Mid-pandemic it was clear that a debt crisis was coming and that leaders in collections should brace their businesses for difficult times ahead. Nobody however could have predicted the size and scale of the cost-of-living crisis and its impact on customer repayments. It’s never been more vital to ensure that the technology underpinning customer collections are agile and fit for purpose.
As we head into a global recessionary period with energy and food price hikes front and centre in Europe and the worldwide economy in crisis, the overall consensus amongst financial experts are that consumer debt repayments will be an inevitable result of these global-economic conditions. And not just existing debtors. New borrowers may also see their circumstances change rapidly.
To survive this challenging environment, strong two-way customer communications processes and flexible repayment processes will be key.
Customer-friendly collections
A collections phone call is easily ignored, only adding to customer pressure and stress levels – and often with low levels of success for repayments. We’ve already seen culture and attitude shift from intimidating to a ‘how can we help culture in the collections industry in favour of flexibility and collaboration.
Flexible repayment options supported by ever-evolving digital technologies and consistent brand messaging puts the power back in the customer’s hands. Leverage technology to meet customers where they are online – whether that’s via email, social channels, on their phone via an app, a unified chatbot to human agent UX backed by sentiment analysis and so on. This will future-proof the business against ongoing economic challenges. Ultimately better technology = better experiences = increased collections revenue.
Digital transformation in the debt collections sector
By 2024, it’s predicted that digital banking users will exceed 3.6 billion users, indicating that consumers’ appetite for online financial services is growing exponentially. For lenders and collections agencies who are operating on legacy systems, the gap in innovation will begin to hurt as challengers and digital-only new market entrants provide the sort of slick, digital application and repayment experiences lenders expect. The aggressive phone call is no longer fit for purpose, replaced by customer-centricity.
Closing the gap between your people, processes and technology with data
The gap between business functions and their processes is closing. Marketing, technology, data analysts and collections teams should be working in tandem, not in silos. To create more sympathetic, empathetic and friendly collections that return on revenue, invest in a cloud CRM that provides data insights that inform best practices for customer engagement and outreach. Unify your messaging on all platforms, getting the right message in front of the right borrower at the right time. Build campaigns quickly and easily via drag-and-drop functionality and record each interaction with ease in the CRM, accessible by the right people.
2023 will be a pivotal year in debt collection. Those that focus solely on near-time success are almost certainly likely to struggle. Look at your mid and long-term investment in customer-first solutions now to protect the business against failure.
Investing in customer communications software
If you’re considering investing in customer collections software that provides customer-centricity, flexible, self-serve repayment options and data insights that inform segmentation, get in touch with Financial Cloud to request a demo now.
