Digital engagement is emerging as the leading strategy in debt collection.
A quiet revolution is taking place in the financial world, all thanks to digital engagement. It's a world where the cold call of debt collection is warming up to the human touch, powered by none other than our friend, technology, and more specifically, debt collection software. With the push from recent global upheavals, the dusty old playbook of debt collection is getting a digital makeover, blending empathy with the sharp smarts of AI to change how we talk about money owed.
Here, we explore the transformative role of digital converstational AI messaging in debt collection, offering insights into balancing digital and traditional approaches for optimal outcomes. And how collection agencies can innovate for the future.
At the centre of this approach is a principle that seems almost revolutionary for the sector: empathy. The recent times of increased financial stress has thrown a spotlight on the need for a softer touch, revealing just how crucial a bit of understanding can be. Lenders are now forced to find new and better ways to manage their relationships with an ever-increasing vulnerable customer base.
During this time of economic uncertainty, a company's first step is to really see their customers, and to understand their challenges.
It is a time that calls for more than just demands for payment; it requires a conversation.
Reaching out to at-risk customers and acknowledging their difficult situations is a good starting point for many collection agencies.
“Expressing empathy becomes very important because of the fragile climate. We had to adapt to the new ways our customers wanted to interact with us and we had to find a balance between empathy and cost-effectiveness.” Gary Moffat, British Gas
And as we dive deeper into this digital sea change, we find that it's not just the youngsters who are swiping and typing their way through debt discussions. Digital was once the realm of the young. Not anymore. We're seeing people of all ages taking to digital platforms. It's a shift that's making these chats easier, more efficient, and surprisingly, more human, even as AI is often the first point of contact.
Finding ways to make difficult conversations easier increases engagement rates and has a positive impact on cash flow. Allowing customers to use digital channels like web chat, SMS, WhatsApp, and other forms of digital communication also increases productivity.
Having a digital option allows customers to communicate with you 24/7 rather than just the previous standard business hours. They can now log on in the middle of the night and make a payment or work out an arrangement with a fully automated chatbot.
“Digital conversation is asynchronous. An agent can handle anywhere from eight to fifteen conversations at a time. Digital will blow any of your efficiency metrics out of the water.” Mark Oppermann, CFO & CMO at Webio
However, companies are not throwing out the phone just yet. Mixing digital with a bit of the human – that's where the magic happens. It's about giving people choices, ensuring they can engage in a way that feels right for them, making the whole process a bit more palatable.
Part of getting the right balance is driving down call centre costs. Using the right combination of voice and digital channels is a win-win on both sides: more customers are reaching out to you and working out payment arrangements while fewer representatives are needed to staff call centres.
Businesses are going to have to use a combination of different channels to find out what works for their customers. And then give them a secure and safe environment to move at their own pace.
When consumers have more ways to communicate with you, it gives them a sense of control over a very uncomfortable situation. That sense of control on when and how they engage can lead to more positive outcomes.
“Technology is great,” Mark added, “but sometimes you have to strip away the tech and just think of your customers as people. Make it easy for them to engage with you.”
Adaptability seems to be the buzzword when discussing innovation and future engagement. And no doubt, the future is ripe for innovation. The Covid pandemic, while a time of challenge, was also a catalyst for change, forcing everyone to adapt to new ways of living and working. And with AI and automation ready to take the lead, we have stepped into a new era in customer engagement.
According to Mark, AI and automation will be the next drivers of innovation. “When people are forced to do it, they do it. Then they wish they had done it sooner.” He also noted that implementing automation would lead to a reduced headcount in call centres, but reiterated that everything won’t be handled by chatbots. “You can’t use the same approach for every channel. The right channel will depend on the right time and the right customer.”
So, what does all this mean for the future of debt collection? It's not just about getting back what's owed; it's about forging lasting relationships. This is more than just collecting debts, its about education, about prevention. It's a journey towards not just more efficient debt collection, but a more understanding and empathetic approach. And in this brave new digital world, that's something worth talking about. As we look towards the future, it's clear that digital engagement using debt collection software will continue to play a pivotal role in debt collection strategies.
Amon Ghaiumy of Ophelos said:
“Collections is the first step, but the best organisations are building upon the relationship. They’re using this opportunity to educate and rehabilitate. Long term, it will become about prevention as opposed to collection.”
For more, see:
Automated Debt Collection Software: A Double Whammy of Effectiveness and Efficiency in Customer Engagement
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