Aligning collections strategy in a mobile world

Naturally, neither I nor you would like to hear from a collections department. It would be discomforting and embarrassing. Finding a way to communicate with everyday customers is central to a successful banks' collections strategy. Mobile technology provides a way of facilitating this alternative way of communicating, with SMS and automated reminders replacing the unsettling live call from a hungry collector agent, writes Daniel Melo

Naturally, neither I nor you would like to hear from a collections department. It would be discomforting and embarrassing. Finding a way to communicate with everyday customers is central to a successful banks’ collections strategy. Mobile technology provides a way of facilitating this alternative way of communicating, with SMS and automated reminders replacing the unsettling live call from a hungry collector agent, writes Daniel Melo

For collections organisations, the benefits of targeted, automated, mobile communications are higher customer satisfaction and fewer complaints. With the ability to work large volumes of cases in a short time, they can also identify accounts with issues early and focus agent time on these more complicated delinquencies.

The quickest and most scalable method is usually an automated call, text or email to a mobile device. But to fully leverage the potential of automated contacts to mobile devices, collections organisations need finely targeted, even customer-specific, communications strategies to coordinate strategy execution across all channels, capture results and manage follow-up.

Analytics and business rules can be used not only to segment delinquent groups based on credit risk but to determine which channels and sequence of actions are most likely to be effective based on risk, customer preference and the results of past contacts. Automated, intelligent communications solutions use scores and data from numerous sources to determine the best contact strategy for each customer at the current point in time.

Well-targeted automated messages are generally well-received because they’re less embarrassing and awkward than talking with an agent. Customers can often privately and conveniently resolve the delinquency themselves using self-service options for making a payment or even negotiating a payment plan. Here are some examples:

  • When one of the world’s largest electric utility companies surveyed its customers, 61% said they preferred an automated contact (voice, email or SMS) over dealing with collection agents.
  • An automobile credit company using a mobile collections solution for both outbound and inbound contacts found that 79% of customers contacted successfully used self-serve options, resulting in payments made on 44% of the assigned portfolio.
  • A UK banking group achieved a 75% self-serve rate for inbound contacts using personalised automated inbound channel.

There are other ways to fine-tune your targeting and improve response. FICO’s research with UK clients using our own FICO Adeptra Risk Intervention Manager shows differences in channel response depending on variables such as whether an automated call has a male or female voice. We have observed greater rates of automated resolution with the male voice, but also higher rates of disconnect. Female voices create a higher rate of requests to speak with a live operator, and overall lead to a slightly higher conversion rate.

Mobile engagement doesn’t replace live collectors. However it is a critical part of a successful collections strategy, particularly if you are competing for payback in a debt-stressed environment. These days, unfortunately, that’s most of the world. What has your experience been?