Why flexibility is the future of debt collection

Peter Lyons
SVP - Business Development
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“Flexibility is the key to stability”. These wise words from legendary coach John Wooden are as relevant to business as they are to basketball. And, in our changing times, successful debt collection will depend on a collector’s ability to flex their approach to engage and empower consumers while also embracing compliance.

Channel of choice engagement

At this year’s iA Strategy & Tech digital conference, I was part of a panel on ‘the increasingly independent consumer’. One of the things we discussed was how people in debt frequently have multiple creditors. Successful debt collection depends on being the creditor they chose to engage with, so ‘competitive advantage’ comes from making engagement as easy as possible for your customers.

Conversations around debt are difficult. By 2018, digital was proving to be more effective than calling, with 73% of customers in late delinquency making a payment when contacted digitally.1 Digital is now even more embedded, accepted and expected. Customers demand it, and lenders must flex their approach in response.

Self-service, omni-channel solutions have transformed debt collection for our clients. We make it easy for their customers to interact when and where suits them, and to move seamlessly between different channels depending on the moment. Over the last 18 months, we’ve transformed debt collection for a leading US bank. Previously heavily reliant on outbound calls, we now drive 60% of activity through the digital stream and have doubled average net yield per customer.

Empowering customers with flexible repayment

Anytime, anywhere engagement is an important first step in successful debt collection. But, in addition to the ‘when’ and ‘where’, collectors need to be flexible when it comes to ‘how’ customers make repayments. Control and pride often go hand in hand, and a spiraling loss of control is one of the most depressing and destructive aspects of mounting debt. Successful collectors will be those who treat customers as part of the solution, not the problem. People are more committed to resolving issues when they take an active role in shaping the solution. Customers who played a part in creating their own manageable repayment plan are more likely to stick to it than customers who feel they’ve had something unrealistic imposed on them from on high.

Putting your customer in the driving seat gives them dignity and delivers results. As well as increasing net yield by 101%, our digital-first approach for a leading bank turbo-charged employee and customer engagement. Similarly, our flexible, omni-channel platform and communications improved debt collection by 120% for a student loan provider while reducing complaints and delivering consistent customer satisfaction scores of 99.5%.

Embracing compliance

Debt is tough and so are the regulations that surround it. As they continue to evolve, a flexible, digital-first strategy goes beyond enhancing customer experience—it also ensures that your operations remain compliant, now and in the future.

Collections of the future: Our blueprint for flexibility

Experts predict a tsunami of debt delinquency in the wake of the pandemic. As creditors face increased pressure to achieve more with less, they’re looking to trusted partners such as Firstsource to boost recovery rates and maximize return on investment.

Drawing on more than 30 years of experience in this sector, we’ve identified a new model to ensure that your debt collection is fit for purpose. We’ve summarized our thinking in ‘Collections of the Future’, and you can download our white paper here. It explores how a flexible, digital-first approach strengthens engagement and empowers customers so that more debt gets repaid faster. We also examine how powerful digital levers such as analytics, automation, artificial intelligence (AI) and machine learning (ML) can streamline operations and strengthen segmentation and targeting, ensuring that you build on valuable existing knowledge to maximize effectiveness rather than reinvent the wheel.

Stability and success through flexibility

Our flexible self-service tool makes debt that little bit easier for everyone. It meets your customers where they want to be met, enabling them to shape their own solutions and regain control. It transforms your internal model, freeing up agents to focus on helping rather than hassling customers, and saving you time and money. It ensures compliance and, most importantly, helps your team reach and exceed your debt recovery goals for a stable, successful future.

1 The customer mandate to digitize debt collection strategies | McKinsey, July 29, 2019

Peter Lyons

SVP - Business Development

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