In India, banks and financial institutions face increasing challenges with respect to debt recovery. It is estimated that close to 50% of debtors are left uncontacted after initial collection efforts. This leaves banks with crores of rupees in annual lost debt recovery. To give you an overview, all the banks have a certain amount of bad debt. Out of those bad debts the untraceable debtor, it comes close to 80%.
Since, the traditional method is not efficient enough to trace these people, this has resulted banks to start pondering for new AI-driven technologies. Here comes Ai-driven software called skip tracing software.
Skip tracing software allows banks to access a range of data sources, which enhances the efficiency of debt recovery by making debtor location faster and more accurate. The use of AI technology in debt recovery not only enhances the efficiency of debt collection but also minimizes operational costs. Industry reports indicate that AI-based debt recovery solutions can enhance recovery rates by up to 30-40%. Ikontel being in the industry over decades now offering best skip tracing software for Indian banks and NBFC to minimize monetary losses and improve recovery rates.
What is Skip Tracing Software?
In layman’s terms, skip tracing software helps tracking individuals who have avoided being traced for the collection of debt. For banks in India, it is the tool to use when trying to recover loans because the debtors cannot be located or have left town without a forwarding address. This AI-powered software, helps in tracing the debtor’s whereabouts faster and more accurately.
Some of the major functionalities include :
- Quick and effective locating of debtors through public records, social media, and credit reports.
- Increase efficiency in debt recovery by reducing time and effort for contacting debtors.
- AI-based debt recovery tools track debtor movement patterns and predict locations, hence increasing the possibility of successful collections.
How It Works:
Skip tracing software uses various data sources to trace debtors:
- Public records voter registrations, land records, and court filings.
- Social media profiles that may give current information about the debtor's activities and location.
- Credit history that entails previous addresses, current phone numbers, and financial transactions, among other things.
So far, banks that have adopted AI skip tracing report recovery rate enhancement by up to 35
percent.
Key challenges in debt recovery
Finding debtors is quite a challenge for banks and financial institutions. Some common reasons include the following:
- Change of contact details without notification.
- Deliberate evasion of debt collectors, especially when moving to a different state or city.
- Inaccurate or outdated information, leading to futile collection attempts.
Statistics reveal that about 50% of debtors cannot be traced after initial attempts, resulting in huge losses for banks and financial institutions. The inability to trace debtors is the primary reason why debt recovery rates are low in India.
Legal and Privacy Issues
All the banks should respect their customers’ privacy and safeguard confidential data. However, in India, debt recovery laws and regulations exist on several lines.
For instance, the Personal Data Protection Bill safeguards that debtor's information is treated decently, to which banking system must also cater to with privacy regulations regarding these AI debt collection tools.
Fact: Reserve Bank of India (RBI) states that 20-25% of debt recovery failures in the country are due to non-compliance with regulatory guidelines, including improper use of debtor information.
Current Techniques vs. AI-Powered Skip Tracing
Traditional Methods
Most of the banks currently leveraging omnichannel communication system to reach out to their defaulter to recover the loan. However, the existing communication system have significant limitations.
Traditional communication method includes :
- Manual searches of old addresses or phone numbers.
- Field visits to debtor locations, which often yielded no results.
- Physical letters and calls, which were rarely responded to by debtors.
Limitations :
- High failure rates (with up to 50-70% of debtors unreachable).
- Time-consuming processes, leading to increased operational costs.
Modern AI Techniques and Their Benefits
AI-powered skip tracing tools offer a much more effective solution by automating debtor tracking and using advanced algorithms to analyze vast amounts of data from multiple sources:
- Predictive analytics help forecast where a debtor is most likely to be located.
- Data is collected from multiple sources including social media and credit reports that improves the chances of debtor tracing.
Fact: According to a report, AI-based debt recovery boosts collection rates by 30-40% and reduces the recovery time up to 50% compared to the traditional way of recovery.
Skip Tracing Software That Helps in Debt Recovery
Tracing Debtors
Skip tracing software helps banks quickly locate evasive debtors. AI-based debt recovery solutions utilize multiple data sources such as public records, social media, and credit history to make more accurate predictions on debtor locations.
Benefits
- Faster debtor location reduces the time wasted during unsuccessful searches.
- Efficient contact rates with a debtor means enhanced overall recovery.
Improved Collection Rate
With AI skip tracing, the success rate of financial institutions in debt recovery will improve. This is because the time taken to track debtors decreases, thus enhancing the possibility of banks collecting overdue loans. According to a financial survey, the average improvement in recovery rates was at 35% by implementing AI debt recovery solutions.
Illustration: For example, when banks apply Ikontel skip tracing software, the recovery of debts can improve by as much as 40%.
Reducing Recovery Time
Another advantage of using AI for debt recovery is that it can reduce recovery time. Skip trace software allows automated tracking of a debtor and predicts the most possible locations of a debtor, hence decreasing time taken for identifying location, thereby shortening recovery time.
- Faster recovery times: up to 50% compared to the traditional collection processes.
- Efficiency rate: More cases are being processed by the banks with fewer resources.
How Ikontel Assists Banks in Maximizing Debt Recovery
Utilizing Skip Tracing Software
Ikontel's skip tracing software, powered by AI, is designed to assist Indian banks in improving their debt recovery strategies. With the help of advanced AI algorithms, Ikontel offers an efficient solution for finding debtors quickly and accurately, which significantly improves the efficiency of debt collection.
Why Ikontel is the Best Skip Tracing Software Company in India
Unique Features and Benefits:
Ikontel presents itself as the best skip tracing software company in India for:
- High-accuracy debtor tracking algorithms that run on large data sets, utilizing AI power.
- Real-time debtor information is provided to the banks for instant access to updated debtor details.
- In-depth integration with CRM ensures a comprehensive efficiency in debt collection.
Fact: According to latest studies, AI-based debt recovery software, can boost the collection rate up to 40%. You can achieve this by leveraging Ikontel’s skip tracing services. Furthermore, it is one of the most efficient tools available in the banking industry.
Ikontel's Skip Tracing Software Features
Ikontel offers the best skip tracing service in India, which provides a complete and efficient debt recovery solution. The software is powered by AI algorithms, with advanced machine learning that predicts debtor locations accurately and increases collection success rates. Data aggregation from sources such as credit reports, social media, and government records helps ensure that no stone is left unturned when it comes to locating debtors.
Designed with a user-friendly interface, Ikontel ensures quick adoption by collection agents, thereby boosting overall productivity. In addition, its CRM integration is seamlessly connected with existing debt recovery software, streamlining the entire collection process. With these cutting-edge features, Ikontel helps banks and financial institutions across India improve debt recovery efficiency and reduce operational costs, making it the go-to choice for businesses seeking the best skip tracing service in India.
Frequently Asked Questions (FAQs)
1.What is skip tracing?
Skip tracing is the process of locating debtors who have evaded contact. It involves gathering data from various sources to find their current contact details and location.
2. How does skip tracing software work?
Skip tracing software uses AI algorithms to analyze data from sources like credit reports, public records, and social media to predict debtor locations and improve contact rates.
3. What are the benefits of using skip tracing software?
- Faster debtor location and improved debt recovery efficiency.
- Higher recovery rates and reduced operational costs.
- Improved debtor contact success, leading to faster recovery.
4. How is Ikontel's software different from others?
Ikontel provides AI-powered debt recovery tools, real-time updation, and takes up all problems that haves to be integrated with debt collection solutions, making it one of the most efficient skip tracing tools in India.
5. Is skip tracing legal?
Yes, skip tracing is legal in India provided all the concerns come under privacy laws and ethical debt recovery measures.
6. How can skip tracing improve debt recovery rates?
By identifying debtors faster and increasing contact rates, skip tracing through AI is significantly powerful for debt recovery success.
7. How much does it cost to use skip tracing software?
It typically costs around INR 1-5 lakhs per year, based on feature sets and solution scale.
8. Is skip tracing legal in India?
Yes, skip tracing is legal only if it also adheres to data protection and privacy laws, which currently include the Personal Data Protection Bill.
