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The Roland Berger Study : 83% of the Romanian banks sell or are going to sell some of their debts

Approximately 83% of the banks in Romania and 80% of the banks in Central and Eastern Europe – ECE sell or are going to sell some of their debts. Almost all interviewed banks in the region coordinate and organise collecting activities on retail in their central sector.

The first phase of recovery of debts is usually managed by the bank, while the two thirds of the players in the region and 85% of Romania outsource at least partially the recovery of older debts. The most common communication forms with the debtors clients are the phone and the letter but more efficient instruments from the point of view of costs, such as SMS or electronic mail are more and more used, a Roland Berger study shows, published on Monday.

The study was made on 50 banks in ECE including Romania. « The management of debts becomes a very important sector of banking operations, as regards costs and profit and the subject is not very discussed on the market » Patrick Desmares, general secretary of EFMA says. The comparative analysis of the banks in ECE as regards the process of collection, organisational framework, performance measuring practices and support infrastructure, show important differences. «  This study shows the need to improve the processes for  some of the players in the region, to keep the pace with success practices ».

 

• Outsourcing recovery and sale of debts – 83% in Romania

The proportion of banks who take into consideration the sale of debts is significant : 79% of the interviewed banks ( 83% in Romania) sell or intend to sell some of their debts, although the volumes are still small. «  The majority of banks in ECE use the sale of debts to reduce risks, to balance the balance sheet, as a measure of last resort in the case the economic coming back is still fragile or only as an alternative strategy to free resources » says Hendrik Bremer, Partner Roland Berger Strategy Consultants specialised on Financial Services.

The first stages of debt recovery are managed in the bank – only 35% of the banks ( 33% in Romania) use or intend to use recuperators of debts for this segment. As regards the late recovery, more than two thirds of the banks in the region ( almost 85% in Romania) outsource it at least partially. As regards the judicial recovery, although the banks try to limit it ( due to long procedures and limited success) more than 50% of them manage this process «  in-house ».

• Collection process – sofisticated approach is used by only one third of the banks

The level of complexity of recovery strategies differ from bank to bank, in Central and Eastern Europe. The most often, the banks in the region make a difference on the basis of easily evaluated criteria such as product or client share. The sofisticated approach, on the basisi of behavioural analysis, is used by only third of the banks. «  the most efficient practices in the study start from an analysis of the client profile, his behaviour and his needs. On the basis of these proposals, there are different payment plans and communication are made with the purpose of maximizing the percentage of positive responses. These techniques are operated by telecommunication operators and are adapted in banking retail » Codrut Pascu, Managing Partner of Roland Berger Strategy Consultants says. The most used communication means with over-due clients are still the phone and the letter. However, the tendency which is the most important for the use of efficient instruments as regards costs, such as SMS or electronic mail, which the two thirds of the banks in the region apply the phone communication or postal communication. In Romania these instruments are much more used, 100% of the banks using them besides communication forms.

• Only one third of the players in the region implemented an advanced technology of call center. In Romania this level is higher – 67%

But surprisingly, although it is based on phone contacts, only one third of the players in the region implemented an advanced technology of call center. In Romania this level is higher, 67% of the interviewed having such a system at hand. Almost all interviewed banks in the region coordinate and execute the majority of recovery activities for debts on the retail segment in their headquarters. Approximately one third on the banks ( 17% in Romania) have collecting structures additional at the regional level of at the level of the branch – they are used in the activity of collection «  in the field » and for some segments of clients or exposure level. «  In the banks in the region, the level of specialisation of collecting unints varies. Many banks have units dedicated to some segments of clients, more than two thirds of the players using collecting units for individual clients » Hendrik Bremer Partner Roland Berger Strategy Consultants says.

Depending on the level of automation and outsourcing, the number of personnel involved differs from one bank to another. The majority of the banks in the region have a percentage of 2.7-6.0% of the personnel involved in debt recovery. With an urgent need of additional capacity for collection during crisis, the majority of banks increased the involved personnel, often while in other areas of activity they reduced the number of employees.

Sursa: http://www.actmedia.eu

Tags: banks laquo clients communication regards raquo level third players recovery study berger their debts region romania roland