Digital transformation has never been more of a hot topic. 79% of North American banking leaders believe their bank’s existence will be threatened if they don’t innovate faster. However, “digital transformation” is also a loaded phrase: it can mean a lot of different things to a lot of different people, and still puzzles executives in all industries. As a result, it can be quite overwhelming, particularly for debt collections teams who have been operating via the same systems and practices for years.
Digital transformation has been something of a rallying cry in European banking for years now, but do those words come with action?
Try as we might to change customer opinion, debt collections has struggled to shake its bad reputation in both established and emerging markets. Regionally, this could be down to a multitude of factors; from cultural differences and complicated local court systems to overly aggressive collections practices. These local debt collections problems have a knock-on effect on a regional scale. There are also various shared problems faced by debt collections agencies and banks across the globe.
Between 2015 and 2016, World Bank figures reveal that the average proportion of all loans that are non-performing (NPLs) rose over half a percent from 6.99% to 7.07%.
According to Gartner,the cost of servicing a delinquent loan is now 15 times higher than the cost of servicing a performing loan.
Pair this with a trend towards cutting operational costs, and you’re left with a situation where banks are being asked to collect more with fewer resources.
Digital transformation is big news in the Asia-Pacific region (APAC). In 2017, around 6% of the region’s collective GDP was derived from digital products and services; Techwire Asia predicts this will increase ten times over by 2021, with a predicted economic contribution of over $1 trillion.
Beyond raw economic growth, digital transformation brings operational changes to every industry. An IDC survey, sponsored by Microsoft, predicts that 85% of jobs in APAC will change significantly: business leaders are already looking to increase agility to meet the new challenges in cybersecurity, data processing capability and integrating technologies like AI and the IoT.
On the surface, the finance sector might seem equitable: over half of the world’s employees in the financial services sector are female. Drill deeper though, and a new picture emerges.
While the gender split, in terms of sheer numbers, is about right, leadership positions take on an altogether more masculine veneer. Women hold only 25% of senior management roles in the global Financial Services industry.