Striving towards financial freedom
Nothing could have prepared the world for these extreme times. Economies around the globe are suffering, including those in Southeast Asia. For example, Thailand – Southeast Asia’s second-largest economy – has experienced the largest second quarter contraction of a staggering 12.2% in the period between April to June from a year earlier, its biggest drop since 1997’s Asian financial crisis. In Singapore, the overall unemployment rate rose in the second quarter to its highest level in more than a decade to 2.9% as retrenchments more than doubled to 6,700 and total employment declined amid the COVID-19 pandemic.
While some of us lost the freedom to eat out or go for a walk, a much larger portion of the world has lost their income. As a result, we are seeing a surge in customers unable or unwilling to pay off their debts. This has led to a massive increase in non-performing loans (NPLs). In these difficult times, professional debt management is critical. This is also when we must show our customers compassion and understanding so that we don’t lose them forever.
Debt collection in certain parts of Southeast Asia needs to change to become more effective and sustainable. The stereotype of a debt collector as someone who uses fear and intimidation tactics is gone. Instead, a more positive way of resolving debt is emerging. This can be further sped up with increased efforts and compliance by regulators.
As a company in the debt management business, we must start with changing the perception of a debtor to that of a customer. We believe that our customers want to repay their debts and that our job as debt managers is to support our customers with amazing service to make that journey the best possible experience. For Collectius, our goal of transforming the industry required a 360 approach, starting with culture. For example, Collectius has a company policy that bans the word debtor and we use the word customer instead. This is a major shift in mindset because a debtor has traditionally been talked down to as someone of lower standing. By calling them our customers, we program ourselves to view them as such and to provide good customer service.
As it turns out, managing our 3 million+ customers with integrity and care means that instead of complaints, we have been met with gratitude and compliments.
In line with this philosophy, we’ve invested in technologies such as a web portal that empowers our customers by giving them the freedom to settle their debts when and how they want through payments online. We also have an omnichannel system where our customers can reach out to us through their preferred medium – over the phone with calls and SMS, through social media or even email channels.
A third use of technology yields an upside with regard to compliance. For example, our upcoming speech and text analytics software will serve to give us 100% quality management surveillance and learning feedback loop to agents, thus reducing risk and improving customer experience every day.
Professional debt management and debt sale is critical to the financial stability of the economy as well as for banks to manage their way through this crisis. Collectius has recently raised USD 60 million together with the International Finance Corporation (IFC) – a member of the World Bank – to support banks and financial institutions in the region dealing with the effects of COVID-19.
Collectius’ focus on being a leader in transforming Southeast Asia’s debt management industry is the core reason why the IFC chose Collectius to build its first Distressed Asset Recovery Program (DARP) in Asia. Collectius and IFC are also working together to examine the industry with a view to designing best practices around debt monitoring and resolution, and how this may serve to beneficially affect regulations in Asia.
There’s no denying that we live in turbulent times, but person by person, debt by debt, we are determined to give everyone a chance at a brighter, debt-free future.