After 30 years in the Collections & Recoveries industry, Nick Walsh, Principal Consultant within Arum’s Professional Services team, gives his view on industry best practice.
I am a big believer in Collections & Recoveries best practice – it does exist. But people have often dismissed this and said to me that if best practice exists and is tangible, then why not just write an instruction manual and retire? The challenge is that best practice takes many different forms and must be considered in the right context for the business concerned.
Considerations such as business maturity and sophistication, local market conditions, scale and size, risk appetite, regulation, portfolio profile, budgets and so on all play a part in what can or can’t be done.
What is best practice for the UK’s largest credit card issuer, for example, may not be relevant for a much smaller organisation serving a niche population. One a scale of 1 to 10 with 10 being best practice, an organisation may only need to be at a 7 on the best practice scale – the trick is in identifying, of the myriad of considerations, what they need to be “best” in to provide them with the biggest leverage and advantage.
I’ve consulted in many different countries (and the same will be for different industry sectors within a country), and although it’s a cliché, it’s true that collections is collections no matter where you are.
Organisations need to collect money and to do that they need to be proficient at contacting customers. Whether that is through diallers or automated voice in more mature markets, or by telling a customer’s parents that the son is behind in his payments in less regulated markets; through to consequences ranging from referral to a debt collection agency or a prison sentence, it’s all about optimising results within the constraints and regulations the client has to operate within.
As consultants, this is where we add our value and earn our money. It’s simply not enough to hand over an ‘off the shelf’ best practice blueprint – I would have retired long ago if that were the case.