Using technology to optimise collections strategy

Technology makes it possible to improve the collections management process by monitoring customer behavior, providing collection trends and analysis and receiving feedback on a 24x7 basis. But, automation alone cannot ensure efficiency and improvement in processes – you need to implement it by optimizing technology with incorporating the right strategies.

After all, Collections Management is about converting outstanding amounts into cash, as fast as possible. And, this is done in the most optimum manner by leveraging the combination of technology and strategy, which can provide benefits like:

• Increased Visibility for the management, enabling pro-active decisions making, while improving reporting and predicting volume and cycle times
• Improved Systems can capture system weaknesses, facilitate root cause analysis and improve accuracy and enhance organizational efficiency. It also allows account assignment allocation to specific collectors based on the type of customers (high risk, low risk, medium risk, likely to pay etc.) and the stage of the account (follow up round 1, follow up round 2, repeat follow up etc.).

Technologies being used

Skip tracing - Locating a current address or phone number of accounts of a consumer.

Predictive dialers - The dialers are effective in placing thousands of calls quickly. But, in a number of cases when placing calls the percentage of ‘left message’ situation was still very high sometimes, as high as 80% (unverified data). Even though the duration of these calls were short they represent a large amount of time. Thus, it is not 100% effective.

Interactive messaging solutions - This led to the opportunity of using interactive voice messaging solutions which are considered more cost effective. Some of these solutions use text-to-speech technology which deliver personalized messages to the debtor and even connect the debtor to call center personnel, if required. This solution is effective even in a ‘left message’ situation.

Evolution of technology in the collections management process:

• 1960’s: Use of paper records, typewriters, telephones etc.
• 1970’s: Advent of affordable long distance services for the telephone permitted collection over greater distances at a lower cost
• 1990’s: Use of computers
• Post 2003: Automated dialers - A computer dials the numbers of delinquent consumers (more rapidly than humans can) and routes the calls that are answered to collectors organized into a call center. Significantly increasing the number of consumer contacts a collector can make
• Over a period of time, collection systems have become more and more sophisticated e.g. the latest generation machines are called predicative dialers. Computers determine the number of calls to make based on the time of day, the number of collectors logged on to the system, and variations in their average time speaking with consumers

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