Only Collect: Digital Solutions Make the Difficult Things Simple for FCA Bank

While the uptake of sweeping initiatives, such as SEPA Instant Credit Transfer (SCT Inst) and SWIFT gpi, tends to grab all the headlines, there remain a number of other pain points for banks and corporates that can be addressed only through close dialogue between both parties. Let’s take credit collection as an example. This is a key contributor to many businesses’ cash flows, yet the process itself can often be time-consuming and frustrating. This frustration was felt by FCA Bank – an equally held joint venture between Fiat Chrysler Automobiles Italy and Crédit Agricole Consumer Finance – as it sought a faster, more efficient and more transparent solution through UniCredit.

Fortunately, new digital solutions are emerging to streamline the process – ensuring payments are collected quicker, with added efficiency and convenience for all parties – thereby generating considerable cost savings for creditors.

Understanding the problem 

The credit collection process, through which a lender seeks to recover and reimburse a consumer’s unpaid credit loans, begins once a consumer’s payment is overdue. This is typically after 30 to 60 days have passed, although this can vary depending on the terms of a pre-agreed contract.

Once a past-due payment is listed on a lender’s balance sheet, it is marked as a financial loss, which leads to reduced income and, in some cases, negative cash flow. For this reason, a streamlined approach to credit collection remains a high priority for all lenders. However, the traditional collection process is hampered by cumbersome, paper-based protocols and a high probability of ‘false positives’ where payments are incorrectly logged as overdue as a result of delays in the reception of incoming funds or other non-controllable events.

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