In the era of digital transformation, collection management has become a strategic pillar for banks and fintechs alike. The rise of open banking, embedded finance, and real-time payments is reshaping customer expectations – demanding not only operational efficiency but also hyper-personalized, empathetic engagement with clients who face financial difficulties. At the same time, pressure from regulators, economic volatility, and the proliferation of new digital channels are forcing financial institutions to rethink traditional debt recovery models.
Against this backdrop, a leading French bank partnered with SBS and IBM to transform its collection management strategies. By harnessing the power of artificial intelligence and the robust IBM Z mainframe, the bank is pioneering a new approach–one that combines data-driven insights, automation, and secure, on-premises infrastructure to deliver tailored, effective, and compliant collection journeys.
The Challenge: Modernizing Debt Collection
With economic uncertainty and a surge in corporate defaults, the bank’s collection teams needed to become more agile, responsive, and effective. Traditional “one-size-fits-all” approaches were no longer sufficient. The goal: to leverage the bank’s rich historical data and advanced analytics to deliver the right action, at the right time, for each customer—while ensuring compliance, data privacy, and operational resilience.
The Proposed Approach: AI-Driven Collection on IBM Z
Working closely together, SBS, IBM and the bank defined a conceptual AI-powered solution for Collection running natively on the IBM Z mainframe. This approach enabled:
- Customer Segmentation & Personalization: Machine learning models analyze years of historical data to identify customer clusters and recommend tailored collection strategies. For example, some customers respond best to email, others to mobile notifications—AI helps determine the optimal channel and timing for each case.
- Automation & Efficiency: AI automates time-consuming tasks such as extracting information from legal documents and proposing repayment plans, freeing up staff to focus on complex cases.
- Data Privacy & Compliance: By running AI models directly on the bank’s on-premises IBM Z infrastructure, sensitive data never leaves the secure environment. This ensures compliance with European regulations (GDPR, DORA) and maintains full data ownership.
Why IBM Z Mainframe?
IBM Z is the backbone of mission-critical banking operations for leading financial institutions. Its unique advantages include:
- Performance: Real-time AI inferences and model training occur where the data resides, delivering high throughput without impacting service levels.
- Security & Resilience: Built-in security features and continuous compliance monitoring protect against cyber threats and ensure regulatory alignment.
- Sustainability: The latest IBM Z systems (z17) reduce power consumption by up to 83% compared to traditional x86 servers, supporting the bank’s sustainability goals.
The expected outcomes: Tangible Business Impact
By embracing AI on IBM Z, the bank anticipates significant benefits from this innovative approach:
- Improved recovery rates and cut operational costs: AI-driven segmentation is expected to boost recovery by up to 10% and cut costs by around 40%, based on industry benchmarks and initial test results.
- Enhanced customer satisfaction, with personalized outreach helping customers resolve issues faster and more easily.
- Future-ready infrastructure: The IBM Z mainframe positions the bank to rapidly deploy new AI use cases as business needs evolve.
A Partnership for the Future
This collaboration between SBS, IBM, and the bank demonstrates the power of combining deep banking expertise, cutting-edge AI, and robust mainframe technology. Together, we are setting a new standard for collection management—one that is efficient, secure, and truly customer-centric, while remaining adaptive to the evolving challenges of debt recovery in the digital age.
By leveraging advanced analytics and automation, this partnership is paving the way for smarter, more personalized collection strategies that respect both regulatory requirements and customer needs. The result is a collection management approach that maximizes recovery rates, reduces operational costs, and enhances the overall customer experience – positioning the bank at the forefront of innovation in the collections space.