Introduction to Collections

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The functionality of Temenos Transact Collections is based principally on the overdue debt records held in the Past Due or AA overdue component in Temenos Transact . The debt collection is available for all loan products in Temenos Transact Lending Suite, handled through the Arrangement Architecture (AA) or Loans and Deposits (LD)module.

When a borrower defaults on a due payment, the unpaid item is taken over by the overdue processing component (in AA or PD) and follows an aging process (buckets). These buckets segment collection items in different stages of case-handling.

Irrespective of the number of products and overdue payments and amounts, a delinquent customer has to be classified in one class. Any collection or recovery action should be based on the global customer position and not by product or payment. Therefore, collection items (records generated by the system when a customer defaults on a loan) are based on the customer’s ID, and not on individual AA or LD contracts. For a given customer, all accounts in arrears are placed under the same collection item collectively and are dealt with as such.

When a collector pulls a customer from a queue for follow up (no other collector should work on the same customer before it is released by the first collector), the worked record has to be stamped with a pre-defined action code (how communication was established) and an outcome code (the item’s status) describing the activity of the collector and the result of the action respectively. Some outcome codes can generate an automatic future outcome code.

Based on the outcome code, the worked record must either be re-queued in the same queue but with different priority or to be transferred to another queue for further action, that is, PTP, transfer to field collection, external agencies or no further action to be taken status. This is dependent on the criterion of the queues defined.

Once the customer has no leftover items in arrears, the items would disappear from the collections queues until the customer defaults again, at which point they will be again placed into an appropriate queue to be worked.

Challenges of Banks and Financial Institutions

Non-recovery of loans is one of the major risk areas that banks face, which impacts the bank’s overall balance sheet and profitability in an adverse manner. The NPAs (Non-Performing Assets) or not recovered debt is a major concern for every financial institution, thus every bank across the globe is spending considerate amount of time, money and effort on the recovery and collection of overdue debt.

It is for this reason that the Collections module is introduced in Temenos Transact to facilitate the debt collection process.

Collections for Overdue Items

Temenos Transact Collections is based on the overdue debt records held in the Past Due or AA Overdue component in Temenos Transact . The debt collection is available for all loan products in Temenos Transact lending suite, handled through the AA (Arrangement Architecture) or LD (Loans and Deposits) module.The collection module also handles debt collection for an overdraft current account. Overdraft accounts are monitored and tracked till the settlement of the overdue is actioned.

Monitoring Multi-Currency Collections

The Collections module supports monitoring and management of foreign currency overdues and records customer discussion outcomes in all currencies.

The collector can view the customer’s delinquent foreign currency loans, overdue amounts and subsequently record meeting outcomes in any currency.