Four Technology Must-Haves for Debt Collectors to Drastically Improve Collections Rates
From 24/7 online lending to ubiquitous credit offers, debt has become a permanent presence in our society. This has created a huge surplus of collections efforts when borrowers default on their financing. Yet the challenges have also increased, as debtors use mobile call blocking and other efforts to avoid contact with collectors.
Debt collectors can harness technology just as easily for their needs, however, and with dramatic results. Let’s explore four of the most influential technology tools debt agencies can use to improve their collections rates drastically. Some may require an entirely new way of looking at your business model, while others offer a low barrier to entry with simpler solutions.
#1: Big Data
Using big data analytics can not only increase your collections rates, but it can also lower your overhead costs. This information can get incredibly granular by estimating potential impacts of different business decisions that could be made. Because huge amounts of data can be analyzed all at once, you greatly decrease the odds of inconsistent data. The result is the ability to offer informed repayment terms, rehabilitation options, and individual settlement offerings.
When your collection agency uses big data across the organization, you’re likely to see a jump in recoveries as well as a drop in costs. It’s certainly worth the initial investment of money and internal culture shift.
#2: Predictive Analytics
Supplementing collections with predictive analytics can change the way you strategize your entire process. New technology powered by artificial intelligence can analyze collectors’ calls and identify the common threads for successful conversations. From there, you can set informed and accurate performance metrics as well as provide script suggestions and coaching for your callers.
Predictive analytics can also help to prioritize the debtors who are more likely to pay. Rather than blindly targeting those with the largest balances, you can instead look at predictive models to increase your collections.
#3: Social Media
While debt collectors can take some heat if you have an active social media account, you can use these platforms to help trace debtors—if you have a clear policy on how it should be done.
Deception isn’t allowed, meaning you can’t pretend to be someone else or asking for something unrelated to collections. It’s also recommended that you disclose your company and purpose right away if you choose to contact someone over social media. Additionally, you can’t publish any private information concerning the debtor or the debt itself, and you shouldn’t post directly on someone’s page where it can be publicly viewed. In short, avoid posting on people’s Facebook walls or publicly tweeting at someone.
Once you have these regulations down, social media can be a huge aid in finding debtors and improving your collections rates. There is a lot of information available through public forums, including geographic locations and work information that can add new life to your agency’s collection process.
#4: Payment Options for Unbanked Segments
Unbanked individuals amount to 15.6 million people in the U.S., and that number would grow significantly if you add the underbanked as well. If you’re collecting on unsecured debt, it becomes increasingly difficult for this part of the population to pay because they primarily rely on cash for all financial transactions. Is your collections agency set up to service this customer segment beyond accepting money orders in the mail? Most, unfortunately, are not.
Luckily, PayNearMe offers a way to connect collection firms with the unbanked by allowing them to pay at convenience stores and other popular retailers across the country. Debt collectors benefit greatly from this service because it allows people to pay their debt or settlement on their own schedule while removing the collector’s burden and the slow timeframe of receiving a money order in the mail. Removing as many barriers as possible for the payment process can go a long way in maximizing your collection efforts.
For debt collection agencies to truly thrive in the 21st century, they must incorporate high-tech features at touchpoints throughout the company. From analyzing debtors and perfecting the script calls to creating an easy payment process for the unbanked, you have plenty of ways to increase your collections rates.