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Exus Blog Article

Why debt collections software is vital in times of crisis

3 minute read

While the impact of COVID-19 cannot be denied, this is not the only crisis impacting the world economy. It’s been a little over a decade, for example, since the last global financial crisis, and many countries have faced conflicts and natural disasters in the interim.

There are several factors that make debt collections problematic during times of crisis. Firstly, there’s the question of ethics and empathy. With many debtors experiencing a sudden decrease in wages and some perhaps being laid off entirely, country-wide disruption of businesses often results in periods of grave uncertainty – not something that sits well with debt repayments, which thrive on consistency. This is why temporary measures must often be taken during these times and certain operational changes also need to be negotiated.

Debt collections software can provide a lifeline for banks and collectors in times of uncertainty. It has already helped countless collectors through some of the most severe natural and economic disasters of the last few years. It mitigates the impact of COVID-19 on financial institutions and customers alike and allows us to prepare for future crises.

Working from home

3679273In the event of any crisis, whether it be a global virus pandemic, a local conflict, or a natural disaster, it’s likely that call centres will be shut down and employees will be asked to work from home. This is where the flexibility of web-based collections software, deployed either on the cloud or on-premise, truly reveals itself as a secret weapon.

As we’re discussing software here, rather than bulky and expensive hardware, it’s quite feasible for employees to carry out their duties from home using the same tools and processes they would in the office or at the call centre, through a secured VPN connection. This means that even in the event of a lockdown or if the office has to be closed, the wheels can keep on turning.

Identifying and helping vulnerable customers

Not everyone is going to be devastatingly hit by every crisis. Some will be more affected by others and it will benefit collectors to know exactly who these individuals are going to be ahead of time so they know who to prioritize when the proverbial mess starts hitting the fan. Using the scoring and segmentation tools available in debt collections software suites such as the EXUS Financial Suite, collections teams will be able to pinpoint those accounts that require special attention.

They will also be able to automatically assign these ‘special treatments’ using bespoke graphical strategy and workflow design tools that can automate and simplify the entire procedure. This ensures that resources are being spent responsibly and that those who require special treatment are the ones receiving it.

Ensuring regulatory compliance

Closer scrutiny and calls for greater regulatory compliance have been shaking up the retail banking and debt collections industries for years now and they have had to remain agile in order to adapt. In the event of a crisis, governments are likely to instigate often seemingly drastic and unprecedented measures to maintain the status quo and keep chaos at bay. This could be anything from instigating mandatory debt holidays to ease the burden from stressed debtors, to more stringent regulations.

Particularly in regions such as the Middle East and the APAC, cultural nuances and strict religious laws have always made debt collections tricky business, especially when it comes to Islamic banking. However, because EXUS has spent time working with banks in the areas, they have been able to adapt their collections software to be able to change processes and rules on the fly to adapt to even the harshest regulatory changes.

Self-service ease

Customers are increasingly preferring self-service solutions which allow them to operate with a degree of anonymity in a frictionless manner that cuts out the middleman and significantly improves customer satisfaction as a result. By its very nature, self-service debt collections also allow debtors to essentially act as their own collections agents, which obviously takes some of the pressure off the collections teams and gives the customer more agency over their debts.

By condensing their debts into one easy-to-manage self-service portal, it takes a lot of the stress, complication and hassle out of the process and allows users to use their smartphones and tablets to have direct access to their account. It also allows collections teams to highlight and propose alternative settlement options to their debtors, which is incredibly helpful in the case of a crisis, where everyone who has been affected might be looking for an alternative payment option.

Two-way communication

If customers are in distress then they want the knowledge that they can reach their lenders at all times and that their concerns and worries are being acknowledged. Thankfully, debt collections software is able to work alongside messaging applications such as WhatsApp and even through SMS to send either manual or automated messages to those debtors affected by a crisis, letting them know that they have not been forgotten and that you can work together to figure out how their debt repayments will factor into their new reality once the crisis has passed.

Direct, two-way communication is absolutely vital when it comes to successful debt collections and this includes knowing when to lay off the automated payment reminders and to lend a helping hand. It also means being transparent with your practices and being prepared not only to reach out but also to listen when your debtors actually want to speak to you. Because a problem shared is a problem halved and in a time of crisis, there are always plenty of problems that need halving.

Surviving crisis mode

The world is currently in crisis mode and we have no way of knowing exactly how long it’s going to last. What we do know, however, is that digital transformation has changed the way debt collections operate and has made operating during a crisis that much easier.

Written by: Marios Siappas

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