Alfam is a large consumer credit organisation in the Netherlands and a 100% owned daughter of ABN AMRO Bank. The client has just completed the full SEPA implementation in the back office processes.
Complication
Upon implementation of SEPA Direct Debit Alfam’s numbers of returns on collections increased significantly, to levels 3 or 4 times higher than before SEPA. This put a big stress on the organisation, as paying interest on loans and paying back loans is the core of their business.
Proposed Solution
Payments Advisory Group was called in to assist in understanding the nature of the problems. After an initial client meeting, Payments Advisory Group proposed to hold a workshop to identify the main issues felt by the organisation. On the basis of the results of this workshop Payments, Advisory Group performed detailed analyses on the processes of outgoing payments and incoming returns and proposed changes in the administrative process control.
Execution & Result
In the detailed analysis, a few issues with outgoing payments were identified as well as a more detailed breakdown of the returns, the cause and reasons for returns combined with the characteristics of the outgoing payments. This allowed for a focused break down and addressing the root causes of the problems in the areas where they were originated. The customer-facing department was given tools to handle customer conversations.
Two months after Payments Advisory Group was onsite the number of returns was greatly reduced down to normal levels
As a next step Alfam staff was trained by Payments Advisory Group to perform the analyses themselves.
In the ongoing support, Payments Advisory Group gave Alfam tools to even further reduce the number of refunds, specifically address client problems and look for solutions that would benefit the organisation and the client.