Technology is transforming insolvency practice at a critical time

Technology

As insolvencies return to pre-pandemic levels, digitisation and specialist expertise is vital – and NAB is backing practitioners at every step.

Promoted by NAB 2 minute read

Technology is transforming insolvency practice by reducing traditional manual workload at the same time as business failures are increasing.

These new tools combined with expert advice from business partners can help insolvency firms struggling to find staff to streamline efficiencies and maximise operational output.

According to the latest official figures, the number of insolvencies increased by 60% in the year to 30 June 2023 as companies struggled in a slowing economy without the COVID safety net of government subsidies and lenient creditors.

Macroeconomic factors driving change

“While business conditions are still strong across the country, there are some sectors that are most at risk such as construction, retail trade, and food and accommodation services.” said Adam Holster, Professional Services Banking Executive, NAB.

“In combination with suppliers passing through input price increases and high fuel and energy costs, unprofitable builders are entering administration. Last financial year, there were more than 2,800 insolvencies across the construction sector, an increase of over 70% over the year earlier.

“Retail trade and food and accommodation services continue to be impacted by inflation and cost of living pressures,” he added.

“Without fiscal and regulatory support, companies need to find their own path to solvency and will be seeking the support of insolvency specialist advice.”

Mr Holster said NAB Professional Service Banking Specialists are seeing more instances in which companies are trading through difficult circumstances and recover, with the support of insolvency and administration professionals, rather than being broken up or sold off.

“As the volume of insolvencies increases, it’s imperative practitioners have the right staff, the right tools and the right partners to operate as quickly and efficiently as possible,” he said.

Digitisation and automation key to efficiency

To optimise operations for practitioners, NAB has recently partnered with Insol6, an SaaS insolvency software provider that focuses on assisting professional restructuring firms. 

It is one example of an initiative the bank has undertaken as part of its efforts to continually seek ways to better help its customers in this space.

“Through digitisation and automation, the Insol6 software takes a significant amount of manual work away from the practitioners. Working alongside NAB’s Master Account Authority solution, the time and effort when opening new accounts for their customers is significantly reduced,” Mr Holster said.  

“We are focused on supporting our business customers by delivering exactly what they want – simpler services and innovative digital products that will help them succeed.

“It’s important that businesses get on top of things early, and one of the benefits of working with NAB is that we have dedicated professional service business bankers who understand the industry indepth, including legislative and regulatory requirements.

“As Australia’s largest business lender, we are able to connect insolvency practitioners and other professional services businesses to the right networks, and other industry players and thought leaders, that have the capability to help them get the best outcome for their customers,” he said.