Product Code: 70127
The market for debt collection software is set to grow at a CAGR of 9.7% during the forecast period (2020 - 2025). More and more financial institutions are using automated systems and software or are in the process of implementing enhanced capabilities as it provides a very high level of efficiency and security when it comes to exchanging data, information, and money.
- The debt collection software industry is driven by various factors such as rolling out self-service payment models to speed up the collection process due to increase in the need to control, manage and automate all debt collection and recovery processes, rise in need to reduce bad debt and improve the cash flow while optimizing collection costs and surge in demand.
- In the United States, consumer debt has increased nearly $2.3 trillion since the height of the Great Recession in 2009 growing across most debt products to top $14 trillion in 2019. And while high debt often carries a negative connotation, the positive side is that the average FICO Scores of U.S. consumers have never been higher. The increased rate of debt taking in the United States and other countries in the world will drive the market for Debt collection Softwares across various industry verticals.
- A number of state officials and regulators have taken steps to decrease the economic burdens stemming from COVID-19 on consumers in their states, including by placing additional restrictions on debt collection practices. On March 26, 2020, Massachusetts Attorney General (AG) Maura Healey implemented, and filed with the Secretary of State's Office, an emergency regulation designed to curb debt collection in the commonwealth during the COVID-19 pandemic.
- Variations in enforcement procedures and order for payment procedures (for the duration of the emergency), also as significant negative economic effects (especially rising unemployment), may make it difficult or in some cases restrict the power to enforce claims. On the other hand, the Covid-19 crisis will increase the quantity of overdue loans and utility bills within the medium term, creating new business opportunities for debt collection softwares.
Key Market Trends
Increasing Automation in the Debt Collection Process to Drive the Growth
- Debt collection software offers various features like customer segmentation based on collection scenarios, automated customer reminders, email & letters, streamlined communication with clients, suitable payment plans, transaction management, commission management, compliance management, invoice management, payment, and others resulting in reduced human intervention and automation of redundant tasks. This has led to higher efficiency operations and a lowering of the excessive cost incurred due to these processes, thus increasing the market growth of debt collection software in the market.
- Cloud computing technology is becoming mainstream, and the seamless connectivity provided by the cloud is making it accessible and is also increasing the ease of sharing data and applications. According to the Right Scale's annual State of the Cloud Report 2019, 91% of businesses use public cloud, and 72% use a private one. Most enterprises use both options, with 69% of them opting for the hybrid cloud solution. Hence, the advent of cloud technology is also boosting the growth of the market.
- Though government regulations regarding data security are becoming stringent, Government policies and increasing investments in BI analytics tools are developing the market for spend analytics worldwide. Many global companies are collaborating with national governments to enhance spending and procurement processes with the use of spend analytics tools to deliver a practical solution in society.
- Legal notices no longer pose a threat to debtors, and growing rules & regulations have made the collection process even more complicated. Hence, many telecom and utility companies are using debt collecting software, taking the benefit of significantly increased online transactions. Companies have introduced a self-service payment platform to keep track of their customers, follow up on the bill payment, and help them maintain their credibility.
North America is Expected to Hold Significant Share
- High demand for commercial & consumer debt recovery services across the BFSI organizations is a significant factor expected to drive the growth of the financial institutions operating across the globe, thereby boosting the adoption of debt collection software in the region.
- Overall, delinquency rates are at record lows; consumers aren't only spending but are generally doing so responsibly. Additionally to responsible repayment, incomes within the U.S. are growing at a rate that's outpacing the expansion of debt. Consumers have a significantly lower debt-to-income (DTI) ratio now than they did at the top of the recession, sign growing wages are contributing to overall financial stability.
- This increased emphasis on the need for strategic debt recovery solutions coupled with the high adoption of analytical framework among players in this region is driving the growth of the market. Besides, the presence of several players operating in this region is a critical factor that propels the growth of the market. Moreover, the availability of well-developed network infrastructure in North American has increased the adoption of debt collection software, thereby fueling market growth.
The debt collection software market is fragmented, and the degree of fragmentation will accelerate during the forecast period as the various industries are experiencing a massive transformation, due to technological advancement, and the players are competing in providing the best solution.
- In May 2020, Chetu, a leading developer of custom software solutions, was today named the winner of a Silver Stevie Award in the Founding Team of the Year category for the 18th Annual American Business Awards. More than 3,600 nominations from organizations of all sizes and various industries were submitted for consideration in a wide range of categories.
- In April 2020, Financial technology leader FIS announced that FIS Ventures, the newly created corporate venture investment division of FIS, has launched an effort to invest a target of $150 million in promising fintech startups over the next three years with a focus on emerging technologies such as artificial intelligence and machine learning, digital enablement and automation, data and analytics, security and privacy, distributed ledger technology, and financial inclusion.
Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
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Table of Contents
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
- 4.1 Market Overview
- 4.2 Industry Value Chain Analysis
- 4.3 Industry Attractiveness - Porter's Five Forces Analysis
- 4.3.1 Bargaining Power of Suppliers
- 4.3.2 Bargaining Power of Consumers
- 4.3.3 Threat of New Entrants
- 4.3.4 Threat of Substitutes
- 4.3.5 Intensity of Competitive Rivalry
- 4.4 Market Drivers
- 4.4.1 Increasing Automation in the Debt Collection Process
- 4.4.2 Outsourcing Debt Recovery to Specialized Debt Collection Agencies
- 4.5 Market Restraints
- 4.5.1 Inadequacy of Legacy Systems
- 4.6 Assessment of Impact of Covid-19 on the Industry
5 MARKET SEGMENTATION
- 5.1 Deployment Type
- 5.1.1 On-Premise
- 5.1.2 Cloud
- 5.2 Organization Size
- 5.2.1 Large Enterprises
- 5.2.2 Small and Medium-Sized Enterprises
- 5.3 End User
- 5.3.1 Financial Institutions (Banks & NBFC)
- 5.3.2 Collection Agencies
- 5.3.3 Healthcare
- 5.3.4 Government
- 5.3.5 Telecom and Utilities
- 5.3.6 Others (Real Estate, and Retail)
- 5.4 Geography
- 5.4.1 North America
- 5.4.2 Europe
- 5.4.3 Asia Pacific
- 5.4.4 Latin America
- 5.4.5 Middle East and Africa
6 COMPETITIVE LANDSCAPE
- 6.1 Company Profiles
- 6.1.1 Fidelity National Information Services, Inc. (FIS)
- 6.1.2 CGI Inc.
- 6.1.3 Fair, Isaac and Company (FICO)
- 6.1.4 TransUnion
- 6.1.5 Pegasystems Inc.
- 6.1.6 Temenos AG
- 6.1.7 Intellect Design Arena
- 6.1.8 Nucleus Software Exports Ltd.
- 6.1.9 Chetu
- 6.1.10 AMEYO
- 6.1.11 EXUS
- 6.1.12 KuhleKT
7 INVESTMENT ANALYSIS
8 MARKET OPPORTUNITIES AND FUTURE TRENDS