Debt Management Strategies from Wescot Credit Services

As CEO of Wescot Credit Services Paul Jenkins has a wealth of knowledge and expertise relating to the debt collection market in the UK.  In response to a recent request for his thoughts on how banks specifically could manage debt more effectively moving forwards, he was able to identify some strong strategic paths that could help.  

Most banks have, over the years, acquired a variety of high-risk assets.  As part of a general portfolio in more stable times these assets have been valuable.  In today's economy too many of these assets represents an unacceptably high level of risk.  Disposing of some is a strategy that not only removes a degree of the risk from the banks, but also releases much needed capital back onto the balance sheet.  This is a responsible approach that will also do much to elevate the banks in the eyes of the regulators.

Wescot knows that compliance has become a key element of any bank strategy since the collapse.  Regulators and legislators are just looking for reasons the clamp down hard on risky behaviour.  One of the best ways for banks to alleviate this pressure is to actively demonstrate an awareness of and dedication to the principles of TCF, or Treating Customers Fairly. 

If banks can flow these principles into their debt sale, collection and recovery processes the benefits will be two-fold.  First, the regulators will be satisfied, and second, a focus on good procedural practice will deliver better all-round results to the bank.  This should apply not only to internal policies, but also up and down the supply chain.  Any organisation involved in assisting the banks in their debt management should as a default embrace TCF principles at their core.

Finally, the wholesale adoption of the requirements of Basel III by banks will do much to engender confidence in the ability of the banking sector to respond to criticism in a positive manner.  To protect their assets from future fluctuations in the sovereign debt markets, banks need to ensure that their equity and capital levels remain healthy.  Disposal of high-risk assets and more effective, customer-focused debt management are key enablers of this strategy.

Wescot have over 40 years of experience in debt collection, and their own strategic approach to risk management allowed them to weather the storms of the last 5 years relatively unscathed.  Banks seeking to re-establish confidence and protect their future positions may be wise to consider these suggestions for risk management put forward by one who knows.