Transforming collections leads to a better outcome for everyone

Increase collection rates, halve costs, cut delinquency rates. No, we’re not dreaming: digital is set to ransform the world of collections.

Transforming collections leads to a better outcome for everyone

If I said to you I could increase your collection rates by 10-20% and halve your collection costs at the same time, you’d probably think I had my head in the clouds.

If I then said I could do all that while also engendering loyalty from your customers, you’d probably think I was dreaming.

And if I were to then say I could do all that while cutting delinquency rates at the same time, you’d probably think I was living on another planet.

But I’m not. And I can. And I can do that today.

And, what’s more, there’s even better news in the pipeline. I’ll soon be able to help you give your customers some real cool, easy-to-use tools to that will help keep their finances fit and healthy.

OK. So what’s this miracle solution?

Modernising collections

You’ve probably already heard people talking about digitising collections. But did you know that digital could make such a significant difference? Let’s explore how.

Firstly, digital frees up your call centre staff and this helps cut costs. Giving customers an app for their PC, tablet or smartphone allows them to not only understand their debt, but also explore their options and to agree a way forward without input from your staff.

This puts an end to the majority of those long forty-minute phone calls to every customer who’s behind with their payments. Instead, your now-optimised call centre staff can focus their attention on the most complex cases.

Secondly, digital allows your customer to address their debt when their mind is not elsewhere, their stress levels are lower and they have the information to hand – and this significantly improves collection rates.

With customers no longer confronted in front of colleagues at work, while the kids are arguing over the Xbox or in the middle of the supermarket, but instead relaxed on a quiet evening in front of the TV, payment rates improve.

More than that, digital gives customers easy-to-use tools that allow them to visualize their options along with the time and the space they need to ensure any decision they make is right for them. It helps you to treat your customers fairly – and to show the regulators that you’re doing so too.

Proactive action

When it comes to customer finances – whether you’re a bank, insurance or utility company, pubic sector organization or any other company that needs to deal with customer debt – digital has a lot more to offer besides just collection benefits. It also allows you to work with your customers – particularly those at risk of delinquency – to ensure they take action before they get behind with payments.

Today’s advanced analytics tools can learn about the patterns of behaviour that precede delinquency and, in doing so, identify and alert you and your customers to potential problems well before they arise.

Let’s take a utilities customer as an example:

The customer is struggling to pay their monthly payment. It’s regularly one or two weeks late. The analytics notice this pattern of behaviour and flag the customer as ‘at risk’.

The smart analytics reach out to the customer via the app and suggest an alternative payment plan or tariff that’s more suited to the customer’s circumstances and fuel usage.

Getting personal

As our world gets increasingly connected and increasingly smart, digital tools will be able to help customers on an even more personal level. Where customers are happy to share data, analytics will be able to automatically suggest many other possible courses of action and the likely outcomes of each.

Going back to our utilities example, today’s customers increasingly have not only smart meters, but also have more and more smart connected gadgets (such as the Nest thermometer or Samsung SmartThings) around their homes.

If the customer allowed their utility to tap into the data coming from the smart gadgets, the utility could employ advanced analytics to look into all that data – adding it to the data it already holds from the smart meter, the customer’s payment patterns and available tariffs – and come up some advice and options. It could also add in third party data such as weather forecasts for the customer’s postcode.

Personalised tips might include things like:

  • “Why not turn your heating off 15 minutes before you leave for work each morning. Your home will still remain warm until you go out the door. This could help you cut £4 off your monthly heating bill.” Or,
  • “Have you thought about turning your radiators down in your back room since it’s hardly used? This could save you £5 a month in heating costs.” Or,
  • “The forecast for next week is for sunshine. Why not turn your heating down one degree while the sun warms your living room. This could save you £3 in heating costs.”

Digital already has a lot to offer… but what we see today is just the tip of the iceberg. Have you explored how digital can help both you and your customers?