EVENT SUMMARY ¦ Credit Connect: Collections Technology Think Tank 5.1

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Link: Credit Connect


It was great to be able to chair the Collections Technology Think Tank again, there is always something new and it is great to watch how the thinking is developing.
A couple of themes for me this session, especially; how we are blending human and digital interaction to a much greater extent that we ever were before, the gradual acceptance that more data is being gathered and being used, together with an almost expectation that this will be used to deliver personalised service to help us.

Thanks to Colin, the panelists and all the Credit Connect team for a great event.

Summary

In the eighth edition of the Collections Technology Think Tank series, hosted by Credit Connect Media, industry professionals gathered to discuss the evolving strategies in collections amidst the rising cost of living. The forum, labeled 5.1, aimed to explore the dynamic relationship between technology and human interaction within collections, assessing strategies to address the challenges faced by consumers due to high interest rates and insurance costs. The discussion underscored the importance of customer engagement, the impact of digital transformation on collections, and strategies for addressing affordability and vulnerable customers.

Session 1: Customer Engagement and Collections

Key Points

  • The ongoing cost of living crisis and its impact on collections strategies.
  • The rise in interest rates and insurance costs affecting consumer challenges.
  • The significance of customer engagement in collections.
  • The shift towards digital channels and their role in improving collections outcomes.
  • The necessity of blending technology with human interaction to enhance customer experience.
  • The importance of addressing affordability and supporting vulnerable customers.
  • The role of data and analytics in tailoring collections strategies to individual needs.
  • The potential of AI and machine learning in refining engagement and collections processes.
  • The challenges and opportunities presented by digital transformation in the collections industry.
  • The need for regulatory compliance and ethical considerations in collections practices.
  • Strategies for leveraging digital tools to preemptively engage with customers facing financial difficulties.
  • The importance of continuous learning and adaptation in collections strategies to meet changing customer behaviors.
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Key Statistics

  • The average reading age of the customer group in the collections sector is seven or eight years.
  • Digital engagement in collections has reached a point where it is as significant as engagement through traditional channels.
  • Approximately 47% of all conversations in the collections process exhibit some traits of vulnerability, requiring specialized handling.
  • Conversion rates on digital platforms can significantly impact collections outcomes, emphasizing the importance of understanding customer behavior online.

Key Takeaways

  • The cost of living crisis is directly influencing collections strategies, necessitating a more empathetic and tailored approach.
  • Digital channels are increasingly vital in engaging customers, yet they must be balanced with human interaction to address complex or sensitive issues effectively.
  • Understanding customer behavior through data and analytics is crucial for optimizing collections strategies.
  • AI and machine learning offer significant potential for improving collections outcomes but must be used ethically and in conjunction with human oversight.
  • Training and empowering collections agents to handle complex cases, especially those involving vulnerability, is essential for both compliance and customer satisfaction.
  • Regulatory compliance and ethical considerations remain at the forefront of collections practices, emphasizing the need for transparency and fairness.
  • Continuous adaptation and innovation in collections strategies are necessary to address the evolving challenges faced by consumers.
  • Financial education and support for customers can play a significant role in improving collections outcomes and building trust.
  • The integration of technology in collections processes offers opportunities for efficiency and effectiveness but requires careful implementation and ongoing evaluation.
  • Personalization of collections strategies based on customer data can enhance engagement and resolution rates.
  • Preemptive engagement strategies, supported by data analysis and digital tools, can help identify and address potential collections issues before they escalate.
  • The collections industry must balance the pursuit of efficiency through digital channels with the imperative to maintain ethical standards and provide genuine support to customers.
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Session 2: Affordability and Vulnerable Customers

Key Points

  1. The event addressed customer engagement, future collections challenges, and the importance of affordability assessments.
  2. The role of digital engagement tools and information accessibility for customers was underscored.
  3. Discussion on the blurred lines between affordability issues and vulnerability among customers.
  4. The impact of the cost of living crisis on customer financial stability and mental health.
  5. Emphasis on the importance of early intervention and personalized support for customers in financial distress.
  6. The potential of open banking and data analytics in improving affordability assessments and customer outcomes.
  7. The regulatory backdrop, including consumer duty, influencing collections practices and customer treatment.
  8. Strategies for engaging with customers who are new to financial difficulties.
  9. The significance of training and technology in identifying and supporting vulnerable customers.
  10. Challenges and opportunities presented by AI and machine learning in collections.
  11. The evolving customer expectations for personalized and immediate service solutions.
  12. The importance of financial education and transparent communication in preventing and managing debt.

Key Statistics

  • 75-80% acceptance rate for customers sharing data through open banking for better service.
  • 79% of UK adults are too embarrassed to discuss their financial situation.
  • A significant percentage of customer calls contain potential vulnerability indicators.
  • Improvement in first bill performance and ongoing engagement through data monitoring.
  • The numeracy age of a significant portion of the UK population is equivalent to that of an 8-year-old.

Key Takeaways

  • The integration of digital tools enhances customer engagement and information accessibility.
  • Early intervention and personalized support are crucial for customers facing financial difficulties.
  • Open banking and data analytics offer significant opportunities for improving customer affordability assessments.
  • Regulatory changes, including the introduction of consumer duty, are shaping more responsible collections practices.
  • Training and technology are key to effectively identifying and supporting vulnerable customers.
  • AI and machine learning present both challenges and opportunities for the collections industry.
  • Evolving customer expectations demand personalized and immediate service solutions.
  • Financial education and transparent communication are essential in preventing and managing debt.
  • The collections industry is moving towards more uniform and aligned expectations across different financial products.
  • Consumer Duty forces a reevaluation of customer journeys and outcomes, ensuring better alignment with customer needs.
  • The industry must balance treatment and collections to ensure fair outcomes for customers.
  • Continuous review and adaptation of processes are necessary to meet changing customer circumstances and regulatory requirements.
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