How credit unions can prevent revenue loss in 2021

first_img 1SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Anthony Fattore Anthony Fattore is an Arizona-born writer, currently working on multiple novels, short stories, and articles. For now, he pays the bills with content creation. He studied English Literature at Northern … Details It often feels counterintuitive for financial institutions to write off bad debts. After all, a loan portfolio is an asset to any financial institution’s future revenue. Also, if a financial institution cannot practice debt collection effectively, how can other businesses follow suit?With more people losing their incomes due to this pandemic, credit unions have asked themselves this same question.The ProblemThese days, lending organizations are facing more regulatory scrutiny than ever before. As a result, operating costs and risk has gone up. Margins are tighter, and regulation has increased. So, if debtors don’t make payments, the situation looks bleak. The skyrocketing number of past due debts has exacerbated the problem, and the future becomes more and more unclear as to whether businesses will recover.An environment now exists where practices surrounding debt collection need to change to accommodate this increased risk. Yet, if collection practices are aggressive, the possibility of breaking the compliance regulation exists, not to mention the sheer reluctance to pay.How can financial institutions resolve this problem?Every financial institution has in place a reserve for bad debt. However, the traditional solution of writing off bad debts after 90 days is just not acceptable anymore. So, what can companies do? In the end, it comes down to making it easier to make payments while also analyzing the previous behavior.The SolutionToday, financial institutions’ tight margins mean it is essential to take a different approach toward mitigating risk. Intelligent analytics could prove to be important in this respect. It’s possible to identify patterns and avoid a higher percentage of risk by analyzing previous payment behavior. This allows companies to develop new strategies and make a more accurate forecast of incoming revenue. The latest predictive analytics and machine learning can optimize revenue recovery.It can do this by helping to determine the debtors who have the greatest likelihood of paying. This allows a company to put in place a more efficient accounts receivable management system. Our software will enable businesses to create custom reporting to choose what data is most important to them.Improving Payment SystemsWhile intelligent analytics have a role to play, making the process of paying easier is the right solution. The more difficult it is to make payments, the less revenue a company will receive. This is the reason why it is paramount to find the right card services for credit unions.Credit unions and other smaller financial institutions need to increase the number of ways in which people can make payments. By relying on paper checks, the chances of receiving monies owed on time dwindle dramatically. In the modern world, institutions that fail to utilize the internet are on a losing streak. They will lose out to competitors that can offer the facilities and systems that consumers demand.Streamlining the payment process is key to this. By offering IVR systems and web portals, institutions cater to the needs of today’s consumers. These systems make it easy to use preferred payment methods. They also allow debtors to make payments at a time and location to suit them. By merely facilitating easy payments, the chances of receiving timely payments increase.In short, data suggests providing more convenient payment methods to your members is the easiest way to increase on-time payments in general.How BillingTree Can HelpBillingTree offers cutting-edge payment solutions for financial institutions. By providing advanced card services for credit unions, we simplify the process of making payments. No longer do credit unions, and small financial institutions need to write off bad debts. By taking steps to streamline the payments system, the process of debt recovery becomes simpler. Not only can financial institutions increase their revenue, but they can also maintain their brand integrity. Your member’s safety should take priority, so it only makes sense to couple that with convenience. By utilizing contactless forms of payment, you’re setting yourself up for success in 2021 and beyond. To learn more about what BillingTree can do for your business, schedule a free demo today! This post is currently collecting data…center_img This is placeholder text last_img

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