ALFAM Consumer Credit from Bunnik describes itself as a “specialist in responsible lending” and as “the leading player” in the market for consumer credit. But the subsidiary of ABN AMRO has higher ambitions – not only does ALFAM want to be the best, but it also wants to become undisputed market leader. In its quest for continuous improvement, the lender makes use of the services of Performance Management (Cwize).

ALFAM is one of the largest lenders to private individuals in the Netherlands. Nevertheless, the organisation from Bunnik, which employs 140 people, is barely known to the wider public. That’s not true of the three successful labels that provide loans: Alpha Credit Nederland (specialist in vehicle financing based on financial leases), DEFAM (loans to private individuals) and GreenLoans (green loans for homeowners).

Self-sufficient subsidiary

ALFAM was founded in 1981 by the PON group. After having been part of VSB and subsequently Fortis, it has now been a full subsidiary of ABN AMRO for over ten years. “A self-sufficient subsidiary, however,” says CFO Henk Wijnberger from ALFAM. “We’re an ‘end-to-end’ company and assume responsibility for our credit underwriting policy and our financial results. Despite various parent companies through the years, we’ve managed to maintain our identity. Mainly by sticking to our guns. By thinking in the long term, rather than going for short-term benefits. That’s reflected in our growth figures and the appreciation we’ve received from our distribution partners and the relationships we have with them. But it’s also reflected in our low staff turnover. People are happy working here.”

A culture of cooperation

Tessa Scheick, head of Client Management at ALFAM, agrees with her colleague’s words. “Two features stand out in my opinion. First, the fact that the business of providing sustainable loans is in our genes, in our DNA. There’s a reason why we call ourselves ‘a specialist in responsible lending’. That’s not an advertising slogan, it’s reality. And we’re also receiving recognition for this from the outside world, such as the AFM. Second, our corporate culture is highly focused on cooperation. We have extremely short lines of communication: everyone is approachable, we’re all free to walk into someone else’s office. From left to right and top to bottom.”

Strict standards

ALFAM wants to distinguish itself in the market as a specialist in responsible lending. The company is achieving this by using standards for its credit underwriting policy that are stricter in some areas than prescribed by law. Indeed, one of the account managers’ important tasks is to include the distribution partners in this process, such as car dealers, credit intermediaries and insurance brokers. “After all, it all starts right here at our doorstep,” Henk Wijnberger explains. “Our account managers support our partners in that respect. On the one hand, by explaining why sustainable lending is so important, and on the other hand, by considering how we can build the best possible partnership. We always take the entire chain into account. We’re constantly working on improving cooperation. As a result, we want to ensure that our processes are always in good order. After all, our partners have to be able to provide clients with a loan that suits their financial situation as easily, quickly and efficiently as possible.”

Motivational debt recovery

The twenty staff members in Tessa Scheick’s Client Management department are responsible for the group of clients that are having payment difficulties. Tessa joined ALFAM in 2014 and was recruited to Client Management, where she could use her marketing background to better anchor loan provision, including for clients who are in financial difficulty or at risk of finding themselves in financial difficulty. This led to a reorganisation of the department in 2017. “First we held a training activity for staff members on motivational debt recovery,” Tessa says. “They learned which approach to use to engage in constructive discussions with clients and address them about their responsibility to solve the problem at hand. As a result, clients are more frequently prepared at an earlier stage to make and stick to suitable agreements. Our strategy focuses on signalling clients who are unable or unwilling to honour their commitments as early as possible. We work in three teams. The first team focuses on clients with short-term arrears. After missing a payment for one month, they already take action. If it’s an incident, then ALFAM helps the client find a solution. If the employee identifies a structural problem, then a personal representative from the second team will be deployed. This or her aim is to come up with a suitable agreement that will permanently solve the problem. This is tailor-made work driven by the question: ‘How are we going to solve this problem together?’ If that fails, then we analyse the case to see whether the client was given sufficient assistance but still won’t honour the agreement and whether the sum can be recovered. The dossier is only passed on to one of the bailiffs if the reply to both of these questions is in the affirmative.”

It all starts at our doorstep

ALFAM currently works with several bailiffs. Transferring a client doesn’t mean that the dossier is being relinquished, according to Henk Wijnberger. “We don’t sell debt portfolios but prefer to maintain control. The client remains ours. It’s our responsibility. Indeed, at this stage we want our bailiffs to continue caring for our clients to the best of their ability. We’ve made concrete agreements about that with them. And the figures show that our policy is working. Our portfolio is growing – in a controlled manner – and still the number of clients in arrears is decreasing. I think the reason for that is that we’re continuously learning. We’ve built all kinds of evaluation moments into the cycle of underwriting, repayment and arrears management. As a result, we can continuously fine-tune our underwriting policy based on what we learn from the items in the backlog.”

Uniform access

Performance Management (Cwize) plays an important role in our cooperation with the bailiffs. This software platform provides ALFAM with uniform access to dossier information in the bailiffs’ systems. “In the context of the reorganisation, we sat down with our bailiffs and discussed the design of the software platform and the dashboards,” Tessa Scheick says. “We would like to get away from the black box, which only gives us retrospective access. Thanks to Performance Management (Cwize) we have more information about the status of the various dossiers and the costs that they’re running up – to the level of each individual dossier. As a result of Performance Management (Cwize), complex dossiers from the past have resurfaced. For example, clients that in our opinion have been involved with the bailiff for too long. This information is pure gain for us and contributes to our responsible lending. Performance Management (Cwize) makes this possible, both generally and at the dossier level.”

From black box to transparent insight

ALFAM intends to meet up regularly with the bailiffs to make decisions about dossiers based on the hard figures generated by Performance Management (Cwize). “It’s great to see us taking joint action in this,’ says Henk Wijnberger. “Together with Performance Management (Cwize) and the bailiffs, because ultimately we all have the same interest. And that’s the same interest as the client’s. Of course this all sounds splendid, but we’ve got a long way to go yet as a company. We want to achieve a lot more. We’ve got our sights set on the position of undisputed market leader. It’s true we’re the best, but we’re not the biggest yet. That’s just a question of time though.”