Debt Collection Software Market: Information by Organization Size (Large Enterprise, SMEs), End-User (Financial Institutions, Collection Agencies), and Region — Forecast till 2029

Market Introduction

Debt collection software streamlines the collection processes and improves operational efficiency by ensuring greater coverage. An intelligent debt collector solution efficiently delivers higher Promise-to-Pay (PTP) rates. Automating daily operational tasks minimizes the time spent on unproductive tasks and ensures the utmost productivity. Debt collection software offers a wide range of services such as the elimination of clerical tasks, increases profitability and effectiveness, prioritizes important customers, and speeds up the collection process.

 The global debt collection software market was valued at USD 3.1 billion in 2019 and is anticipated to reach USD 5.2 billion by 2029 with a CAGR of 10.1%.

Need for Self-Service Payment Models

Adoption of self-service payments solution helps industries to improve their transaction efficiency, enhance customer experience, and create new business opportunities. Self-service solutions also aids businesses to achieve their goals and prepare for the future by enabling secure acceptance for all payment methods, including Europay MasterCard (EMV), Magstripe, and Near Filed Communiation (NFC), eliminating the need of a cashier or attendant.  In 2016, KISOK Information Systems, a global leader in self-service solutions, launched a business model for direct bill payment. The system enables the automation of all forms of payment services to unbanked or under-banked clients, while eliminating costly personal payment processing.  

Debt Collection Software Market: Segmentation

Services Segment to Grow With the Highest CAGR

Based on the component, the debt collection software market is bifurcated into software and services. The debt collection services segment is projected to grow with the highest CAGR during the forecast period. The services segment offers assistance to the client for the deployment of software. The services also identify problems, strategy, & implementation to cater to business-specific needs. The services allow businesses to bridge legacy systems to modern applications. They also take care of training and implementation work so that the client can focus on their core business. In 2017, Alfa bank adopted Pegasystems debt collection services to increase debt recovery.  

Cloud Segment to Register A Considerable Growth In The Market

Based on deployment, the debt collection software is bifurcated into the cloud and on-premise. The cloud segment is projected to witness considerable growth compared to the on-premise segment. The cloud debt collection software is cost-effective, simple to use, reliable, fast, and dynamic, thereby gaining traction across SMEs and large enterprises. Furthermore, the software eliminates the requirement of hardware or internal network. Some of the players offering cloud debt collection solutions are Indigo cloud Limited, Pegasystems, FICO, and FIS, among others.

Large Enterprise Segment to Hold the Largest Market Share

The large enterprise segment holds the largest market share. The growth can be attributed to the high budget of large enterprises that enables them to benefit from debt collection solutions. Moreover, the need for multichannel communication to reach debtors and improve the collection process through automation drives the segment growth. In 2017, First Financial Asset Management Inc. (FFAM), a U.S. based accounts receivable management company, implemented Experian’s ‘Collection Triggers’ to monitor more than 1.14 million collection accounts placed by a specific group of customers. The debt collection solution enables FFAM to increase collection by USD 3.5 million within two years.

SMEs to be the Fastest-Growing Segment

The SMEs segment is anticipated to be the fastest-growing segment on account of technological advancements in cloud infrastructure that enables SMEs to benefit from debt collection solutions within budget constraints. The small business owners are inclined to manage services offered by debt recovery software that allows them to oversee overall business processes and safeguard their transaction processes. The following figure shows the increase in the adoption of cloud computing services globally, from 2017-2020.

Financial Institution to be the Fastest-Growing End-User Segment

Based on end-users, the debt collection software market has been segmented into financial institutions, collection agencies, healthcare, government, and telecom & utilities. The financial institution segment is projected to grow at the fastest rate due to the increasing demand for self-service payment solutions among BFSI sectors.  Self-service payment helps to organize the daily work of collectors and reduces the time spent on administrative and unproductive tasks, further propelling the segment growth. In 2016, a Russian Corporate and Retail Bank implemented Luxsoft debt collection software to mitigate the risks of losses associated with outstanding debt. Also, through this implementation, the bank aimed to standardize and streamline the collections workflow and automate monitoring of the status of unpaid debt.  

Telecom and Utilities Segment to Grow at the Highest CAGR

The telecom and utility segment is projected to grow at the highest CAGR on account of ease in managing subscriber base. Also, the telecom and utility sector is moving forward and adopting the latest trends and technologies. Moreover, growing rules and regulations have made the debt collection process even more complex. Thus, to mitigate such issues, many telecom and utility enterprises are using mobile technologies and have introduced a self-service payment platform to keep an eye on their customers, follow up on bill payments, and help maintain their credibility. In 2017, AIRTEL implemented credit management and revenue collection product to manage the risk associated with debt collection of their subscribers. By implementing the debt collection solution, the company has increased its overall debt collection efficiency.

Impact of COVID-19

The COVID-19 outbreak has severely affected almost all industrial sectors. The temporarily halt of business operations to support social distancing is hampering the market growth. This has resulted in the reduction of cash flow among SMEs, diminishing liquidity funds among private banks, and halt in debt collection operations among financial institutions and telecom and utilities. However, many financial institutions continue to collect debt electronically. Still, the overall market growth of debt collection software is expected to decelerate on account of the halt in business operations and delay in software up-gradation.

Regional Overview

North America’s Debt Collection Software Market Bolstered by the Presence of Leading Players

North America holds the largest market share on account of the early adoption of advanced technologies and cloud platforms. The U.S. and Canada are at the forefront of the debt collection software market. The region has the presence of key industry players offering debt collection software. Their financial position enables them to invest heavily in advanced technologies and tools to manage business operations. In 2017, Empowering Ultimus, a comprehensive mutual fund and investment advisor in the U.S., implemented the FIS debt collection solution to manage daily fund processing.   

Asia-Pacific: Home to the Largest SMEs

In Asia-Pacific, increasing demand for technologically driven debt recovery software across large enterprises and government agencies drives the debt collection software market. Also, technological advancement in cloud computing drives the adoption of debt collection software in the region's SMEs. In 2018, Motilal Oswal (MOSL), a leading financial services firm in India, implemented AMEYO debt collection software to improve customer relationship management to foster a direct and seamless relationship between customers and advisors. The company has improved its operational efficiency by over 15% in the entire process.

Key Players

• FIS (the U.S.)
• FICO (the U.S.)
• Experian (Ireland)
• CGI (Canada)
• TransUnion (the U.S.)
• Pegasystems (the U.S.)
• Temenos (Switzerland)
• Intellect Design Arena (India)
• Nucleus Software (India)
• Chetu (the U.S.)
• AMEYO (India)
• Loxon Solutions(Hungary)
• EXUS (the U.K.)
• Kuhlekt (Australia)
• Katabat (the U.S.)

Debt Collection Software Market Segmentation

By Component

• Software
• Services

By Deployment

• Cloud
• On-premise

By Organization Size

• Large enterprise
• SMEs

By End-User

• Financial institutions
• Collection agencies
• Healthcare
• Government
• Telecom & utilities

By Region

North America

• The U.S.
• Canada
• Mexico

Europe

• The U.K.
• Italy
• France
• Spain
• Germany
• The Rest of Europe

Asia-Pacific

• India
• China
• Japan
• Australia
• South Korea
• The Rest of Asia-Pacific

The Middle East and Africa (MEA)

• Saudi Arabia
• Egypt
• South Africa
• The Rest of MEA

South America

• Columbia
• Brazil
• Chile
• Peru
• Argentina
• The Rest of South America