Debt collection business is full of challenges but also rich on rewards. All the big financial organizations and banking institutions depend on the debt collecting agencies to pursue the delinquent debts and collect. There are already so many agencies out there in this space that a new debt collection agency startup might be a little hesitant in joining the bandwagon.
What to do beforehand?
The start-up therefore should ensure that they have done field study before entering the debt collection universe. Of course, the business is resource intensive since every debt collecting agency requires men in the field. Not just people in the field but also they require army of legal experts and so on. These are known challenges that a start-up might have done first hand research on.
However, very few start-ups do research on the process and the challenges involved. There are several processes involved in debt collection and most of the agencies go through the similar challenges such as addition of a new DCA which requires the management to do considerable changes in the internal system. Of course, this would also require the assistance of IT development resource. Creditors are often hesitant in giving a contract to the new agencies despite the existing one not performing in line with the expectations. Change in DCA is one of the most significant reasons of this issue.
Maximum debt collection agencies rely on the manual processing and therefore delay in resolving the customer queries is inevitable. As a result the whole process moves at snail pace and hinders with the speedy recovery of the debt. Manual process alone can jeopardize the whole debt collection slow therefore making the entire process costly. A startup with the aim of automating such processes can surely break the code of getting success setting up a world-class debt recovery agency.