workarounds, and the collector workforce has probably been thinned out over the last few years as the economy has started to recover – bad debt charge is under control and costs need to be saved.
If you are in financial services, you will have invested heavily in staff training to comply with the various requirements of the regulators around TCF and are generally trying to create the perfect customer experience, despite the various constraints you have.
Everybody sends SMS, right? Everybody uses some type of outbound Autovoice in an attempt to introduce some automation and further reduce costs. In fact, there are lots of things organisations have done over the past few years that have been done in the best interests of the organisation and to take cost out of the operation – if the customer was also positively impacted then that was a bonus. These tactical solutions very quickly become a critical process but lack the broader IT integration resulting in even more manual workarounds to get them to work properly – manually producing extracts from dialler files to send accounts to an Autovoice provider for instance, and then having to manually process payments in the back office when a customer has “self-served”.
With the appetite for organisations to reduce costs in recent times, apart from activities to comply with regulators and prove it, there has been less of an appetite for investment in developing collections operating models to take them to the next level.
The global financial crisis in 2008 demonstrated that many organisations in the UK and abroad, were simply not ready for what hit them, and despite the lessons learned since then it is surprising that many organisations have not yet evolved their operating model into one that is far more ‘future-proof’ in the event of a repeat of an economic downturn.
I am not advocating that we will see a repeat of the global financial crisis any time soon, but we can almost guarantee that interest rates will increase. Many consumers may never have experienced an interest rate rise in their short credit experience and many more consumers will be living on a financial knife edge. Any interest rate increase could easily tip them over the edge.
Now ask yourself – regardless of what industry you are in – is your operation ready for a material increase in volumes with a backdrop of cost reductions, increased overheads with compliance, longer collections calls with full I&E’s etc.?
There is no quick solution, but what I hope everyone is working on is a plan to help deal with an interest rate shock. In fact, whatever you call it, there should be a plan that deals with how a material rise in collections volumes will be dealt with. You need to have an operating model that is both agile and flexible.
Financial services companies may already be taking steps that will help as contingency planning based on stress testing, especially as they get ready for future FCA guidelines that involve innovation in mobile and digital communications with customers. If increased volumes can be channelled down a self-service contact channel that a customer prefers then that is a good step forward. As is having outsourcing capabilities, a stable collector workforce, a business rules engine keeping customer treatments within policy, real-time speech analytics to identify training needs and to demonstrate compliance on every single call, and a culture that embraces the importance of the collections function with the customer at its core.
Whatever category you are in and whatever innovations you are working on, one thing is certain – your future operating model is one that has to be built around the customer, with the customer’s best interest at the heart of everything you do. It will have to be one that will allow you to maintain high customer standards regardless of volumes or business constraints. Failure will not be an option.
Nick Walsh, Principal Consultant