How established banks compete with digital-first rivals - Turning collections into customer retention

Asia’s digital banking market is growing quickly, but it’s still far from mature. Transaction value from digital only banks in Asia is projected to reach about €1.14 trillion by 2028, yet penetration remains relatively low compared with the region’s addressable market. This leaves significant room for established institutions to shape what best in class digital banking looks like.​

For incumbent banks, especially in hubs such as Singapore, the core question isn’t whether to build digital capabilities, but how to do so in ways that make use of existing scale, risk expertise, and regulatory strength. Collections is one of the few areas where those strengths intersect directly with real time customer outcomes, and it’s increasingly a space where incumbents can differentiate against digital first rivals.​ Here’s how.

Why collections is a top priority on the executive agenda

The credit environment across Asia is becoming more complex. Higher borrowing costs, uneven economic recovery, and persistent cost of living pressures are creating pockets of stress among consumers and small businesses. In Singapore, for example, rollover credit card balances reached record levels in late 2024, with mortgage and vehicle loan delinquencies closely monitored by banks and regulators.​

In this context, every collections interaction becomes a moment of truth. Customers who fall behind on payments are navigating both financial strain and emotional pressure, and their experience of collections can significantly influence whether they stay loyal or look elsewhere. Research across industries shows that acquiring a new customer typically costs several times more than retaining an existing one, and even modest improvements in retention can have an outsized impact on profitability.​

Historically, collections has often been treated as a back office function, measured mainly on recovery rates and unit costs. Today, forward looking institutions recognize that collections touches vulnerable customers, shapes perceptions of fairness, and feeds directly into lifetime value and brand reputation, which is why it’s increasingly on the agenda for senior executives and boards.​

From reactive to intelligent collections

In many banks, legacy collections models remain reactive and fragmented. Workflows are paper heavy, siloed by product or geography, and limited in the way they share data across risk, operations, and customer teams. This often leads to inconsistent treatment, slower cycle times, and experiences that feel disconnected from the bank’s broader digital offerings.​

Next generation collections looks very different. It’s proactive, digital first, and insight led across the full lifecycle, from early warning and pre delinquency outreach through to late stage recovery. It’s built on timely data, configurable workflows, and a clear view of the customer relationship, not just the overdue balance.​

For established banks, four capabilities stand out as essential building blocks for this shift:

• Automation that scales good decisions
• Digital first, omnichannel engagement
• AI native, data driven humanization
• Augmentation of human collectors instead of replacement

Each of these capabilities supports both risk performance and customer retention when designed and governed well.​

Automation that scales good decisions

Automation is now a foundation of modern collections. Routine, rules based tasks including payment reminders, broken promise follow ups, standard restructuring offers within policy, and post interaction documentation are all candidates for automation.​

Automating these activities reduces manual workload, helps ensure consistent execution, and shortens response times so customers receive timely outreach. In practice, this means fewer missed contacts, more accurate application of policy, and more time for experienced collectors to focus on complex or high value cases rather than repetitive tasks.​

Automation also changes how strategy is implemented. With configurable workflow engines, risk, product, and operations teams can encode policy logic centrally and update treatments at speed across portfolios and markets. When regulations change or the bank adjusts its risk appetite, these changes are reflected in contact rules, hardship paths, or escalation thresholds through configuration rather than lengthy one off development work.​

Digital first, omnichannel engagement

Customers in ASEAN are mobile first and highly active across digital channels, using their phones for payments, shopping, communication, and everyday banking. They increasingly expect their bank to communicate in the same way in collections as it does in other parts of the relationship, with clarity, convenience, and control.​

A digital first, omnichannel approach to collections means orchestrating outreach and self service journeys across SMS, email, mobile apps, secure web portals, and voice, with a consistent tone and clear next steps. A customer might receive a gentle reminder through a preferred channel, authenticate via a secure link, view options in a digital interface, and set up a payment arrangement in minutes without waiting for a call.​

Done well, omnichannel collections helps customers respond on their own terms, at times that fit their lives, which can improve responsiveness and recovery while preserving dignity. It also helps reduce reliance on outbound calling, which is costly, harder to scale, and often unpopular with customers.​

AI native, data driven humanization

AI and analytics are reshaping how leading banks think about collections. Instead of treating all overdue accounts in the same way, AI native approaches use a richer set of data to segment customers and tailor actions.​

Machine learning models can analyze transaction patterns, historical payment behavior, engagement history, and other signals to predict who’s likely to self cure, who needs early support, and which treatment path is most suitable. These insights are used to prioritize worklists, choose the best channel and timing for outreach, and recommend offers such as short term arrangements or more structured support.​

This data driven approach enables a more human experience at scale. Customers with a high propensity to cure can move through low friction digital journeys that respect their time and privacy, while those showing signs of persistent distress can be identified early and offered proactive assistance.​

Augmenting, not replacing, human agents

Even with advanced digital journeys and AI, human collectors remain central to effective collections, particularly in complex or emotionally charged situations. Many customers want to speak with someone they trust when discussing major life events, long term difficulty, or bespoke solutions.​

The opportunity is to augment collections teams with better information and tools, rather than trying to replace them. When collectors have access to a single, consolidated view of the customer that includes account history, previous interactions, and relevant policies, they can focus on listening and problem solving instead of navigating multiple systems.​

Decision support can help by suggesting suitable options, highlighting important risk or vulnerability flags, and guiding collectors toward language that balances humanity with clarity. After the conversation, automated summaries and workflows can capture commitments, trigger follow ups, and update the right systems, reducing operational risk and freeing agents to move on to the next customer.​

Configurability and collections compliance across ASEAN

ASEAN banks often operate across multiple jurisdictions, each with its own regulatory framework, language, and customer expectations. A regional or group level strategy for collections must therefore be adaptable enough to reflect local rules while still providing a unified view of performance and risk.​

Configurability is key in this context. When workflows, treatment paths, and segmentation logic can be adjusted through configuration rather than code, business and risk teams can tailor collections strategies to each market while maintaining shared principles and oversight. For example, contact frequency limits, channel preferences, or eligibility for specific hardship options may differ between countries, but the way those rules are governed can remain consistent.​

Robust audit trails, consent management, and secure data practices are also key. As data protection and consumer fairness regulations evolve, the ability to demonstrate what decisions were taken, which data was used, and how customers were treated becomes a core part of both regulatory relationships and internal risk management.​

Turn collections into a customer retention engine with C&R Software

Established banks worldwide are reframing collections as a driver of customer loyalty and long term value. By combining intelligent automation, omnichannel engagement, AI driven insight, and strong governance, collections becomes one of the clearest proofs of a bank’s commitment to financial resilience and better outcomes for customers.

At C&R Software, this philosophy underpins the design of our collections solutions. Trusted by 5 of the UK’s top 10 banks, 7 of the US’s top 15 banks, and leading digital banks across ASEAN, Debt Manager uses advanced analytics to turn data into actionable insight so teams can continuously refine treatment strategies, improve recovery, and support customers more effectively. Its configurable, cloud native environment gives established banks a practical way to bring a modern, customer focused collections strategy to life in day to day operations, at scale and with control.

To learn more about how Debt Manager helps incumbent banks compete and win against digital first challengers, get in touch at inquiries@crsoftware.com.