Unlike other financial areas, such as taking out a loan, where customers have high intrinsic motivation to complete the process, paying an overdue debt is the last thing people struggling financially want to do. Due to the financial crisis brought about by the COVID-19 pandemic, increasing numbers of consumers are struggling with debt. For collections and recoveries departments and collection agencies (DCAs) to successfully and quickly set up a debt management programme, they will need to make the process as painless and frictionless as possible.

Interacting with customers through technologies that are intuitive to use, mobile-first, collaborative, and instant will significantly reduce cycle times for debt collection, avoid going to court, and foster a less acrimonious experience.

This guide will show five things that can be done in short order to help DCAs close large numbers of debt collection cases in minimal time, with minimal pain.

How New Technology Can Streamline and Improve Debt Collection

Texting and other messaging technologies have never been more ubiquitous, yet many collection companies have been slow to use them to expedite their collection processes. Understandable fears surrounding compliance and simple inertia has led to continued dependence on legacy systems, even though this has damaged the collection yield — and even though many of the latest technologies abide by the highest compliance standards.

Technology opens up the door to enabling the debt collection industry to survive and even prosper during COVID-19, when customer expectations of loan deferment are widespread. While it may be harder to aggressively demand repayment of debts, and deferments are now cemented into law in certain instances, debt collectors can significantly streamline the collection process for those debts that are not “protected.”

Even better, effortless technology can help soften the interactions that are sadly often marked by harshness and lack of trust between DCAs and debtors.

Ultimately, neither debtors nor collectors want to go to court to resolve payment issues. As there is no sign of debt slowing down any time soon, collectors must modernize their methods to accommodate their debtors’ preference for frictionless transactions and minimise the likelihood of involving the legal system.

By providing customer-centic, collaborative, and mobile ways of addressing debt, collectors can remove the friction from many collection calls and move calls quickly towards collaborative resolution. Below are some of the most important technologies that will help DCAs get there.

Easy Identity Verification

Collectors often find themselves wasting their own time on the wrong individuals. Instead of focusing on important collection opportunities, they are chasing customers who have either already been dealt with or are not the right people (as in cases of people with the same or similar names). This is especially commonplace with household debts where there are mistraced debts.

The good news is that this is easy to resolve. By simply sharing a document digitally with customers, collectors can provide evidence for why the call is being made. If it’s a case of mistaken identity or a previously closed case, the recipient can respond with a snapshot of his or her photo ID proving the misidentification. To ensure added authenticity, the recipient can take a selfie in live mode while optionally holding the ID.

Two-way instant document and ID sharing ensures that collectors can channel their efforts towards actual debtors and leave innocent individuals alone.


Customers today expect to be able to complete transactions on the go. Furthermore, 17% of households are smartphone-only, meaning their only way to connect to the internet is through their smartphone (and not a laptop or desktop computer). Lower-income households are even more likely to fall into this category, and these are people DCAs are most likely to encounter. They cannot be expected to fill out computer-centric PDFs or upload attachments to emails when they are dependent primarily or solely on their smartphones.

By ensuring documentation, forms, signatures, and payments can be completed in an intuitive and mobile-optimized environment, DCAs can increase their rates of successful collection.


Given that many debtors are reluctant to complete the debt collection process, it is critical to establish rapport with them. This can be accomplished not just through respectful, sympathetic, clear communication, but also through the channels of communication themselves.

Half the battle for a collector involves getting a hold of debtors themselves. There are huge technological investments in automated dialers, contact verification and efforts invested just within this first step of contact. However, these connections are often hostile and fail to progress collections.

That’s why while on a call, DCAs can both guide and encourage debtors with documentation and supporting calculation towards reaching an agreeable payment plan. The more collaborative the call, the more customers can complete action items while simultaneously being guided by the collector, the faster debtors can start paying through a debt management programme.


Due to the inherent sensitivity and stress of debt collection, it is critical to make processes as frictionless as possible. This means that document exchange, repayment plans, and calculations need to be shared in real-time – without requiring customers to get documents printed or scanned. Every time customers have to get off the phone and complete an action, the time to resolution is being prolonged. There is also a higher likelihood of the debtor sending incorrect or insufficient documentation, further fraying nerves, and delaying resolution.

Rather than leaving debtors alone to panic, DCAs can make it easy for them to settle their dues. For instance, DCAs can offer 1-click technology that allows debtors to easily and digitally calculate repayment schedules and sign up for debt management programmes.

Built For First-Call Repayment Agreement

Debtors frequently complain about the abundance of calls from collectors, which frequently border on harassment. There are no laws regulating the frequency of these calls, but this way of managing debtors is largely ineffective. It wastes debt collectors’ time, and increases the animosity between both parties, making it less likely that a satisfactory debt management programme can be instated within a reasonable period. Bombarding debtors with calls is a lose-lose strategy, especially because there is a better way.

An efficient in-call technology system can minimise the number of calls required to get a customer to join a debt management programme. By empowering debtors to complete more processes within the call, DCAs can reduce or even eliminate the need for repeat calls. This reduces customer antagonism, fosters cooperation, and allows collectors to move onto their next client.

A Golden Opportunity For More Efficient Debt Collection

By adopting digital customer-facing technology, debt collection processes can be re-imagined to be more efficient, productive, and customer-centric. These solutions ensure that debt collectors can be effective regardless of their debtors’ location at the moment the call is made, and collaboratively and instantly move to action items in the collection process.

DCAs can apply these principles and technologies to a variety of debt collection tasks including real-time and collaborative repayment plans, approval of repayment terms and conditions, and even in-call, instant payments. Within these areas, collectors can communicate with the debtor while payments are being processed to eliminate any potential confusion that may arise.

Howard Schulman, Director of Marketing at Lightico