Identifying and utilising best practices

The Aktiv Kapital Group is the result of organic growth as well as company acquisitions. The large volumes of current and historical data and operational experiences give us a unique possibility to sort the debtors that are likely to fulfil their obligation from the ones who don’t. This information is a valuable asset in forming current and future collection strategies.

Most of the loans managed by Aktiv Kapital are non-performing and have already been handled by the originating bank or other creditor before we take over – often after a write-off. We work to locate the customer and obtain an immediate settlement or arrange a payment plan based on their ability. We know that debtors behave differently and our expertise lies in analysing these findings in order to find a pattern in behaviour, for example:

• The probability that a no-payer starts paying and a payer stops paying
• The probability of future payments: the percentage of regular payers that miss one payment, two payments, or more, and how often the average payer misses a payment

That work may yield different results in different countries. If we look at some basic figures, the average single payment by a customer ranges from €42 to €297 (2007 averages) in our different markets. In one country paying customers settle on average 38% of their loan in year; in another the same figure is 3%. In a third country 61% of the customers make regular payments on an amortisation plan; in yet another that figure used to be 10% (now increased to 14%). These differences and our experiences in utilising them have shown us great value in exchanging best practices across borders.

Our approach
Vital to the improvement of our collection efforts is the sharing of best practises between operations, and for that purpose Aktiv Kapital is building a global infrastructure to support the operations and communication within the Group.

Basic in that effort is the harmonisation of collection systems – from 14 systems in different stages of development to full-blown applications for each of North America, UK and Continental Europe, each of them supporting large scale industrialised collections as well as individual handling of claims. Identifying and utilising best practices in Aktiv Kapital is a systematic activity:

• Data from the business units is collected and analysed in the central data warehouse
• Scoring of individual loans and customers is fed back to the collection systems
• Management information and analyses results are published via the Group’s global intranet in order to create effective and transparent steering mechanisms
• Teams of experts from different business units set standards for reporting and benchmarking
• The intranet provides a tool for communication of collection strategies and other best practices

As we grow, organically and by acquisitions, our best practices will be put to use – and adopted from – our new subsidiaries.