COVID-19 forced businesses of all kinds to undergo a dramatic shift in operations due to the changes needed to provide safe working conditions. Most of these changes required a hard pivot away from an in-person work environment and rapid adoption of new technology. For the collections industry, which has been slower to modernize vs. other industries due to compliance hurdles surrounding communication, these moves were especially difficult. Now over a year in, with work environments starting to return to normal, the landscape for the industry looks much different. Nearly 10% of agencies had to close or were acquired by larger organizations in 2020, illustrating the importance of technology as a core competency for third-party collections partners.
Prior to the pandemic, technology was a major concern for the industry. In a 2019 report conducted in partnership with TransUnion, the strict regulatory environment was identified as a key contributor to the industry’s difficulty in keeping pace with standard technology innovations. A primary example of how failures to modernize were negatively impacting operations, was the inability to evolve with consumer communication preferences. An agency incapable of establishing contact beyond traditional (i.e. voice call or direct mail) efforts is at a severe disadvantage.
At that time, 85% of consumers preferred omnichannel engagement from any business; that is a blend of digital and traditional communications a trend that was only exacerbated by the pandemic. Studies conducted in 2020 cite that as many as 70% of consumers prefer contact via means other than traditional calls. This is reflected by our own internal study, Comparing Traditional and Digital Payments, in which we saw a sharp rise in digital payment adoption at the onset of COVID-19 which has held steady since.
Aside from omnichannel communications, several other technologies have proven capable of lowering costs, improving recovery rates, and creating a better consumer experience.
Self-Service Portal
Online portals provide consumers the transparency and convenience they require to take control of their financial obligations on their time. Providing a means to monitor and pay accounts online reduces the number of inquiries or payment-related calls necessary by live agents, lowering FTE costs. Additionally, consumers are given flexibility and privacy to handle their debts while still having the option to contact agents for support when needed.
Automation
Automation can be adopted to lower the cost and ensure accuracy for a variety of internal collection processes. On the long list of internal tasks are right-party verification, batch processing, account segmentation and prioritization, and monitoring for financial changes that could improve a consumer’s ability to pay.
Speech Analytics
Speech analytics technology is becoming more and more common practice for any business which deals heavily in phone-based communications. The technology has the ability to monitor not just the language being used but also the tone and acoustics which make up emotional content— offering a 3-dimensional impression of individual interactions that can be measured for quality without the necessity of manual auditing. For collections, engaging in call analysis has a wealth of benefits, from ensuring compliance by flagging calls for risk language in real-time, to improving coaching and assisting in the development of more effective and consumer-friendly strategies. Currently, only 18% of collection agencies are utilizing this technology.
With new advancements and applications of technologies like these surfacing every day, agencies that are already behind the curve have little opportunity to play catch up. That’s why continuous investment in technology should be a primary focus when considering a collection partner…
When your collection partner invests in technology, they are investing in the future of both your organizations.
Learn more about Professional’s Technology