This is a question that I and Arum have been increasingly asked over the years and quite a bit more recently.
The answer we gave to the retail banks and utilities that are the bulk of our clients used to be pretty straightforward, say 15 years ago. Obviously there would be some important variations based on sector, business strategy and business case but the answer would have been something like “One of the ‘big-four’ market leading collections systems tightly integrated with your product systems, with interfaces to produce letters, MI and to a dialler.”
That is not the answer we are giving to those asking us this question just now as the credit world and therefore debt collections and recoveries systems requirements have changed.
So what has changed?
The first thing that has changed for the better, for ever, is the environment in which debt collection and recoveries operate. Creditors of all kinds now have to treat customers fairly and prove it.
The second thing is that customer expectations have transformed and will continue to evolve rapidly. Expectations include not only to be treated fairly, but that they can communicate with ease at a time and on a channel of their choice. Consumer expectations are being set by new technology and the best collections functions will be up with or ahead of these trends.
Finally, in most organisations collections and recoveries has gone from being an afterthought, the need for which was an unfortunate consequence of doing business, to being something of vital interest to the Board due to the real and potential impacts possible on P&L and stakeholder reputation.
As a result the vision of what ‘best-in-class’ in debt collection and recovery looks like has now changed for many organisations.
The systems to support the new vision in the future will be more sophisticated and superbly integrated. They will enable the collections function to be insight driven, leveraging good quality data. They will enable customers to feel as if they are in a ‘segment-of-one’ and interact in a way they wish – ‘self-serving’ if they want as a response to selected outbound stimuli. They will also monitor compliance both with external regulations and internal policies.
“Sounds great, but how much is it going to cost?” I hear the cynics say.
The answer may be quite a bit initially due to historic under-investment in collections systems in many organisations. However the good news is that the technologies available have leapt forwards. Just a few examples include: better versions of established collections workflow systems and many new market entrants; IVR with natural voice; gamified online tools; new payment options; sophisticated analytical tools and more/better data to analyse with them; collector desktop decision support tools; speech analytics; and interactive channel capability. Some tools may be hosted in the cloud.
I would say that if you want to be best-in-class in collections and recoveries you don’t necessarily need to have the ‘Rolls-Royce’ in every tool but you do need to carefully select the instruments that your business does need to create the right collections systems harmony. Perhaps most importantly however there needs to be sufficient appetite and strategic understanding in the organisation to make the business case to get and maintain what is needed, based on the P&L and stakeholder benefits that will accrue.
The technology then provides a number of enablers for a business to take its collections and recoveries infrastructure to the next level and to completely revisit the whole operating model with the customer at the heart – but that’s for another day……..