5 ways to empower the customer through the debt collections process

empower_customer_debt_collections_process

The last decade has seen a tremendous emphasis on customer service and convenience in banking.

Today, customers are able to bank online – and this doesn’t mean just checking their balance. They can make payments, save, apply for loans; all at the touch of an app icon.

It’s strange to see how far loan collections and debt recovery have lagged behind this shift to customer-first operations. But things are beginning to change. Many banks – as research by Gartner group shows – are now turning to technology to bring collections into the digital customer engagement area.

As we’ve written elsewhere, a client focus in debt collection isn’t a merely nice-to-have; it’s a central component in attaining and maintaining a high return on equity. These changes needn’t be extreme or hard to implement.

Here are a few you could begin implementing in the relatively short term.

Call centres

Call centres are, by now, a ubiquitous feature of the debt recovery process. They’ve also become notorious among consumers for adding to the problem, rather than helping to solve it. Research by Nesta last year found that 91 per cent of consumers reported having to contact a company multiple times for the same reason and 90 per cent surveyed reported being on hold for too long.

As impaired loan ratios soared post-2008 (and have remained high), customer service suffered as many call centres became overwhelmed. The traditional approach couldn’t keep up.

This is why 24/7 online solutions are such an important addition to your recovery process. When consumers are empowered to help themselves, your call centre staff are freed from the burden of fruitless pursuit.

Instead, your call centres can be repurposed and refocused. Not all debtors are technologically inclined either - sometimes you just need to speak to a trained person. Well-trained call centre staff should always be on hand to help resolve problems and help walk customers through repayment options.

Communication channels

The call centre dilemma touches on another critical issue for your debt recovery efforts: customer sentiment.

Even if your call centre makes contact, the customer, who is probably at work, is unlikely to settle there and then. Modern consumers are more averse than ever to speak on the phone, let alone willing to discuss a topic as tough as debt.

For consumers, chatting, messaging and email are much less intimidating. The perceived threat of conflict is minimised, and if your customer feels less threatened then they’re more likely to engage with you.

Chatting – in the era of WhatsApp and Facebook Messenger – comes altogether more naturally than a phone call. Providing modern communication methods might be what your organisation needs to get impaired loans back on track.

Self-service portals

Perhaps no industry has embraced a self-service ethos quite like banking. It’s quite rare, these days, for a customer to visit a branch. It isn’t necessary: most things you need can be done online, including loan applications.

The trend toward self-service isn’t just in banking. These days we’re talking about ‘the self-service economy’ in sectors as diverse as retail, restaurants and software. It’s a trend that’s been necessitated by consumers’ ever-increasing expectations around service. 

As these continue to grow and your bank’s employees are stretched, self-service becomes the only answer. Luckily, a wealth of products and solutions exist to cater to this consumer trend – even in debt recovery.

Debtors want to settle their debts quickly and satisfactorily and could simply be unaware of their options. The question for banks isn’t how to make customers pay: it’s how to make it easier for them to do so. Self-service is the answer.

Customer experience

On the surface, it seems a little odd to approach debt recovery from a customer experience perspective. If a customer has become delinquent, they’re obviously not having a good experience, right?

Customer experience being central to every stage of the customer life cycle – including and especially when they’re struggling to repay their debts.

It’s a time when your customer needs you the most. Providing the right tools and services for them to salvage their debts can easily blossom into a positive interaction. By utilising apps and self-service technology, you can put customer experience front and centre.

The collection isn’t a place where you exile bad customers. It’s after-sales support. A clunky, unfriendly experience could cost you a good, loyal client. After all, it costs five times as much to attract a new customer than to keep an existing one.

Ask them

You don’t ask, you don’t get. Customer surveys are a simple but highly effective way to understand exactly what your customers want and what they think of your debt recovery and collections.

The key here is asking your customers in a non-intimidating survey environment. The more private, the better. Consumers are more likely to provide honest feedback when they feel safe.

Online surveys are the easiest way to create this atmosphere. After all: where’s more non-intimidating than your customer’s home?

A well-executed survey allows you to learn about what motivates your customers and what’s important to them, and gather meaningful opinions, comments, and feedback.

Conclusion

Debt recovery can be a win-win situation for your customers and for you, the bank. Instead of punishing delinquent debtors, the process can help struggling customers, bringing them back on board.

Thanks to technology, it’s never been easier to do this. By aligning debt collection to consumer needs and customer service, debt recovery can be accessible, simple, intelligent and exciting.

It’s a vision of debt recovery that we’re immensely excited to share. You and your bank could be a part of it, too.

 

 

EFS

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