Boost collections success with mobile communications

I've written a couple of posts here earlier this year about how keen consumers are for banks to interact with them more via mobile communications. Nowhere is this truer than in the world of collections. People do not like hearing from collections agents. That is not to say that most of them don't or won't pay their bills, but rather that they simply don't like getting the collection calls or having 'that' conversation. So, it is in the interest of banks to broaden their collections methods to make collections as quick and stress-free as possible writes Daniel Melo

I’ve written a couple of posts here earlier this year about how keen consumers are for banks to interact with them more via mobile communications. Nowhere is this truer than in the world of collections. People do not like hearing from collections agents. That is not to say that most of them don’t or won’t pay their bills, but rather that they simply don’t like getting the collection calls or having ‘that’ conversation. So, it is in the interest of banks to broaden their collections methods to make collections as quick and stress-free as possible writes Daniel Melo

Many banks find the main problem in collections is lack of dialogue with customers, which makes it nearly impossible to negotiate debt repayment. Providing the means for customers to get up to date with payments without dealing with an agent – for example through a mobile app, or via text message – can be far more effective than traditional methods, in terms of both collection rates and costs. Lenders benefit from broadening their approach and tracking customer preferences, so that if a customer is really responsive to text messages but ignores calls, then the lender can stop using the voice channel and save time and money.

Making use of all available communication channels seems obvious, but it’s hardly standard practice today. Very few lenders offer mobile solutions that allow customers to manage their payments more flexibly. By contacting customers using automated calls and texts, banks can increase the number of promises to pay by delinquent customers, while reducing the cost of collections.

For instance, BNP Paribas Bank Polska has used the FICO® Adeptra® Mobile Services Platform for more than a year to engage with delinquent customers via mobile in the early stage of the debt recovery process with great success. The bank found that improving customer contact not only increased collections results but also improved overall customer experience.

Offering flexible and tailored mobile collections services empowers the consumer, giving them more control and making it easier for them to pay, which results in many more payments within a much shorter time frame. One user of mobile methods reported that once customers had signed up, 80 percent of them paid within two days of receiving the notification to their mobile phone, and 40 percent paid their bill within 30 minutes of receiving the SMS alert.

Clearly, leveraging mobile communications is an effective and efficient method for banks and consumers alike: Banks can reach customers wherever they are and dramatically improve collections performance, and customers can reply at a time that is convenient for them and not face awkward conversations with agents. The result is reductions in call centre volume, faster customer response, increases in collection rates, higher customer satisfaction, and lower costs.