The collections industry is built on people. People who pick up the phone, listen to customers and work with them to find a way to meet their financial obligations. People who let the most vulnerable borrowers tell them their story. People who convey that a debt is more than just a number on a spreadsheet. Robots won’t replace the human touch in collections, but technology has evolved in new and exciting ways to work with people. Incorporating the latest solutions can automate time-consuming and manual processes for both collections staff and the customer.
For younger customers, who spend significantly less time speaking on the phone than older generations, talking to a collections agent about personal finances can be incredibly uncomfortable. Research published by Deloitte shows that almost a third of smartphone users do not make any voices call in a given week. The technology this cohort rely on for the rest of their needs – online portals, applications and messaging – are helpful to overcome the rise in phone call anxiety. The key to correctly using these alternative communication platforms is to have an easy way to collect the same sort of information a human would, but through an online channel.
This data has recently become easier than ever to access. New regulations called Open Banking, in effect January 13th, give customers the ability to automatically share digital bank statement data with third parties. Similar to how the data from Google Maps allows Uber drivers to quickly find passengers, the bank statement data available through Open Banking allows lenders and collection agencies to service customers more efficiently.
The ability for customers to share their income and expenditure data directly from their bank account has huge implications for lenders. Offering borrowers the ability upload their own income and expenditure can help remove some of the friction inherent in phone calls, and free up collections personnel for more engaging tasks than form-filling. As we all become accustomed to on-demand services on our smartphones, taking time out of the day for a meaningful discussion can become a barrier to a successful collections process. Combining the ability for borrowers to upload data alongside tools to help them visualise the process in an online portal can keep digital engagement high.
Many customers using subprime lending products complete the entire application process online. The first time they may speak to another person about their loan may be with a collections agent. This human contact is important as a touchpoint for customers, but augmenting that experience with technology can benefit both the borrower and the collections staff. Rather than replacing staff with robots, successful firms will get the most of their people by using tech. It’s a future we can all look forward to.
Freddy Kelly, CEO, Credit Kudos