouble. It is necessary to build prudent management of non-performing loans (NPLs) and to apply healing tools/treatments such as credit counseling, restructuring, voluntary asset sale, settlement, or simple repayment plans. Adastra Business Consulting is proud that dozens of customers have improved their NPLs due to our involvement.

Legal Collections & NPL Clean-Up

Typically, over 180 days-past-due (DPD), we offer services which improve recoveries from exit strategies, be it legal collections, debt settlement, debt sale or other suitable treatments. In this stage, improvements can be done through clear case assignments in terms of activities and time, prudent deadline management, relentless negotiations, exception management and other tools.

Early Warning System (EWS)

Early Warning System helps senior managers to identify risks at the nascent stage and forecast events likely to negatively affect the organization. An EWS system is essential for both retail and SME/corporate portfolios to improve the categorization of clients based on their risk and to increase control over the portfolio. We help organizations to set-up proper Early Warning Systems adjusted to specifics of their portfolio.

Collections Strategy & Processes Optimization

One of the key determinants of collections effectivity is a well set-up, measured and continuously challanged collections strategy, supported with well defined and executed collections processes. During collections strategy and processes optimization project, we focus on the following main areas:

  • availability of communication and repayment channels and availability and validity of customer contact information
  • availability of customer and repayment information and dashboards and reports describing effectivity of the collections process
  • system support of modelling processes, case assignment and collectors across all stages of collections
  • performance of collections segmentation in different decision points across collections
  • performance and timing of pre-collections and collections actions and treatments
  • economics of process, standard payment peaks, grace amount set-up, timing of collections start for various customer segments
  • KPIs and incentive schemes of parties involved in collections process

Collections Contact Center Optimization

Collections contact centers are, especially for the retail portfolio, a key driver of collections. Improvement of  contact center processes has potential to significantly improve cash collected. During collections contact center optimization, we focus on the following main areas:

  • contact center capacities, scheduling process and staffing during prime time, call list coverage and usage of IVR or voicebots to handle early collection stage calls
  • dialer set-up and dialing mode, dialing strategy, dialing queue prioritization, spin rate and set-up of inputs for dialer predictive mode
  • organizational structure of the contact center, hiring and training process, quality assurance process
  • availability and quality of call scripts, training materials and products knowledge base
  • current set-up of KPIs and incentive scheme, relation to cash collected and collections process effectivity
  • data, reports and dashboards availability for the contact center collectors, supportive teams and management
  • system support of the standard collection tasks in the contact center operations, identification of missing or not used functionalities

Preventive Loan Modification Program

The sooner treatment of a customer in serious financial distress starts, the higher are expected recoveries and lower collection costs. For selected sub-segment of customers, it's economically more beneficial to pro-actively offer loan modification before the customer falls behind the payment schedule. 

We can help you to set-up preventive loan modification programs aimed at the reduction of the inflow of new cases into collections as well as decrease the needs for loan loss provisions associated with forbearance programs that those clients would likely have to go through if treated re-actively.

Proactive Forbearance Program

Once the customer falls into collections, it's imperative to as soon as possible determine and assess the seriousness of the client situation and offer solutions that fit their situation. Selected sub-segment of the customers with expected long-term financial troubles should be pro-actively treated with appropriate forms of forbearance programs.The usual mistake organizations make is to design a forbearance program that only prolongs the inevitable and customer defaults are the result.

We help organizations to set-up proper pro-active forbearance programs aimed at the increase of overall lifetime recovery of the customers in serious financial distress and minimizing defauts after the program ends.

NPL Clean-UP

Organizations with significant stock of non-performing loans with 180+ days past due (DPD) often seek a reasonable exit strategy for the non-performing portfolio. We have designed a project addressing such needs aimed at the assessment of the overall non-performing portfolio and design exit strategy maximizing overall recoveries. Our approach consists of deep portfolio and repayment behaviour analysis, portfolio segmentation and preparation of clear guidelines and processes for execution of the appropriate exit strategies. Typical tools used during the exit strategies are restructuring, voluntary asset sale, pre-legal negotiations, legal collections, debt settlement and debt sale.

Debt Sale and NPL Portfolio Evaluation

We help organizations to evaluate fair value of non-performing loans (NPLs) portfolio based on its expected future performance from the position of seller or buyer. Also, we provide service of end to end organization and execution of debt sale, including initial portfolio evaluation, preparation of portfolio documents necessary for the sale and negotiations with potential buyers.

Collections IT Systems Selection & Implementation

Appropriate collection system is a key determinant of collections efficiency. The modern collections process are based on the possibility to harness the power of  availble data and execute collections strategy in an effective way. There are plenty of modern collections systems designed to support different types of processes on the market. We help organizations to assess their needs in collections and select and implement the best IT system to fit their specific needs and situation.