What does it take for a bank to be successful? In the present market context, banks need to offer customer-centric products and services, ensure a seamless omnichannel experience, and consider innovative new business models to serve customers better. But true success also depends on efficient and cost-effective operations management, and sound revenue management. Identifying and plugging revenue leakages is critical for ensuring a successful and profitable business. And managing payment defaults, bad loans and other kinds of customer-driven fraud constitutes a big part of protecting revenues. Banks are now considering ways to ensure payments without disrupting the customer experience and forced or event-driven revenue collection is a strategy that is gaining popularity today.
What is Event-Driven Revenue Collection?
Most banks today use a revenue management platform to compute charges and manage billing and invoicing. Automating these processes are crucial for avoiding manual errors and ensuring a seamless experience for customers. Most platforms in circulation today are also capable of managing collections – they are tightly integrated with the core banking system and instruct it to debit money from a customer’s account once a billing cycle is complete or the customer has consumed the pre-determined level of services for a period. This revenue collection process typically happens at regular intervals as agreed upon with the customer.
The customer may initiate changes to their banking relationship. This could be a change of product or a request to switch enrolled product offers and bundles. This naturally halts their existing plan midway and there is a risk of non-payment. To mitigate this risk, revenue management platforms should be able to trigger the revenue collection process even if the cycle is interrupted midway. This is called event-based revenue collection or forced collection and is particularly important in high-risk markets and with high-risk customers. For example, a customer may switch their product offers or bundles. Once this change is done, a new billing cycle will begin while the previous one will be stopped midway with an outstanding amount in place. Without forced collection, the customer can go without paying their dues and without ever availing of the new cycle. Revenue management platforms designed to carry out forced collection can ensure the change is implemented only after the collection process for outstanding dues is completed. This is vital for revenue protection and for avoiding losses.
The Value Delivered
In a banking relationship the customer wants a seamless experience, and the bank wants to avoid payment defaults and plug revenue leakages. Forced collection or event-based revenue management protocols are important for ensuring that both the banks and the customer’s interests are met. A customer wants the freedom to make changes to their bank account, transactions and plans whenever and however they want. The customer relationship manager wants to give customers the agility and flexibility they expect to keep them happy and get more referrals. The customer service agent wants to avoid customer disputes later in the billing cycle. The product manager wants full transparency and continuing customer trust. They want to be able to encourage and help customers switch to new products and experience newly marketed offerings even as they ensure revenue protection. And the revenue assurance manager wants nothing better than to avoid accumulation of dues and possible defaults. Event-based revenue management ensures that all parties involved in the process are happy, their objectives met, and full collections guaranteed.
To be able to carry out forced collection, banks need to deploy advanced revenue management platforms that come equipped with this specific functionality. Most revenue management systems already integrate seamlessly with existing core banking platforms. All that is required now is to introduce the forced collection capabilities. Banks must work with experienced partners who have the advanced technology platforms required for this process. In a world where competition is intense, banks cannot afford to lose revenues due to operational inefficiencies.