In conversations with collections professionals from the energy and water industries, it would seem the answer to this question is yes. Those operating outside financial services could claim to have particular constraints around supply of service, data sharing consent and statutory collections processes. The challenge is how do they measure their effectiveness unless their current procedures are tested against alternatives?
If you are constrained to use legacy central billing systems that are clearly not designed to support the collections function, how do you make a business case to employ modern tools and systems?
What are the differences?
This different industry sector of business produces a difference in culture to financial services, with more emphasis placed on reducing debt through reduced demand. At the same time, moves are in place to rebrand collections as “payment acquisition” or “resettlement departments” as a way in which to improve customer engagement. The question is whether those tactics are proving effective since there is an average debt over £600 never being pursued and millions of pounds being written off each year. A major difference between Utilities and Financial Services is the level of delinquency they are prepared to accept.
What are the shared goals between industries?
The increased level of vulnerability within society, its recognition, and strategies to provide support for such consumers is something shared across all sectors. Utilities will also have to implement the government’s Breathing Space initiative along with all other consumer credit suppliers. The energy sector has made considerable progress in recent years through the development and adoption of the Priorities Service Register, with the Water industry now following suit.
Having strategies to provide consistent responses to vulnerable circumstances is shared with Financial Services. But being unable to contact and identify still remains a challenge for Utilities, with some businesses having up to 20% of their portfolio non-contactable. The change in society, exacerbated by the pandemic, is the increased use of digital communication—either through SMS, email or self-serve portals. The lesson to learn from Financial Services is the way they have embraced that change by adopting technology which allows them to communicate with their customers, in a way and at a time, when they are ready to engage.
How do you change?
If a business is unable to contact and obtain a response from a customer, it will not be able to measure the effectiveness of any strategy. It won’t be able to rebrand its collections department or encourage use of smart meters, and therefore will be unable to fulfil the potential of those strategies or test challengers. Simply put, if the level of response is weakened by large numbers of non-responders (who probably mirror the delinquent portfolio) then you will be unable to measure effectiveness.
To achieve this level of communication needs, at the very least systems must connect to a host system, or legacy collections system, that can provide the above-mentioned range of digital communication. To make gains in consistency, productivity, that are measurable and compliant – this process needs to be supported by high levels of automation, especially with greater numbers of agents working from home.
A modern, fit for purpose collections system will provide most of the following features:
- Consent capture and communication channel contact tracking
- Intelligent, conversational two-way SMS that allows the customer to communicate when and how they need to
- Optional choices within customer portals for self-registration, classification, and uploading of evidence of a vulnerable condition to the portal as well as the ability to download forms and documents from the portal
- Omni-channel collection enabled leveraging both existing communications and new digital methods seamlessly
- Advanced workflow, rules, and process automation for strategy management
- High levels of information security, protection, certification, and business continuity
- Platform-wide real-time processing, tracking, updating, and reporting
What is the answer?
The new breed of collections software that provide modern, flexible platforms with embedded digital communications and an integrated self-serve portal should be your next investment. Such systems are now available without up-front capital investment or license costs and can be obtained on a “pay as you go” basis.
The business case for such an investment is higher levels of customer service, early identification of vulnerability and of course an improved bottom line, with incalculable millions of pounds avoiding write off. The overarching business case is if organisations fail to reflect their customers and society in general (in terms of their preferred methods of communication), they will not survive. When operating on a level playing field, the Utilities sector can then benchmark itself across all sectors and all stages of the customer journey.
Readers of this article who have worked in the collections industry through previous recessions will know that now is the time to invest. By investing now in people and systems it will ensure that your business will fit for whatever the future may hold.
About the Author
Following an executive management board role with an operating subsidiary of Lloyds Banking Group, Bruce Turnbull has spent the past 20 years providing collections management consultancy services to a number of blue-chip lending companies including Courts International, GE Capital and Provident Group.
More recently Bruce has served as Managing Director of two UK operating subsidiaries of CoreLogic, Inc. (NYSE: CLGX), a $3 billion-dollar global data, analytics and related services company and is currently a Director of the Vulnerability Registration Service.
This article has been brought to you by Telrock, a global technology provider of SaaS-based on-demand collections software solutions that serves major lenders, processors, and BPOs across Europe, Asia & North America through their offices in London and Atlanta.
Telrock key solutions serving the collections market include:
- Optimus, an enterprise-class integrated collections & recoveries platform, and
- SmartCollect, a digital channel messaging and engagement service with a consumer self-service portal for collections and customer
For more information, contact:
North America: Rob Fite at +1-678-451-9975 or rob.fite@telrock.com
EMEA: Nigel Young at +44 (0) 207 183 1573 or nigel.young@telrock.com
EMEA Business Consultant: Bruce Turnbull at +44 (0) 7971 418 914 or bruce.turnbull@telrock.com