Digitalisation in collections: lessons from other industries

To respond to that challenge every organisation introduced some types of alternative, low-cost, contact channels. As far back as a couple of decades ago, organisations started to introduce SMS and outbound auto-voice capabilities, and today, these channels are still in place. The vendors may have been changed to further reduce cost or provide additional capability, but essentially the same channels that have been kicking around for years are, in the main, still active in a lot of organisations.

These contact channels have then been incorporated into quite a linear collections strategy that, depending on risk, might start with an SMS, then maybe outbound auto-voice before entering a predictive or manual dial phase.

Some solutions are more sophisticated with the ability to "self-serve" by making a payment or a promise to pay in the outbound auto-voice channel, for example, but that SMS is still trying to have the customer contact an inbound collections centre inside restricted opening hours with the end result still a manual intervention.

It is surprising that some organisations feel this is a "digital strategy".

When these channels were introduced way back when, the reason they became popular was because of the lower cost to serve and the ability to not necessarily require human agents which meant the channels could invariably be invoked at any time. In those times regulation was not how it is now. Fast forward to the present day and even now the majority of organisations using these channels still choose the date and time of the channel that suits THEM and decide which channel THEY want to use.

As we all know, we are now in the Age of the Customer and customer expectations are vastly different to what they were when organisations adopted this lower cost technology and incorporated them into their collections strategies.

Don't get me wrong, there is a big appetite to improve digitisation in most organisations but this is often being led at an enterprise level with Collections usually the last to come on board. With Collections departments facing lengthy delays to take advantage of enterprise wide digital solutions it is not surprising that other, more tactical, solutions are being introduced alongside the existing low-cost channels.

And therein lies another problem. Not only are Collections departments completely reliant on old contact channels that have usually been provided by separate vendors, these newer solutions are also likely to be from another different vendor, meaning that all the digital channels are in their own silo. What does this mean? It means that the channels do not interact; there is no dynamic channel change based on the outcome of the previous one; data is in different formats; there is usually an inconsistent approach to uploading results to the collections system and there is absolutely no chance that the customer can move from one channel to another to suit their own requirements.

As I have stated, we are in a very different place now. Customers expect that they can interact with their suppliers whenever and however they want. Customer habits have changed. Customers want to interact at a time, and using a channel, of their choosing. Recent research has shown that most adults will service their commitments between 8pm and midnight, probably on a tablet. How does this fit into your digital collections strategy?

Collections organisations are, in the main, still seeking solutions from the usual vendors who have been providing the same industries for years. While we are still patting ourselves on the back for having a limited online I&E capability, the retail industry is light years ahead with their digital capabilities.

Look at Amazon. I can interact with them 24/7. I can easily self-serve (returns, for example) and I can interact with them however I choose - web chat, email, schedule a call back - all on any device, online or app.

What can we learn from the Retail industry? Do we want to be like that?

arum's view is that excellent collections and recoveries deliver positive outcomes for the customer and the creditor. Insight led collections strategy and multiple channels enabling the customer to choose how to interact will be key to achieving excellence in the future and it has been great working with a number of organisations over the last few years that share the same vision.

Every journey starts with an idea of a destination and then the first steps. Whilst the road will be challenging for many it is great to see so many businesses commencing a collections digitisation journey where the customer journey is a key driver.