In the classic movie “The Wizard of Oz,” Dorothy steps out of her house after experiencing a tremendous storm and says, “Toto, I’ve got a feeling we’re not in Kansas anymore.” The same revelation applies to the collection industry, which has been weathering severe social and economic conditions. As your collection organization emerges from the other side of this storm, you will be stepping into a dramatically altered collection environment. Welcome to our new reality.
This changed environment represents a significant shift in how you engage in collections going forward and will require organizations to react, adapt, and engage quicker. Success will be much more dependent on your collection software’s capabilities. Your collection software system will need to provide a higher level of agility, responsiveness, control, usability, and automation than what was previously required. Also, your collection software system will need to fully support “omni-channel” collections. That ability to connect and interact bidirectionally through consumers’ preferred communication channels – telephone, email, text, portal, mail, and mobile app.
Does your collection system have what it takes to help you succeed going forward? To answer this question, you first need to understand what collections will entail. Based on recent trends and market conditions, collection organizations will face:
- Increasing complexity – a more dynamic collection environment that fosters increasing operational variables and requires more significant innovation and creativity
- Rising collection volume – waterfall effect of the declining economy that is affecting incomes and bill payments, and ultimately drives up delinquencies
- Shifting work environment – more agents working from home, resulting in more collector training, discipline, and operational management
- Growing risk and oversight – expanded remote working and use of third parties, requiring a higher level of data security, closer monitoring, and more detailed tracking and audits
- Changing collection engagement approach – Fewer outbound calls and more inbound calls, geared more toward “payment advisement” and options, including deferrals, modifications, and plans
- Expanding compliance – more collection limitations added to the plethora of existing industry and government regulations, whether federal/central, state, and/or local
- Evolving customer communication channel preferences – increasing consumer demand for digital channel communication, requiring leveraging of old and new communication methods to interact with multiple generations
Many existing software platforms do not provide all the features and functions needed to support collections as the landscape changes. For many collection operations, these limitations or missing capabilities may have become more apparent as they scrambled to adapt to business conditions stemming from the impact of COVID-19.
One such shortcoming is the need for enhanced information security in conjunction with agents working remotely. Many on-premise collection systems were not designed to securely protect and manage personal information outside of on-site operation centers.
On the other hand, modern collection systems – especially those developed to run in the private cloud – are designed to provide the needed level of information protection and privacy for performing collections, regardless of where these efforts occur. Another shortcoming of many collections systems is their lack of a robust set of seamlessly integrated digital channel collections capabilities. Ongoing social changes and new economic conditions have dramatically accelerated the use of digital channel communication capabilities by consumers and businesses alike.
Collection operations everywhere are revising their plans and strategies. Ensuring your collection software has all the requisite capabilities to help your collection operation succeed is critical. When conducting a collection software assessment, consider the following recommended collection software features and functions.
- Cloud-based – built for the cloud to take advantage of the associated lower costs, higher performance, added security and no client IT resources
- Anywhere access – provides collectors with quick and easy access to the collection system to perform their collections from anywhere they have internet access and a browser
- Do-it-yourself collection system administration – enables system administrators to easily make system-wide configurations without IT or vendor assistance
- Real-time processing – immediately updates all data, events, and actions
- Interoperative functionality – seamless integration and frictionless processing between functions throughout the collection software platform
- Advanced automation – increased automation capabilities that alleviate manual processes and back-office activities, and minimize collector keystrokes
- Enhanced compliance management tools – more management controls and easier auditing of workflows, strategies, and agents
- Agent/team real-time KPI dashboard – continuously updated desktop displays of KPIs and performance targets with views based on specific roles in the organization
- Embedded digital channel messaging – seamlessly integrated SMS and email capabilities for more efficient and compliant desktop and automated workflow message execution
- Seamlessly integrated self-serve collection payment portal – providing a more compelling portal experience through features that increase consumer empowerment and convenience
- Omni-channel collection and communication orchestration – centralized setup and management of all customer collection strategies and customer communication channels for more cohesive, effective, and compliant collections
- 1-to-1 collection strategies – easily design and apply more refined collection strategies and repayment options that better align with each debtor’s situation and communication preference
Without modern collection software capabilities, many collection operations will struggle to collect in the new collection environment. Those with deficient collection software will be hamstrung in their ability to perform more effectively and efficiently. As such, the collection arena will split into two camps, those with sufficient collection software capabilities – the “haves” – and those who do not have all of the necessary capabilities – the “have nots.” The “have nots” will be forced down a path of declining collection results and rising expenses that lead to significantly reduced or closed operations. Meanwhile, the “haves” will be better able to achieve higher levels of collection performance, despite operating in an increasingly more difficult and challenging world.
About the Author
Robert Fite has compiled more than 25 years of experience in the credit and collections industry with extensive expertise in decision management software tools, credit data, risk scoring, and collection technology. He has held leadership positions with Experian, Fico, and LexisNexis, and has worked with hundreds of lenders of all types, sizes, and credit products, throughout North America. He can found on LinkedIn at www.linkedin.com/in/robert-fite-3003494.