By making the digital debt collection process self-service and real-time across all digital channels, you can make better returns and provide a better customer experience.
With interest rate increases on the horizon, and the increasing focus of regulators on customers being treated fairly in all areas of financial services, the way that organisations carry out their debt collections will become more and more important.
Many UK organisations have debt collection software and recovery processes that do not utilise the full range of strategies that a comprehensive digital approach can deliver. Debt is still regarded as a significant stigma – it’s embarrassing for customers to receive a call and have to explain themselves to a stranger on the phone. Customers are much more comfortable self-servicing through web sites and mobile apps.
By employing an effective digital debt collection solutions strategy, lenders can help deliver a better and more efficient customer experience with an improved return on their cost to collect. Our experience at IE is that putting control over repayments back in customers’ hands, by making the process self-service and real-time across all digital channels, delivers better returns and a better customer experience.
Give customers back control over their debt
Digital debt collection platforms like Interact enable lenders’ customers to repay debts at their own rate, setting up direct debits that suit them, and also offer the customer the ability to make a ‘promise to pay’ by a certain date. By taking the human element out of the debt collection process, lenders can give their customers the sense of control they feel they lack in controlling their borrowings, and instil the confidence that will encourage them to return the next time they need to borrow.
With the Financial Conduct Authority (FCA) planning to cap payday loan rates, the extent to which the overdue balance can grow (to twice the original loan), and the cap on default charges, payday lenders are going to have to embrace more cost effective channels to address defaulters and those in arrears.
And it’s not just payday lenders that will need to refine their debt collection practices. Banks, near prime credit cards, store card creditors, credit unions, and all other debt collection agencies will find that digital self-service is more remunerative than sending letters and chasing debtors with calls. Those are the debt collection processes of the past, and not how customers should be dealt with in the digital age. Lenders now need to ensure their debt collection processes reflect their own values, by providing customers with simplicity, transparency and control.