Top Collection Challenges and How to Solve Them
The rapid rise of digital services has driven a change in what consumers expect in every area of their lives. Credit collection companies can’t only rely on traditional ways of recovering debt anymore. In this article, we want to look at top collection challenges for financial services and how to solve them.
Firstly, we all are aware of the impact the COVID-19 outbreak had on our consumer behaviours. The urgency and seriousness of the situation have forced us to overcome huge operational challenges. Because recoveries are such an important part of a company’s financial health and stability, BPOs and debt collection agencies need to redefine the collection journeys for their customers.
Secondly, companies started including more digital self-serve solutions in their customer journeys due to the travel constraints that resulted in working from home and reshaping customer service with effective crisis management.
Lastly, moving forward debt recovery companies need to develop more empathetic ways to collect debt. We all suffered physical and psychological effects from the lockdown.
Let’s delve deeper into the biggest challenges facing the collection and BPOs in the past year and how we can solve them moving forward.
Lack of Current Contact Information
Getting accurate information about your customers is essential to making timely payments. Any information such as debtors’ name, phone number, identity proof, address can be used when reaching out to the debtor once they become delinquent.
Also, establishing more than one method of authentication ensures that the data you hold on them is accurate and will help you succeed in your debt collection process.
When collectors are dealing with a lot of manual tasks, they naturally make mistakes and experience difficulty communicating with their customers, colleagues, and managers.
One of the biggest problems in the debt collection space is disjoint communication. With so many channels to choose from, not many companies implement a unified system to manage all the communications.
Therefore, tasks can become very inefficient when trying to contact customers on their preferred channel, get updates on their status, and track customer journeys.
The best solution to overcome this challenge is to invest in a communication platform that unifies communications and keeps everyone in the loop on the entire collection activities. Businesses are losing up to 30% in revenue each year because of inconsistent processes, so finding a more productive collection process is crucial to financial service companies.
Lack of Self-Served Solutions
With the lockdown promotion at higher levels of digital self-serve solutions, debt collectors and BPOs need to implement these options in their recovery processes.
Enabling customers to serve themselves not only solve low-complexity queries but also reduces high-volume tasks such as balance inquiries or quick repayments. For example, during COVID-19, in Germany, 13% of customers had registered for their bank’s online self-service and they reported a positive customer experience.
In response to the manual challenges, mobile messaging has become a favorite channel for consumers to interact with businesses, especially debtors. Instead of showing their vulnerable side to debt collection agents, people would rather interact with a chatbot or rich message.
In addition to SMS payments and voice bots, conversational messaging can improve collection processes massively without relying on the IT department. It has never been easier to send advance payment notifications, allowing customers to set up customized payment plans, all via text.
Meeting Compliance Requirements
In addition to complying with the Fair Debt Collection Practices Act (FDCPA), a strong compliance culture with clear regulations and expectations can prevent a company from damaging its reputation.
Moreover, when companies deal with delinquent accounts, they are required to state the laws and consequences to respect the rights of the debtor. Therefore, abusive practices should be avoided at all costs. Also, a debtor’s privacy must be respected and not shared with other parties.
A cloud communication platform helps collections teams to provide the best customer service while meeting all regulatory practices. Features such as embedded multichannel functionality, PCI-DSS accreditations, opt-out options will meet their customer’s expectations.
Lack of Automation
This is another common challenge that not just financial services companies experience. Lots of financial institutions have seen an increase in their workload because of a lack of automation and integrations.
Dependency on multiple programs to do one goal is counterproductive. Typical daily tasks require multiple systems that are not entirely integrated with each other, so it becomes difficult to manage simple tasks. Implementing an omnichannel communication strategy help manage tasks such as:
- generate collection activity
- process payments
- respond to customer inquiries
- add notes
- switch agents
- reduce the number of calls
Providing Secure Communications
First of all, when offering multiple channels for a diverse set of actions, from voice, SMS, Rich Media Messaging, bots, and more – there is a best practice that should be used across all channels.
Combine security best practices and communication technology to minimize the risk of compromising your customer’s identity and also winning at customer service. To offer a truly omnichannel experience in your BPO processes you can’t fall short on security or compliance.
Whether your collection activity is internal, outsourced, remote, on-site, or a hybrid of these, you need a seamless risk management strategy across channels. VoiceSage offers an all-in-one customer engagement platform that you can build within your systems to ensure high recovery rates and customer satisfaction.
VoiceSage is a global cloud communication platform delivering conversational messaging solutions to businesses that want to increase customer engagement and conversions. We aim to be the market-leading provider of self-service, intelligent mobile solutions across the globe.
Our solutions are differentiated by voice, virtual assistants, chatbots, and rich messaging technologies, enabling cross-channel customer service for inbound and outbound contact.
These are served by our global customer support and sales teams who make your needs their top priority. If you want to achieve payment rates of up to 49% and increase overall productivity, arrange a demo with one of our product specialists now.