In recent years the amount of debt taken on by individuals and households has been steadily increasing and in tandem with that incidents of bad debts are also increasing. Needless to say bad debts are something that both debtors and creditors would want to avoid – and technology could play an important role on that front.
Optimizing Collections and Repayments
Technology has proved really helpful in avoiding of bad debts. It provides easy ways of collections and repayments. On the part of both creditors and debt collectors, making use of multi-channel reminders, flexible repayments, and convenient payment options can help a lot.
By that same token debtors can take steps to optimize their own repayments as well, by using readily available financial planning tools to track and organize their debts. Not only can such tools provide notifications via mobile apps, but many can also be used to create and track a budget that includes debt repayments.
Identifying High Risk Cases
In most cases ‘bad debts’ don’t just happen overnight, and there are often some very clear warning signs that creditors can observe. Using technology you can proactively identify high-risk cases. It will allow you to take pre-emptive steps and avoid the entire debt from turning bad.
If a high-risk case is identified early, as opposed to after having missed several months of repayments, assistance and support can be provided at that critical juncture. Sometimes it may even be beneficial to refer these cases to services that can help you in managing your debt or in providing you with debt consolidation loan so that it is easier to do so.
Needless to say, it is just as important for debtors to identify when their own debts are starting to spiral out of control. Of course identifying the problem isn’t so much of an issue in this case, though using technology such as financial planners could help you in putting the overall state of a debtors finances into perspective. More importantly however, the tools made available by technology could be used to keep debts from piling up further.
Communication and Support
Last but not least, using technology and the avenues it provides for communication and support can help both creditors and debtors. For creditors, modern forms of communication such as SMS, email, social media, or even mobile apps make it easier to provide notifications, warnings, and other forms of important communication. In the long run utilizing technology fully in this way could even prove cost effective, as opposed to relying heavily on call-centres.
These communication tools can also be used to provide support when needed. That support can take the shape of help, advice, or even solutions that help the debtors in furnishing their debt.
To put it simply, technology can play an important role on multiple fronts. It can save both creditors and debtors from bad debts. In the current uncertain financial climate it is well worth taking advantage of the role that technology can play, and utilizing it to its full potential wherever possible.
Article Submitted By Community Writer