Anshuman Panwar, Co-Founder, Creditas Solutions

25 Apr 2022 , 06:02 PM

In an interaction with Mamta Maity, indiainfoline.com, Mr.Anshuman Panwar, Co-Founder, Creditas Solutions said “Today, we are recognised as a pioneer in the field of fully automated digital debt collections and the largest ‘Neo Collections’ platform provider.”

Brief background of the company and its journey so far in India?

Madan Srinivasan and I co-founded Creditas Solutions in 2015. Prior to that, we were both working in the UK for 5 years with Validor Capital, a company that bought distressed debt from big banks, equivalent to an ARC in India. Madan and I joined that company in 2009 and our primary role was to build granular segments and profiles of customers based on their payment propensity and apply intelligent analytics to collect on their dues.

A few years later, the entrepreneurial bug bit us. We thought to ourselves – why not start our own firm in India? Adopting a similar approach by bringing in big data and machine learning to create a neutral impartial system which would allow customers to come in and use the interface to pay the banks. The other objective was to build more analytical tools to help the banks recover more.

This is how we started Creditas Solutions. Today, we are recognised as a pioneer in the field of fully automated digital debt collections and the largest ‘Neo Collections’ platform provider. Our overarching goal is to transform the traditional debt collections industry by deploying new-age technology.

Creditas is currently working with 20+ clients across the banking, NBFC and Insurance sector including HDFC Bank, ICICI Bank, Axis Bank, SBI Cards, RBL Bank, Kotak Mahindra Bank, etc. We service $4.5 billion in delinquencies and collect $100mn every month.

What is delinquency management and how has new age technology impacted the process?

Let me first explain what default accounts are and how this whole process works. Delinquent accounts are those that are way past their due dates of payment. Banks and financial institutions first gather and sort data of the delinquent/ NPA accounts, and then align collections agencies, who are typically field/ feet on street agents or tele calling agents who physically or telephonically reach out to the customers for debt settlement. The negotiation process to ensure the customers repay their dues is not an easy one, as all the customers may not clear their dues immediately at one go. So, the entire process requires constant prodding and push by the agencies and is time consuming as its managed manually. During this process, collections agents tend to adopt all sorts of harassment tactics, which gets unpleasant in most cases, leading to additional stress for the delinquent customers.

This is a very traditional approach towards debt collections, and therefore builds the case for adoption of new age technologies to simplify and streamline the debt collections ecosystem. With the use of Artificial Intelligence and Machine Learning, it becomes much easier to understand and map varied customer behaviour trends and adopt a hyper personalized approach. The entire collections process becomes much faster, convenient, cost efficient, customer oriented and fully compliant. The customer base can also be increased effectively with the use of technology.

Our flagship product Ethera, a SaaS based ‘Neo Collections’ platform leverages Artificial Intelligence and Machine Learning to execute a full stack end-to-end delinquent customer outreach. It seamlessly plugs into the lenders existing collections management system and organizes data to identify preferences of each consumer w.r.t how and when they wish to be contacted, preferred language, etc. Based on the customer preference, our platform adopts an empathetic personalized approach to intelligently engage, educate, and persuade the customers to repay their dues. It’s a completely digital and non-intrusive way of collections and benefits both lenders and customers.

How do banks and lenders benefit from your services and how does it affect the NPA rate?

For every lender, ensuring timely payments and managing collections is crucial to manage balance sheets and keep NPAs under control.

Lenders primarily face 3 challenges when it comes to collections:

• Cost of collection
• Regulatory compliance
• Effective customer engagement

Traditional collections is a very human driven and an expensive process. A lender can’t easily scale their collection infrastructure based on their needs. Maintaining compliant collection practices while running human driven collections is always a challenge. Regulators have formulated strict regulations and have levied fines on lenders for violation.  

Our product Ethera addresses all these challenges while boosting collections for lenders. Using technology, Ethera helps lenders increase their rate of recovery and it does so in a cost efficient, compliant manner. It can easily scale to handle collection from a portfolio of a few thousand customers to large portfolios of more than 100,000 accounts in a fairly seamless manner.

Each customer wants to be engaged in a personalized way. Through its contextual workflows, Ethera engages and motivates customers by helping them resolve their debts with a flexible, self-serve digital platform. Consequentially, the account resolution rates for lenders increase.

Shed some light on your product and its partnership with various banks.

Ethera, our flagship product, is a SaaS based ‘Neo Collections’ platform that leverages Artificial Intelligence and Machine Learning. It works with lenders’ existing solutions by analyzing data to help lenders get a holistic customer view. It cleans the customer data and enriches it using external data sources.

Ethera has the ability to understand demographic and psychographic data. This is used to create crisp customer segments. This helps the platform create a customized engagement and retargeting strategy for each customer segment to maximize communication outreach. Furthermore, the platform uses contextual nudges to engage with customers across all delinquency buckets.

Our Neo-Collections platform benefits both lenders and borrowers. Lenders can lower the cost of collections by upto 60%, and borrowers are engaged through personalized nudges in an empathetic, non-intrusive manner. This approach boosts customer engagement by 4x, improving collections rate by 15%-35% across different buckets and portfolios.

What impact did Covid 19 have on the delinquency management industry?

Pandemic made physical collections impossible. Banks and financial institutions had to adapt to digital channels en masse. In the process, they understood that technology can be very effective in driving their collections processes. Their biggest worry (besides recovery rates) is to run compliant collections operations. Technology is great at assuring that.

Being tech driven makes the recovery process sophisticated and compliant. Customers are now used to digital and self-service options that they can use at their convenience. According to our internal data, 89% of consumers in the 18-35 age group and 87% of consumers in the 35—50 age group prefer flexible, digital, self-service options.

We have seen an uptick in our engagements with financial institutions post Covid. Before the pandemic, we managed a few portfolios and today, we are working with banks across multiple portfolios and managing the entire collections process. 

Highlight future plans of your company, and how does it aim to progress?

In FY23, our aim is to cross Rs100 crore in revenue. We want to onboard 50-60 clients across the banking, finance services and fintech space globally. This is our third straight year of profitability. We have invested a lot in building up our tech capabilities. The debt collections industry is increasingly waking up to the potential of technology. We want to ensure that we leverage our capabilities to realize this potential. 

Further, we want to expand internationally. The ASEAN markets are a priority for us. We are also looking at clients in the Middle East. The US is another market we have our eyes on. We are in the advanced stage of discussions with a few financial institutions in some of these countries.