How Pega revolutionized the collections in financial services

Auto finance services have become an essential aspect of the modern automotive industry. With the increasing demand for cars, coupled with the rising cost of purchasing them, many people are turning to auto finance to help them acquire their dream vehicles. However, with the growth of the auto finance industry comes the challenge of managing collections.

With Pega, we were able to achieve and strategy collection for our Auto finance clients.

In this blog, we will delve deeper into the problem of collections in auto finance services, and how Pega can help solve it.

Challenges in managing collections.

Collections are an essential aspect of auto finance services. When customers fail to make payments, it affects the entire business's bottom line. This is because auto finance companies rely on the timely payment of loans to generate revenue.

The delay in payment collection causes the company to lose money. Unfortunately, the collections process can be very time-consuming and expensive for auto finance companies. They must invest a lot of resources in chasing down delinquent customers, which can be a daunting task, especially for large finance companies. Additionally, the collections process can be emotionally charged, with customers often feeling harassed or intimidated.

Another challenge that auto finance companies face is the lack of visibility into the collections process. This can make it difficult to prioritize collections efforts or identify customers who are most likely to pay. As a result, auto finance companies may end up wasting resources chasing down customers who are unlikely to pay, while ignoring those who are willing but unable to do so.

How Pega was able to overcome these challenges

 

Pega as a solution helped in catering to all the shortfalls of a collection process while accelerating collection rates. Collections Application is designed to automate repetitive tasks such as sending reminders, making calls, and sending letters. This frees up the collections team to focus on more critical tasks such as negotiating payment arrangements with customers.

 Collection Application provides auto finance companies with real-time visibility into the collections process. This enables them to prioritize collections efforts based on customer behavior and payment history. The system also uses machine learning algorithms to predict which customers are most likely to pay, enabling auto finance companies to focus their resources on those customers who are most likely to make payments.

This application also offers a more customer-friendly approach to collections. The system uses personalized messaging to communicate with customers, making them feel more valued and less harassed. This can lead to a better customer experience, reducing the likelihood of customers falling behind on their payments in the future.

Automated monitoring and creation of respective Phone Calls, Field Visits, Litigation, Repossession, Write Off, Recovery etc., incorporating payment behavior into contact strategies and process guidance helped in increased operational efficiency of the collections team.

End-to-end automation ensures tasks are managed in accordance with service policy, including queuing, skills-based routing, and escalation based on service-level agreements and prioritization.

Additionally, the application is designed in a way that is scalable to any new region across the geographies. Where other platforms leave you with a mess, Pega makes complexity a piece of cake. A Situational Layer Cake. The name is a little geeky, but the technology is powerful – and patented! 

The Collections application for the auto finance industry was built with an elegant Situational Layer Cake architecture. Everything you deploy in Pega – processes, rules, data models, UI – is organized into layers.

This means you can roll out new products, regions, or channels without copying or rewriting your application. You declare what is different – and only what is different – in layers that match each dimension of your business. Hence including new geography was not taking more than 6 weeks.

The outcome of using Pega for collection services

By implementing Collections, auto finance companies can achieve several outcomes. Firstly, they can reduce the cost of collections by automating repetitive tasks and prioritizing collections efforts based on customer behaviour. Secondly, they can improve customer experience by providing a more personalized and less confrontational approach to collections. Thirdly, they can increase revenue by improving collections efficiency and reducing the amount of time it takes to collect payments.

Conclusion

Collections can be a challenging aspect of auto finance services. However, with the help of Pega, auto finance companies can streamline their collections processes, reduce costs, and improve customer experience. The use of machine learning algorithms and real-time visibility into the collections process can enable auto finance companies to prioritize their collections efforts and focus on customers who are most likely to pay.

Additionally, Collections application offers a more personalized and less confrontational approach to collections, making customers feel more valued and less harassed.

Overall, a powerful solution to the problem of collections in auto finance services has been offered in the form of Collections application using Pega. The result is: consistent, compliant interactions across multiple accounts and channels that allow lenders to be customer-centric while increasing collection rates and operational efficiency.

Blog Authored by:

Jeyanthi C 

AVP Presales