Telecom consolidation is sweeping Europe. It’s causing concerns about competition and regulatory scrutiny. And there are more considerations than ever for telecoms navigating the changing landscape of collections and recovery. Within telecom companies, consolidation may strengthen business long-term, but in the here and now it can create:
Collections departments at consolidating firms sometimes face obstacles that impact performance. The good news is that with specific tips, your organization can identify and overcome these challenges to improve efficiency and capture more revenue from collections operations. Below, we’ve outlined some potential pitfalls and strategies to handle each one.
Modern dunning cycles, from activation to delinquency, are complex. The lifecycle of a payment obligation produces more data and risk than ever. Customers also use more channels to engage and potentially have multiple obligations.
Consolidation only worsens the problem, as business lines merge. While keeping an eye on the bigger picture was important before, it is absolutely critical during and after consolidation. Information about customers, paperwork related to payments and risk-related insights may come from many different sources and stakeholders.
Without smart organization and centralization, consolidating telecoms risk losing key information and collections opportunities.
Centralizing all information, insights and documents is key. At the start of a customer relationship, employ an activation system (AS) with document management capabilities.
Given how complex payment origination can be, an AS tracks important information throughout the payment cycle, improving origination efficiencies and delivering insight into customer subscriptions during later stages and delinquency.
The organization must be paired with accurate reporting. Consolidation introduces more stakeholders, decision-makers and influencers into business decisions and operations. These individuals need smart insights to mitigate risk and effectively drive revenue—especially in tougher market conditions and stricter regulatory environments.
Unfortunately, too many organizations miss out on identifying pre-delinquency signs and important changes to risks because they don’t use the right tools and processes.
Deploy an early warning system (EWS). An early warning system combines internal and external data to inform decision-makers about risks. It includes both quantitative data from risk-scoring models and tools, as well as qualitative data from collections professionals.
Using this information, pre-delinquency warning signals are identified and weighted according to their severity. They’re used to create watch lists, which collections departments monitor in an effort to proactively prevent delinquencies.
With different company processes, priorities and collections methods competing with one another during and after consolidation, delinquent accounts may be mismanaged. Modern collections and recovery demand that the right offer be made to the right customer at the right time. Gone are the days where a series of phone calls would suffice—and it’s becoming harder to reach customers by phone.
Failing to take advantage of the various communication methods and platforms used by multi-channel customers reduces the chance of success and often damages customer relationships. Failing to apply the right pressure across delinquency stages also damages business outcomes.
Modern collections have four broad delinquency phases:
In the two early phases, soft and pre-litigation, companies should aim to preserve the customer relationship. This improves performance and reduces the number of cases that move to later stages. In the latter two phases, litigation and recovery, the focus should change to protecting your company’s assets and minimizing losses.
The result? At any stage of the credit lifecycle, your telecom successfully overcomes these three major pitfalls—and can possibly avoid one or more altogether.
EXUS Financial Suite (EFS) is collections and recovery software the covers the entire credit risk management cycle, from activation to delinquency. With EFS, telecoms are able to better manage risk, achieve business goals and capture more revenue from dunning operations. Find out more here.
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