The lending sector has rapidly grown after COVID-19 was implemented. Consumers were obliged to use loan facilities more than ever due to lower discretionary income and increased unemployment rates. For the same reason, debt collection agencies have reformed their operation procedures, including hiring Civil Lawyers Perth WA, implementing technologies, hiring the right talents, etc.
Debt collection companies have been compelled to convert from traditional collection methods, such as phone calls and letters, to digital channels due to rapid digitization. A McKinsey poll found that over 73% of overdue consumers paid up when contacted online before the pandemic. Since then, people’s dependence on technology has grown significantly.
Changes in customer behavior and the termination of industry-specific moratoriums exacerbate the problem.
So, what are the most important trends that your company should pay attention to? The important trends listed below will set the setting for and have an impact on, the fast-changing landscape. Do you want to improve the efficiency and productivity of your firm while retaining customer satisfaction? Keep track of the below pointers
- Embrace Digitization
Non-cash payments usage is growing at a rate of 32%, and in 2022, digital payments may eclipse money transfers for the first time. This tendency, together with the growing influence of the Buy Now/Pay Later (BNPL) model, will directly impact debt repayment patterns. So, what are the options for collectors? To fulfill evolving client expectations, they should take a dramatic swing toward digitization.
For this reason, companies are keen on identifying the areas that could be automated by mapping out their current procedures. Ultimately this helps in improving scale and processing accuracy. Also, to avoid costly errors caused by internal and external non-compliance, switching to automated compliance software could be an ideal choice.
Additionally, artificial intelligence can analyze customer information and provide succeeding case management.
- Implement A Multichannel Customer Support Strategy
According to a McKinsey survey, most debtors prefer to be reached and act via digital channels, whereas a smaller segment prefers traditional communication methods. This pattern is not only related to the age of the consumer but also to their outstanding debt.
Factors Supporting The Above Statement:
- Low-risk borrowers and those with low delinquent balances favored digital communication channels such as email and text over engaging with a bank representative on the phone. As the overdue amount climbs, so does the preference for conventional contact forms. Furthermore, clients aged 44 and up are statistically more likely to choose “analog” modes of communication.
- The same study found that making contact through digital methods resulted in full payment more often. Traditional methods – phone, voicemail, and letter – had a success rate of roughly 12%. In terms of digital channels, email received 19% of the vote, online banking received 46%, mobile push received 44%, mobile app received 20%, and text messages received 19% of the vote.
Therefore, a multichannel customer service plan is required to fulfill the desires of both “digitals” and “traditionalists,” as well as boost the collection success rate. Allow your consumers to contact you in various ways, whether in person, by phone, or online, and use their favorite channel when contacting them.
- Personalized Customer Service
Your debt collection plan must involve a customized approach to each consumer in the coming years. It may appear to be a difficult task at scale.
However, there are proper strategies to make it simpler. It’s all about combining different data sources to gain a complete picture of your consumer so you can adapt support and communication to them. Furthermore, you can use the information gathered about your clients to help you enhance your decision-making processes.
An advanced Data Analytics system can assist you in identifying consumers with a higher risk of default depending on their life circumstances and debt history. The information can then be used to create personalized repayment plans with a modified installment schedule, customized repayment time, and adjusted amounts of payments based on the debtor’s unique circumstances.
Personalized automation is also possible thanks to data analytics. You can speed up communication at scale without sacrificing the personal touch by segmenting clients based on certain characteristics. Your customer service representatives will be able to work efficiently and concentrate on defaulting or high-risk debtors.
- Increase The Number Of Self-Service Options
Determine how your customers desire to be contacted if your company hasn’t already done so. Also, it is important to know your clients’ communication choices, whether it’s email, SMS, or phone, and see whether they lessen the necessity for face-to-face contact. Create choices on your apps or website that allow clients to rapidly resolve small repayment difficulties, such as “Make a Payment,” “Register a Dispute,” “Check My Account,” and so on. Also, as a standard practice, always solicit user feedback on their engagement with your automated processes to ensure that system flaws are identified and corrected.
These are just a few ways debt collectors can communicate effectively with the clients, patients, and organizations they work with. Learn how cooperating with Capital Recovery Corporation can assist your company with past-due debt, good customer connections, and credit restoration. In the same way, debt recovery lawyers can also provide good assistance in framing the procedures.
- Hiring Right Talents
According to a new TransUnion report, over 60% of collection firms believe hiring and maintaining expertise is “very difficult.” The monthly leave rate in 2021 was 2.9 percent, indicating that staffing is an issue in most businesses. Unfortunately, the skills shortage will not only persist but will worsen until 2022 as a result of the rising demand for people to help agencies cope with the increased workload.
In this situation, agencies must increase their hiring efforts while also maximizing the performance of their existing agents through better segmentation and resource allocation tactics. Similarly, hiring civil law lawyers can help you combat legal procedures effectively.
To succeed, debt collection firms must embrace digitization, technology, and smarter collection tactics. Consider contact management, segment analytics, inventory management, and the newest technology to assure higher hit rates. However, it is also essential to seek help from debt recovery solicitors for a better outcome.