The years 2020-2022 witnessed hiring freezes, interest rate hikes, and supply chain issues which heavily impacted inflation. With more financial stress and decreased disposable income, consumer debt continued to rise. The collection strategy for 2023 should involve staying current with the changing times in order to streamline collections, maximize cash flow, and maintain a healthy relationship with customers.
As we move into the new year, Mr. Mackenna, General Manager – Operations, has identified the top 5 emerging trends that CEOs and business owners must keep an eye on for successful debt collections.
Greater focus on customer service
As industries recover from the turbulence of past years, companies are recognizing the importance of treating debtors with respect and empathy. Good collectors focus on providing clear and accurate information to customers about their debt, accommodating their preferred mode of communication, and working with them to create payment plans that are manageable for them. We delve deeper into our strategy to help businesses collect effectively with empathy in this eBook. Read on if you need expert advice and success stories.
Increased use of technology
According to a Gartner study, 70% of customer engagements will be driven by intelligent systems. We believe that the debt collection industry shall be no different. Increased digitization and AI automation over the past years have facilitated the industry to leverage data analytics and data mining techniques. This allows agencies to better understand customer behaviour, segment contacts as per their likelihood to repay, tailor collection strategies accordingly, and increase the chances of successful collections.
We also expect companies to blend innovative new-age technologies like Chat-GPT that enable chatbots to mimic human conversations with human ingenuity to maintain a humane touch even in automated customer interactions.
Alternative payment methods
The use of alternative payment methods is gaining popularity across industries and good agents should not miss out on collection opportunities simply because the agency does not offer the payment mode preferred by the customer. This is why debt collectors are increasingly offering non-traditional payment options such as digital wallets, Google Pay, Apple Pay, PayPal and more in order to make it more convenient for customers to pay without delay. In the near future, we expect most collection agencies to even accept cryptocurrencies as a viable payment method.
Outsourcing
As companies look to cut costs and focus on their core business, many are turning to debt collection agencies to handle the recovery of unpaid debts. This allows them to offload the work of debt collection to experts, freeing up their own resources to focus on other areas of their business.
International debt collection
With the growing global economy, the trend of international debt collection is also on the rise. As companies do business across borders, they may find themselves having to collect debts from customers located in other countries. This can present unique challenges, such as dealing with different laws and regulations, as well as cultural and language differences. Outsourcing through reputed debt collection agencies would provide optimum results in this scenario.
Takeaway
The overarching pattern is that debt collection is becoming increasingly technology-driven, with companies using a variety of tools and techniques to improve their chances of success. At the same time, there is a growing emphasis on customer service, as well as on compliance with regulations. As we move into 2023, these trends are likely to continue to shape the debt collection industry.
