LONDON--(BUSINESS WIRE)--According to the latest procurement intelligence report from Technavio, the global credit collection and collection agency services market is expected to grow at an impressive CAGR of 15% over the next five years due to an increase in businesses' need to improve buyer satisfaction and maximize debt recovery.
The research report titled ‘Global Credit Collection and Collection Agency Services: Procurement Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“During the forecast period, creditors, such as banks, are expected to invest in recoveries with primary focus on unsecured consumer debt due to an increase in non-performing assets,” says lead Technavio procurement specialist Angad Singh for category spend intelligence. “Buyers outsource debt collection service activities, to third-party service providers, as it reduces their operational costs,” adds Angad.
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Cost saving opportunities in the credit collection and collection agency services market
The adoption of various cost-optimization levers helps buyers of credit collection and collection agency services realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the credit collection and collection agency services market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology saving aspects
Adoption of technologies such as strategic predictive analytics, automated payment and remittance, and online skip tracing of databases for real-time statistics related to amounts owed and the amount paid by debtors can help rake in savings to the extent of 7%.
Buyers outsource collection accounts to suppliers that have the necessary technological expertise to assess customers' records to check financial stability, and their ability to pay the debt. They prefer suppliers that use skip tracing to track businesses or individuals whose contact information is no longer valid.
Adoption of negotiation strategies saving aspects
Suppliers of credit collection and collection agency services can offer value additions such as free consultation services regarding customer insights during negotiations with prospective buyers. The ability of suppliers to track customers that have changed their contact information on social media and in credit card transactions is an indicator of their level of experience and expertise.
Bundling of services saving aspects
One of the most opportunistic strategic cost saving levers in the global credit collection and collection agency services market is the bundling of services related to debt collection such as analytics and customer relationship management that help maximize the amount of debt recovery and allow creditors to develop repayment plans in collaboration with defaulters.
If collection agencies cannot resolve matters, buyers expect them to move collection accounts to relevant attorneys that work on a contingency basis. Hence, they are expected to have a network of such attorneys for this purpose.
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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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