Credit Connect hosted its Online Collections Technology Think Tank last week which saw collections strategies and the impact of political and the cost of living economic stresses discussed by collections professionals from a variety of industry sectors.
In the ninth edition of the Collections Technology Think Tank series, hosted by Credit Connect Media, industry professionals gathered to discuss the evolving strategies in collections amidst the rising cost of living. The forum, labelled 5.2, examined the importance of customer engagement, the impact of digital transformation on collections, and strategies for addressing affordability and vulnerable customers.
Just under 100 collections professionals from banks, building societies, motor finance, utility firms, local authorities, telecoms, media, debt collection agencies, and fintechs were amongst the viewers across the two sessions.
Commenting on the event the event Chair Chris Warburton, Director and RO Strategy and Event Chair said “It was great to be able to host the Online Collections Technology Think Tank again. There were some super interesting ideas and discussion around some of the thinking that can make a real difference to levels of engagement and support for customers in the Collections process, which combined with technology is starting to lead to new solutions. Thank you to all of the panel and the Credit Connect team for pulling this event together.”
Speaker, Simon Bayley Managing Director at Specialist Motor Finance said “I really enjoyed our discussion, it was good that all of us were from slightly different backgrounds, which allowed for different opinions and some good challenges. I took away two areas that I can look at using in my business from this discussion, so I hope the attendees were also able to find at least one good takeaway that can use in their businesses.”
Colin White Founding Director at Credit Connect said “It was great to see such a great mix of collections professionals take part in the industry panel discussions supported by the viewer interactions responding to the survey polls and asking questions at the event.”
“I look forward to continuing the conversation at the next face-to-face version of the event taking place on Thursday 7th November in Manchester.”
The insights from the event were recorded and re-runs can be viewed by registering and clicking on this link.
The event was supported by Financial Cloud and Moneyhub.
Selected Event Questions and Answers
Does self-service technology, increase the demand on staff, in that every customer interaction is now likely a complaint, vulnerable customer or for want of a better phrase a problem? Easy calls have gone online, and resources are lower, making it call after call of challenges.
SB: “By definition the answer is probably yes, as self-serve would cover the easier activities. Some teams are split so early (usually easier calls) are split by team also, so this isn’t anything new. There is a risk the other way that too much self-serve/AI/automation would restrict the ability to identify vulnerability or a complaint (more advanced AI could pick up but not in most businesses today).”
How does case ownership fit into this new digital world? Should agents have case ownership, or should the digital tools enable continuous conversations regardless of the agent handling the case?
SB: “I am still an advocate of case ownership, and this is probably easier in a digital world, as you are not always expected to respond immediately, so it is easier to have a 1-2-1 relationship with a customer. This for me is a key benefit outside of using the customer’s preferred communication method.”
SB = Simon Bayley, Managing Director at Specialist Motor Finance
Selected Event Poll Results
What digital channels have you implemented in the last 24 months have had the greatest impact?
SMS 12%
WhatsApp 12%
Web Chat 58%
Other 20%
What emerging trends or innovations do you believe will shape the future of collections risk measurement?
AI and Machine Learning 50%
Big Data Analytics 10%
Customer Engagement Platforms 40%
From your experience, when will companies be able to evidence that vulnerability data and insights is truly influencing their day-to-day operational strategies?
Already started 55%
Next 6-12 months 22%
12+ months 11%
Unlikey 12%
Session 1: Collections Communications and Engagement
Key Takeaways
Transition towards digital-first customer engagement strategies in collections.
Emphasis on customer control over engagement and account management.
Integration of open banking faces challenges in consumer trust.
Shift from outbound calling to more efficient digital communication methods.
Importance of personalization in customer communication for better engagement.
Utilization of real-time events and triggers to capture customer attention.
The need for hybrid approaches combining digital and human interactions.
Process design plays a crucial role in effectively implementing digital strategies.
Long and complex calls may become more prevalent as simpler issues are resolved digitally.
Data consolidation and integration are key for seamless customer interactions.
Importance of empathy and understanding in customer conversations.
Continual evolution towards omnichannel or hybrid communication methods.
Innovative Techniques and New Ideas
Using hyper-personalization to enhance customer communication.
Combining digital and human interactions for complex cases.
Utilizing marketing techniques in debt resolution communication.
Converting voice call data to text for better analysis and understanding.
Key Statistics
Calls are approximately 60-70% longer post-consumer duty implementation.
Only a minimal uptake of open banking in collections observed.
Key Discussion Points
The shift from outbound calling campaigns to more effective digital channels.
Customer reluctance to use open banking for affordability checks.
The role of empathy and understanding in customer service.
The increasing importance of real-time data and event-triggered communications.
Challenges of integrating multiple digital and communication channels.
Personalization of communication to increase customer engagement.
The importance of a holistic view of the customer journey.
Process design as a critical factor in successful digital transformation.
The need for ongoing training and tools for agents managing digital conversations.
The impact of consumer duty on call lengths and customer interactions.
The future role of AI and language models in customer communication.
The importance of maintaining a human touch in digital-first strategies.
Session 2: Collections Risk Measuring Affordability and Vulnerability
Key Takeaways
Importance of Understanding Financial Behavior: Effective collection strategies require a deep understanding of the financial behaviors and psychological states of customers.
Scarcity Mindset: Customers facing financial difficulties often enter a scarcity mindset, leading to suboptimal financial decisions.
Open Banking Data: Utilising open banking data can significantly improve the understanding of customers’ financial situations, enabling more tailored support.
Role of Collections Agents: The role of collections agents is evolving to become more empathetic and advisory, akin to a critical friend.
Automation and Technology:Emphasis on using technology and automation to provide clear, actionable insights to customers, particularly younger generations who prefer digital interactions.
Consumer Duty: Regulations like consumer duty are pushing firms to ensure fair treatment and clear outcomes for customers, focusing on affordability and vulnerability.
Communication: Clear, simple communication that resonates with customers’ understanding is essential for effective collections.
Personalisation: Tailoring approaches to individual customer needs, rather than using a one-size-fits-all model, can lead to better outcomes.
Training and Empowerment:Investing in training collections agents to handle complex cases with empathy and providing them with the mandate to make decisions.
Long-term Planning: Recognizing that the cost of living challenges are not a temporary crisis but a new normal requiring sustainable solutions.
Balancing Empathy and Objectivity:Finding the right balance between being empathetic to customers’ situations while maintaining the objectivity needed for financial decision-making.
Behavioral Economics: Applying principles of behavioral economics to understand and influence customer decision-making in financial distress.
Innovative Techniques and New Ideas
Behavioral Economics in Collections: Implementing strategies based on behavioral economics to better understand and influence customer decision-making.
Open Banking for Enhanced Insights: Using open banking data not just for affordability checks but also to provide customers with a clearer picture of their financial habits and potential adjustments.
Professionalising Collections Roles:Increasing the expertise and decision-making power of collections agents to handle complex customer situations more effectively.
Visual Data Representation:Presenting financial data in visual formats to help customers better understand and manage their finances.
Robo-Advice in Collections:Exploring the potential of robo-advice in providing automated yet personalized financial guidance to customers in distress.
Key Statistics
27% of the population has engaged in risky financial behavior.
63% of these cases are due to rising bills.
47% increase in loan success when utilizing ongoing open banking data for affordability checks.
80% of customers are willing to share their data through open banking journeys during loan originations.
Key Discussion Points
Cost of Living Crisis: The ongoing impact and its evolution into a long-term financial strain.
Vulnerability Definitions: The broadening definition of vulnerability and its implications for financial services.
Empathy in Collections: The need for collections agents to act as empathetic advisors rather than mere debt collectors.
Technological Integration: The role of technology in streamlining collections and providing clear data to customers.
Consumer Duty Regulations: The push for fair treatment and clear outcomes in financial services.
Behavioral Economics:Understanding how scarcity mindset affects financial decision-making.
Data Utilization: The importance of leveraging open banking data for better financial insights.
Customer Engagement: Strategies for engaging customers effectively, especially through digital channels.
Personalization in Collections:Adapting collections strategies to individual customer needs.
Training and Empowerment of Agents: The benefits of investing in highly trained collections agents.
Short-term vs. Long-term Financial Decisions: Helping customers balance immediate needs with long-term financial health.
Role of Visual Data: Enhancing customer understanding through visual representation of financial data.
*All data and statistics copyrighted to Credit Connect
