Overcome the 3 Major Challenges to Efficient Debt Collections
Healthy long-term customer relationships are vital to success. However, in debt recovery, balancing a good customer rapport while maintaining your bottom line can be challenging.
Debt recovery services often struggle with recuperating receivables from borrowers without pushing boundaries. Delayed communication can result in constant calls and repeated follow-ups to meet deadlines, which can do more harm than good.
Here are the three significant challenges that hinder debt recovery agencies’ operations and how to deal with them proactively, rather than react to them after they arise.
Lack of Reliable and Updated Contact Information of Debtors
Modern living is about constant flux. People lead busy lives and are frequently on the move. For a debt recovery agent, tracking a debtor who is always on the go and touching base can be challenging. Even if the debtor is not actively trying to dodge repayment, without the latest contact information reaching them even for a friendly reminder can be difficult.
One way to tackle this problem is to have a multi-channel contact strategy. Maintaining an alternative communication database, email ids, mobile phone numbers, guardian or guarantor contact can provide more options to reach out. Data transparency and verification at the time of documentation are also vital. Technology can be a powerful skip-tracing partner to track down customers whose means of contact has changed from the one in your database.
Collection Methods Are Not Real-Time
Every debtor is different, from their willingness to honor payments to their ability to do so. Similarly, debt recovery services also differ in their strategies. However, an industry-wide pain point for collection is the lack of a real-time system to recover dues. Real-time collaboration among the collector, lender, and borrower is necessary to improve collection rates while ensuring smooth customer experience.
Recovery agents need to work in tandem with lenders to build different repayment plans for various debtors and scenarios. Agents can suggest a settlement or go for programs that will benefit both parties. There can be cases where a collector cancels the interest and the debtor enters into a new arrangement that enables him/her pay off the due amount. The success of the activities mentioned above depends on the complete background information on a debtor. Agile insights into debtor’s history and real-time decision making are therefore critical.
Large Turnaround Time in Sorting Through Data and Locating Debtors
Having too much information on a debtor can also be a roadblock to effective debt recovery. Sorting through a gamut of phone numbers, addresses, and social media profiles can be time-consuming and expensive, sometimes even becoming irrelevant at the time of action.
Instead of expending extra effort on trying to determine which information is relevant using traditional verification methods, an efficient debt recovery agency can do the initial heavy lifting for your business. Debt recovery services have AI and analytical software that can sort through massive information, employ the latest trace-and-contact methods, and verify their efficacy to improve your success rates. Advanced software can segment customers based on specific factors like amount outstanding, history of repayments, chances of repayment, etc., which help prioritize debtors, formulate targeted collection strategies, and maximize recovery for customers.
The 360º Allsec Approach
Allsec Technologies has years of experience and deep domain expertise in debt collections. Our approach combines four critical aspects of debt collection that balances empathy with higher success rates.
Contact Management Analytics + Segmentation Analytics + Inventory Management + Technology Innovation = High Collectibles
Our cradle-to-grave debt recovery services employ the latest skip-tracing technologies in the market, innovative communication strategies, and data sanitization techniques to provide the best recovery rates. Our numbers are a testament to that: 60% market share among all vendors, 100% penetration, and 100% compliance with all legalities.
With our services, you can recover more debt while retaining healthy relationships with your clients.
Allsec delivers highly personalized and robust digital services that provide a winning edge in the industry. Starting from customer support services to technical infrastructure, our end-to-end solutions allow you to transform debts to high collectibles. Reach out to us for more information.