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How offering a digital self-serve platform can address debt collection’s pain points

September 17, 2021

With the huge surge of technological developments in recent years, the doors that have been opened to customers with regards to their money is staggering. Individuals are able to take out credit or set up a utility in just a few clicks, doing away with the long tedious forms and never actually having speak to anyone.

Though while customers get to enjoy slick digital journeys when purchasing a product, the UX/UI quickly falls short as soon as they accrue debt and are funnelled into the collections journey, instead being faced with long telephone waiting lines, rigid repayment plans, and potential further fees (which often only aggravate their financially difficult situation).

The answer, however, is fairly simple: introduce a digital self-serve platform in the early stages of collections. This would allow companies that are seeking repayments to not only tackle issues regarding customer experience, but also…

  • Lower cost to collect
  • Accelerate and increase cash collection
  • Identify vulnerable customers sooner
  • Increase compliance
  • Improve customer service, therefore reducing complaints and improving customer retention

The platform would involve an online platform where customers can view the breakdown of their debt, explore various payment plans (such as pay now, pay monthly or schedule a payment), get instant help from support agents and file a complaint. This platform should be well-designed, intuitive and accessible on any device, allowing customers to manage their debt in any place and at any time.

The need for an improved collections model is not just aspirational but urgent. Many individuals’ financial security has become more precarious since the start of the pandemic, the wealth gap is widening, furlough is drawing to a close and utility costs such as energy wholesale prices are on the rise. This all means that the situation is only projected to get worse, for customers and businesses alike.

Lowering cost to collect and accelerating cashflow

Firstly, a digital platform allows for the gap between customer support and collections to be bridged.

Often, there is a lack of synchrony between collections and customer support. It’s perplexing that most utility retailers treat the two areas as two different operations, despite the vast majority of calls being billing related.

Utility customers who take time out of their day to contact a collector will not be in the same camp as those trying to avoid repaying their debt; they are typically unhappy with their bill, wish to speak about their payment method or are confused and are seeking clarification.

Once a customer is satisfied with the result, they usually pay their debt or set up a payment plan for a future payment. It makes commercial sense to combine early collections with customer services and provide an enhanced service to customers.

Utility retailers are unnecessarily inflating their cost base and delaying collections by not deploying technology that enhances the customer experience from the first point of contact and enables information to be gathered to:

  • improve customer satisfaction and retention
  • accelerate and increase cash collections
  • reduce cost to serve
  • improve customer insights for the retailer

By catching customers in the early stages and providing adaptable, understanding support together with the tools to manage their debt themselves via an online platform, companies can prevent debts from escalating to later stages, which can become needlessly costly.

Identifying vulnerable customers sooner and reducing compliance risk

Digital platforms have the advantage of being able to deploy advanced technologies and AI which identify vulnerable customers early on, therefore allowing for better customer care and reduced regulatory & compliance risk.

There is a pressing need to screen for potentially vulnerable customers; the FCA estimates that 1 in 5 financially vulnerable customers are now in arrears.

Post-pandemic the number of people who presently constitute being vulnerable is double what it was a year ago, at 26%, while 56% now consider someone they know to be vulnerable.

At Ophelos, we screen for vulnerability in the early stages by using OLIVE, our natural language processing model. OLIVE works by scanning messages that customers send us (either via our webchat, email or SMS) to flag up potential vulnerability and suggest possible driving factors to our support agents. This allows us to always stay attuned to potential vulnerability and ensure that no customer falls through the cracks.

Improving customer service and putting the customer in control

Indebted customers often have to deal with long telephone waiting lines, annoying IVR messaging and poorly designed online forms. A frustrating experience with a company results in poor customer satisfaction, leading to lower customer loyalty and increased churn.

This can be solved by putting customers in the driving seat, allowing them to manage their debt at a time that suits them, skip the telephone queues and remove the stress from receiving incessant letters and calls from debt collectors.

By making it easier and more attractive for customers to get in touch with channels like webchat, email or SMS, companies can resolve more complaints - and indeed receive fewer. The reduced number of phone calls also means that waiting times are cut and the need for a dialler is removed.

Many customer support centres are struggling to cope with the increased demand due to a host of factors, including the impact of Covid-19. This in turn leads to demand being artificially increased due to customers choosing to call back or use multi-channels to contact their suppliers. Suppliers can make poor sourcing and recruitment decisions based on artificially inflated demand. The use of technology can quickly increase the capacity to manage higher volumes of contact and avoid customers waiting inordinate amounts of time to have their call answered.

At Ophelos we have designed and developed AI optimisation and engagement models to help clients improve interactions and outcomes. The Ophelos Decision Engine allows us to pinpoint an exact date, time and method (email, SMS, letter or phone) by which to contact a customer, based on various criteria including the type of debt, size of debt, product, industry, customer demographics, socioeconomic data and external third-party data from credit reference agencies.

We have also implemented a repayment prediction model, which is able to predict the likelihood of customer repayment during the collections process. This model, combined with our contact engagement algorithm, allows our platform to prescribe debt recovery actions to improve collections success.

Ophelos: a platform that does it all

Whether done in-house or using a DCA like Ophelos, offering a self-serve platform saves time and money for everybody.

One of the benefits of using a digital debt management platform like Ophelos is that it prevents clients from having to invest in a digital front-end, AI and technology at a time when money is tight.

If you are interested in hearing more about our digital platform, why not get a demo?

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