A Digital Debt Collection Future
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Conclusion
Financial institutions demonstrated their ability to quickly pivot and transform during the
pandemic to serve the needs of their customers. While delinquent account volume did
not spike as originally feared, many collection executives expect an increase as supports
begin to subside later this year. Institutions have the opportunity to take action now to
ensure they can support (and hopefully retain) valuable customers and effectively collect
delinquent debt.
To meet this critical objective, institutions should consider the following action steps:
In anticipation of increased account volume, now is the time to invest. While
institutions have experienced great results from their technology investments for
loan origination, collections functions are largely stuck in the past. With economic
uncertainty on the horizon, institutions need updated tools to ensure they can
effectively engage with customers and offer informed payment plans.
Evaluate investments based on their ability to provide a better experience while
increasing efficiency. Factoring in the treatment of delinquent customers is an
imperative from both a customer retention and a regulatory perspective. Many digital
transformation efforts combine this need with the ability to collect more efficiently,
by increasing automation and better tailoring strategies to fit a customer's
preference and financial profile.
Take advantage of technology that empowers customers to deal with a debt
quickly without speaking to a collector. At least a portion of delinquent customers
prefer a self-service option, where they do not have to speak with an agent to set up
a payment plan. Serving these customers according to their preferences and
automating time-intensive processes allows the same number of collectors to handle
more accounts and focus their attention on more complex or challenging situations.
