As the head of the post loan management department for the retail business of a city commercial bank, Wu Yang received a new task at the end of July this year - to reduce the non-performing loan ratio to the level of the end of last year by 0.2 percentage points to 1.85% before the end of the year.

He admitted that the difficulty of completing the task is very high. For example, for individual loan customers who are overdue for more than 6 months (M6+), the traditional phone collection rate is less than 15%, and over 85% of borrowers are in a "lost contact" or "refused contact" state. Even if the post loan management department cooperates with retail customer managers to come and collect, they still face the dilemma of "not being able to find someone".

According to the latest internal statistics obtained by Wu Yang from the bank, among personal loan customers who are overdue for more than 6 months, more than half of the borrowers either provided incomplete addresses to the bank or have already moved away from their previously filled addresses, resulting in empty spaces for post loan management personnel to come and collect payments; Among personal loan customers who are overdue for more than one month (M1+), this proportion also exceeds 20%.

Wu Yang is worried that once there is no one to find for home collection, the related overdue loans will eventually evolve into personal loan non-performing loans, leading to an increase in the non-performing loan rate of retail loans instead of a decrease. Therefore, the ability to find a valid address for overdue borrowers and complete door-to-door collection of payments has become particularly crucial in reducing the non-performing loan ratio of retail loans in banks.

Xie Cheng has been the head of the debt collection department at a joint-stock bank for over 6 years, and he has also received job requirements to reduce the non-performing loan ratio. However, in the case where telephone collection is not very effective and door-to-door collection is "unable to find someone", he also worries that this task will be difficult to complete.

In the low interest rate differential cycle, banks find it difficult to continuously rely on profits to write off retail non-performing loans, and instead increase their collection efforts. So, a debt collection "finding people" campaign is underway.

Can't find someone

In the first half of the year, the non-performing retail loan ratio of the city commercial bank where Wuyang is located exceeded 2%, an increase of over 18 basis points from the beginning of the year. In this regard, the senior management of the bank has requested that the non-performing loan ratio of retail loans must be reduced before the end of the year.

The senior management of the bank specifically held a meeting with me to emphasize that reducing credit card installment payments and personal business loan delinquency rates is the key to completing this task, "said Wu Yang. As of the end of July, the credit card and personal business loan overdue rates of this city commercial bank exceeded 5% and 3.5% respectively. If the collection and repayment efforts are not increased, once the related overdue loans turn into bad debts, it will push up the retail loan non-performing rate by about 20 basis points.

Many overdue borrowers have a certain willingness or ability to repay, but currently we are unable to effectively reach them, resulting in low collection efficiency, "said Wu Yang. Since the end of July, the city commercial bank where he works has achieved a collection rate (the proportion of collection amount corresponding to overdue amount) of less than 30% through telephone or door-to-door collection, which cannot achieve the goal of reducing the non-performing loan rate.

The reason for this is that overdue borrowers face bank phone calls for debt collection, either not returning calls or changing their phone numbers, making it difficult for the bank to find them; So, the bank turned to hoping to collect payments through the residential address previously provided by the overdue borrower to the bank. After all, past collection practices have shown that the collection rate of door-to-door collection is more than 20 percentage points higher than that of telephone collection.

What Wu Yang did not expect was that due to the incomplete residential address provided by the overdue borrower to the bank, or the fact that some addresses had already been found to be missing, the effect of the bank's door-to-door collection was also unsatisfactory.

In late August, Wu Yang learned through internal investigation that the proportion of overdue borrowers who went missing reached about 25%.

The senior management of Wu Yang's bank believes that there are obvious omissions in the post loan management department's timely tracking and grasp of the borrower's latest residential address, and demands that effective solutions be quickly put forward.

Wu Yang did not deny this. He admitted that in general, banks require borrowers to provide their residential or business address when applying for loans. The post loan management department of the bank may not verify whether the address information is complete one by one. During the loan term, as long as the borrower repays on time, the bank's post loan management department is unlikely to proactively inquire whether the borrower has changed their residential address or request the borrower to provide the latest residential address.

Since September, Wu Yang has sought solutions from colleagues in the post loan management departments of multiple banks, but they also commonly suffer from the problem of "not being able to find someone" for door-to-door collection.

Meanwhile, Wu Yang also sought help from multiple data technology companies. In early September, two data technology companies stated that banks only need to pay relevant service fees, and they can purchase the latest residential addresses of overdue borrowers through third-party channels. However, the compliance department of the city commercial bank where Wu Yang is located believes that this move is suspected of illegally obtaining residents' address information and firmly disagrees with the relevant cooperation.

Find Address Business

It's difficult to find someone for bank collection, but it's actually fueling an unknown business of finding addresses.

Yu Hongbo, founder of Wuhan Zhipintang Technology Co., Ltd. (hereinafter referred to as "Zhipintang Technology"), told reporters that in August, more than 10 new bank customers were requested to assist in supplementing the address information of overdue borrowers and screening their valid addresses (current residential addresses). The above-mentioned business volume reached about 300000, an increase of more than 40% from the end of July.

Zhipintang Technology was founded in 2012 and is a provider of address finding technology and address data solutions.

Some banks directly provide a list of borrowers who are only 15 days overdue and their relevant addresses, requesting our assistance in finding the borrower's valid address and completing their address information so that the bank can come to collect payment as soon as possible, "said Yu Hongbo.

Yu Hongbo said that most banks will put forward three major requirements: first, authenticity verification, which assists banks in confirming the completeness and objective existence of the address information provided by borrowers, and maximizes the avoidance of borrowers fabricating their residential addresses to obtain loans; The second is stability consideration, which involves assisting the bank in confirming whether the borrower continues to reside at the address provided to the bank; The third is correlation assessment, which refers to whether the borrower can assist the bank in finding a valid address when providing multiple addresses to the bank, reducing the workload and related operational costs of on-site collection by the bank.

It's not easy to achieve these three demands of the bank, "said Yu Hongbo. The main reason why the address provided by the borrower to the bank is incomplete is that the address they filled in is quite colloquial, and abbreviation errors are extremely common. For example, only the building number and community abbreviation are filled in, but the abbreviation can correspond to multiple residential communities, making it difficult for the bank to correctly identify the borrower's specific address.

Yu Hongbo stated that the borrower's address information is provided by the bank. The work of Zhipintang Technology mainly utilizes its self-developed address standardization and address selection AI (artificial intelligence) large model, which can correct and complete the borrower's address information, as well as find valid addresses among multiple addresses. ”At present, Zhipintang Technology is cooperating with China Post to deliver collection legal letters based on the overdue borrower's residential address provided by the bank, and analyze the delivery results (signing, collection, and return) to accurately determine the borrower's valid address. Normally, if the delivery result shows that the borrower has signed for it, they can confirm the valid address of the overdue borrower and provide timely feedback to the bank.

During this process, some overdue borrowers will proactively call to request a change of delivery address after seeing the legal letter delivery SMS for debt collection. This way, Zhipintang Technology can also understand the borrower's latest address and inform the bank in a compliant manner.

Since September, Wu Yang has contacted two map open platform service providers, who have stated that they have ways to assist banks in finding the valid addresses of missing overdue borrowers. Wu Yang is more concerned about the compliance of the latter's business operations. For this reason, he has repeatedly inquired about how to obtain the overdue borrower's delivery and e-commerce shopping address data through compliant means by providing multiple residential addresses to the bank, and accurately find the borrower's valid address.

For this issue, these two map open platform service providers have not been able to provide a reassuring answer for Wu Yang.

In Yu Hongbo's view, the key to the success of this business lies in the compliance ability of various address finding technical service providers. He stated that all data sources of Zhipintang Technology are legal and compliant. In 2024, Zhipintang Technology has passed the filing review and become a certified data provider on the Shenzhen Data Exchange.

Personal loan non-performing loans under pressure

Banks are urgently searching for the valid addresses of overdue borrowers who have gone missing, and they have another plan - hoping to provide more valid addresses of overdue borrowers during the transfer of non-performing asset packages for personal loans, in order to increase the transfer price.

According to a research report by Zhongtai Securities, the non-performing loan ratio of retail loans in the banking industry increased by 16 basis points to 1.52% in the first half of this year compared to the beginning of the year; The retail non-performing balance increased by about 11.5% compared to the beginning of the year, and the non-performing rates of mortgage, credit card, consumer loan, and business loan increased by 11 basis points, 27 basis points, 22 basis points, and 8 basis points respectively, indicating that retail credit risks are still exposed.

Xu Mingjie, Vice President and Chief Risk Officer of China Merchants Bank, bluntly stated at the bank's first half performance conference that retail loan risks are still on the rise. As of the end of June, the non-performing loan ratio of China Merchants Bank's retail loans was 1.16%, an increase of 0.1 percentage points from the beginning of the year.

Yao Hong, Vice President and Chief Risk Officer of Postal Savings Bank of China, also stated that due to the high proportion of retail business and external environmental influences, the bank's asset quality is facing certain structural downward pressure.

In order to alleviate the pressure of rising non-performing loan rates in retail loans, banks have increased their efforts to transfer non-performing personal loans.

According to the statistics of non-performing loan transfer business disclosed by Yindeng Center, in the second quarter of this year, the total number of projects listed in the announcement of non-performing loan transfer business exceeded 500, involving outstanding loan principal and interest of over 100 billion yuan, a year-on-year increase of 14.6%.

Among them, over 80% of the listed projects belong to the transfer of non-performing assets in personal loans. However, its average transfer price is less than 2% of the outstanding loan principal and interest amount. Behind this, asset management companies (AMCs), the purchasers of non-performing asset packages for personal loans, are concerned that the vast majority of overdue borrowers cannot be found and cannot recover the relevant outstanding loan principal and interest, and can only lower the transfer price of non-performing asset packages for personal loans.

On the contrary, if banks have the ability to provide valid addresses for some overdue borrowers, asset management companies may sense a certain probability of increasing the amount of repayment through door-to-door collection, which will raise the transfer price of non-performing asset packages for personal loans, "Xie Cheng told reporters.

Xie Cheng's bank is looking for buyers for a package of non-performing personal loan assets worth 1 billion yuan. With the assistance of a technical service provider, 15% of the overdue borrowers' valid addresses in the above-mentioned asset package were found, attracting multiple AMCs to come and quote. Currently, the proposed transfer price is more than twice as high as the bank's initial expectations.

The senior management of Xie Cheng's bank has agreed that the funds from the transfer of non-performing personal loan assets will be used to write off non-performing personal loans, further reducing the bank's non-performing personal loan ratio.

(Author Chen Zhi)