Credit Today Conference

As an industry, it is widely acknowledged that debt purchasers and collectors are not always recognised as offering a great ‘customer experience’.  Whilst the dynamics of an organisation responsible for collecting debt cannot be championed as gracious, it is vital to engage with clients and customers in such a way to maximise the opportunity for equitable solutions.

At the recent Credit Today Collections and Debt Conference, the term “Can’t Pay/Won’t Pay” was used by several of the delegates when discussing attempts to develop customer profiles – separating debtors from those who can’t but want to repay from those who simply refuse.  This is a key area as it has a real affect on how an organisation will then attempt to recover debt, and if this segregation is incorrect it can lead to an ineffective and costly recovery process.

A speaker at the conference, Oliver Betts, Head of financial services & asset sale at TDX group, described his efforts at developing segregation and a deeper customer profile by adopting a strategy of “obsessive capture of data at every point in the process”.  The requirement for data collection covered all key areas such as customer profiling, outcome, and performance (KPI’s such as penetration, yield and roll rates) and provided the organisation with the analytics from which to shape itself for success.

The right approach to data collection, and using this management information to develop effective customer profiles, provides an organisation with the ability to match recovery processes to segments for greater efficiency – this will also improve the overall experience for the customer as they are targeted with the right methods for debt repayment.

Having a purposeful data repository is also an important factor when a lender considers selling or outsourcing a debt to a DCA (Debt Collections Agency), as without the customer profile the DCA could potentially undervalue the debt due to the work involved for them in subsequently building the customer profile from which to deploy their own collections strategies.

Collecting the right data at the right level requires intelligent operations management. eg has developed a range of products within its eg operational intelligence® software suite that captures and transforms the detail of every activity and interaction with a process or customer into a three-dimensional view of your operation.

In a collections area, data captured real time at agent activity level can provide managers with the ability to determine the true cost of debt recovery administration. A good example of this comes from within one of eg’s large retail banking clients who have sold part of their debt book to a DCA, but still administer the collections activity internally alongside their own books.  The use of eg operational intelligence® software in this client enables the segregation of each book, as well as the profiling of customers. A key benefit is the separation of administration costs, skills, and resources across both books and the accurate recoup of the administration costs from the DCA. The automated data captured can also used to determine the overall cost of debt recovery per account, a significant measure when determining which debts to sell or outsource.

Another eg client has applied data collection within their collections area to improve the performance of agents by measuring roll rates (early arrears through to late arrears), right party contact and outcomes. Individual performance is expected to increase by measuring at process level allowing the organisation to meet their overall recovery targets year on year.  To add balance within this operation, the client will also be collecting qualitative data to ensure improved performance does not come at the expense of expected customer experience standards – both measures will then be utilised for individual performance appraisals and bonus payments.

For more details on eg’s approach to achieving sustainable operational improvements within collections, arrears and debt management areas, contact me – adrianharvey@eguk.co.uk