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CREDIT DEFENCE: THE DAY AFTER

The credit industry is undergoing important changes either in the private sector, especially in the banking and financial one, or in the public administration.

In the first one, it’s occurring a real market revolution: companies ‘integrations, closings and merges are taking place within and between banks.

Not to mention sales, not only of huge NPLs portfolios but also of entire banks branches.

It does suffice to compare the present member lists of some Italian associations such as ABI, ASSOFIN and ASSILEA to the ones of 5 years ago, to realize the importance of the undergoing transformations.

By the way, these changes represent a very little if compared to the revolution we are facing thanks to the advance of modern technologies.

Financial technology, also known as FinTech, a line of business based on using software to provide financial services promises even more momentous transformations, challenging the traditional business models.

Bitcoin, blockchain, crowdfunding, robo advisor, P2P lending, alternative finance are not only terms improving the financial services vocabulary but they bring along with them new finance models and new actors, even not closely linked to the banking world.

Limiting the frame to the debt collection industry, for example, some envisage the end of the era of large call centres, mostly located abroad, which would be replaced by digital reminders via Whatsapp, SMS text messages and emails which in real time and at almost costless enable to plan compelling reminders and allow clients to make fast and secure payments on line in one click.

The reform of the rules regulating the judicial debt collection, strongly recommended by investors and banks to facilitate the dismissal of Npls, if, as promised, will speed up this process at the same time risks to seriously undermine the extrajudicial debt recovery.

Yet, in countries such as Switzerland debt collection companies rarely engage themselves in activities such as the phone collection (not to mention personal visits which are not so common abroad) as they are considered too expensive and a waste of time if compared to faster judicial debt recovery.

Last but not least regarding the public administration, the accounting reform is adopting a cash based approach rather than a competency based approach, pushing(finally) local authorities to earmark their expenses commitments to the amount of money cashed and as a consequence they now pay a strong  attention to their debt recovery activities.

This, together with some recent judgements passed by the Regional Administrative Courts (T.A.R.) of Puglia and Lazio stating debt collection agencies can provide local authorities with support in managing their revenue collection activities, either tax related or not tax related, even without entering the ministerial register, as long as they do not deal with public money, does undermine classical debt collection processes and open new scenarios until now totally unknown.

In this fast changing world, the speakers of the 10th Credit Village Day will clarify and explain to actors operating in this industry (which only in the private sector manage 45 million of accounts, recovering almost €10 billion) which are the threatens and the new opportunities that could come out from these changes.