Overcoming Financial Services challenges with technology

Topic: Financial Service

The rise in the cost of living will see many people incurring debt for the first time this year, while those with existing debt will find repayment more difficult as they juggle day-to-day expenses that have risen sharply. Collecting debt effectively and in a way that is sensitive and empathetic has never been more important. 

Technology can help debt collection and management agencies manage this challenge, among others. Keep reading to discover how.

Top debt collection challenges and how technology can help

Rapid acceleration in digital expectations

In our global customer engagement study, we found that 69% of the 5,000 respondents surveyed don’t want to talk to someone about their problems if they are struggling financially. And more than 37% would rather self-manage their personal affairs via a secure system that eliminates the need for human contact.

Consequently, debt collection agencies are under pressure to digitalise their comms strategy. Consider how you can give your debtors an opportunity to take control of their personal financial affairs. 

For example, a mobile collections strategy, where customers receive a personalised SMS message with a link to a fully branded, mobile-optimised digital portal. After verifying their identity, every activity that could be carried out with an agent, can be handled by the customer, such as:

  • View/change their payment plan
  • View upcoming payments
  • View how much is still owed
  • Request pauses
  • Make payments in advance
  • Set up direct debits

All data used by a mobile collections solution is fed from your existing CRM system, and then once the customer has done their part, that data is fed back into the same CRM system.

You can also help by sending digital reminders – e.g. via email, SMS or WhatsApp messages. These routes are much faster, more cost-efficient and engaging than the traditional letter or phone call. Notably, mobile messaging boasts open rates of up to 98% for SMS and 99% for WhatsApp compared to email’s 21%.

Real-time, accurate customer data

Having the most up-to-date data on your customers, whether it’s contact info or affordability and individual circumstances, can help you collect debt more efficiently. 

For example, you may have a vulnerable tenant that makes a payment for their arrears or agrees to a payment plan. If they then receive a message or a call about that payment (which they thought had been resolved), this could lead to stress and strain the relationship. 

For debt collectors, that means they not only need access to one source of data truth, but they also need to be able to trust that the data is accurate. 

The Esendex solution monitors the complete customer cycle to automate the most important processes without the need for human intervention. Utilising a powerful decision-based engine based on business rules and analytics, the platform is highly configurable to fit operational requirements, regardless of circumstance.

Stretched internal resources

The increase in the cost of living may unfortunately lead to an increase in debt. Yet debt collection agencies may be limited in their operational and IT capacity, which can delay the overall collection process.

Perhaps you’re receiving more calls than your call centre staff can manage, which is leading to long hold times and a negative impact on customer service. There are a few ways technology can help you with this challenge.

  1. Offer a variety of ways for your customers to interact with your business, from phone and email to live chat and SMS. This helps customers to stay in control and gives them options to manage their debt without needing to speak to someone directly.
  2. Automate processes where possible. Chatbots, for instance, can help handle frequently asked questions or point customers to your knowledge base/appropriate support resources. This can free your support team up to help the more vulnerable customers who may really need their attention.

The idea is to provide customers with the same services they’ve always been used to, but in a self-serve, automated environment that can be accessed at any time or place. For customers, this will improve their overall experience. For lenders, this can help improve the overall collection process and save in-house resources.

The ability to identify financially vulnerable customers

While some customers may miss payments but are likely to remain financially secure, others may actually be at risk of becoming financially distressed. These are the customers who will need special attention and debt collectors need to be able to quickly identify these people and tailor their communication strategy as a result.

It’s important to strike the right tone, especially when it comes to sensitive matters like debt collection where people are often at their most vulnerable. 

Access to reliable, accurate data on-demand is a start. Your collectors can then use this knowledge to offer practical solutions, care and support, protecting the customer from feeling overwhelmed and improving outcomes for the debt collection agency.

What great customer experience looks like in debt collection

According to statistics from the ONS, nearly half (49%) of adults who were behind on their energy bills also admitted experiencing high levels of anxiety compared to the 33% who were not behind. Additionally, more than a fifth of people in the UK were borrowing more money or using more credit due to the increase in the cost of living. 

This is precisely why debt collection and management agencies need to start questioning whether they are placing customer experience at the heart of everything they do. It’s time to start prioritising a compassionate approach when it comes to collecting debt.

In our eBook, we present the key takeaways from our global customer engagement survey and how you can ensure you’re always being empathetic when managing sensitive customer situations.

Author Avatar
Prachi Bametha

Marketing Coordinator, Esendex Australia