Accentuated credit risk levels had become a challenge for ICICI Bank in 2008 following the US subprime mortgage crisis. Timely recovery of debt was seen as the way forward to mitigate this risk.
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But multiple factors such as the diversified set of customers spread across multiple regions, a number of collection teams using different philosophies, and the varied collection strategies employed by them to manage the delinquent pool had made debt recovery a complex job at ICICI Bank.
A system-based mechanism for allocation of recovery channel using a BI tool was considered as the right solution to address this issue effectively.
Developed in-house, the BI solution implemented in ICICI Bank includes components of SAS, Sybase, TRIAD, Posidex, Data Clean, and Blaze
BI system at ICICI Bank covers:
Benefits delivered by BI:
- Following the implementation of BI at ICICI Bank, its process of allocation of recovery channels has become transparent, efficient, and in line with the bank’s business objectives. The allocation rules and logic are agreed upon and deployed by a central team; deviations from the decided allocation, if any, are reported.
- The bank now is able to make use of soft-touch channels for the ‘first time defaulters’ and low outstanding cases, and allocate multiple loans of the same customer to the same employee, making the process effective. It has also helped it reduce complaint escalations by customers.
- BI has helped ICICI Bank to reduce the turnaround time for debt collection as it can now gives more time to its on-field collectors to resolve cases.
- With BI, ICICI Bank is able to improve its collection-performance and cut the credit losses.