If your debt collection firm isn’t using analytics to predict consumer behavior you’re at risk of falling behind.
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It’s no longer surprising that digital technology has disrupted every industry, including debt collection. From new data-driven software to internet security and workflow automation, tomorrow’s debt collection firms will look nothing like the local Mom and Pop agencies still mired in workflows straight out of the 1990s.
This post looks at how tech is impacting the debt collection industry. Browser-based platforms and multichannel collections processes are enabling professional firms to contact debtors where they live — online.
Digital Debt Collection
Business Wire published a press release from Technavio recently citing their published report on some of the latest software trends impacting debt collection. The report suggests the following trends as drivers of new tech in debt collection:
- Increasing pressure for CFOs in every sector to improve their bottom line – including accounts receivable.
- A desire by most companies to reduce the amount they spend on debt collection, which is the impetus both for outsourcing the process and for debt recovery agencies to adopt new technology to cut costs.
- Consumer trends that show us fairly addicted to cell phone technology and the internet.
- Increasing regulatory requirements at the local, state and federal levels have created a need for software that automates the compliance process, which protects both the debt collection firm and their client.
- The worldwide proliferation of malware threatening client data in transit and at rest.
- The necessity of improving customer relationships even during debt collection.
These trends have spawned a variety of digital disruptors in the form of technology that has impacted what has been a fairly traditional industry. They include:
- The rise of browser-based platforms focused on omni-channel collection efforts that include debt collection by traditional means (letters and phone calls), and now, if opted in, email, as well as easy-to-use online portals for debt repayment. This allows a consistency of communication to consumers, a greater opportunity for automation, as well as customer personalization that allows debt collection agencies to reach consumers in their preferred channel and with preferred payment options.
- The introduction of sophisticated data analytics tools that allow debt collection firms to closely analyze consumer behavior and the market trends driving that behavior. These analytics can help debt collection firms cull out consumers that will be more likely to pay all or a portion of their debt.
- More stringent data security protocols and procedures to help keep consumer data safe from nefarious attacks.
Debt collection agencies must continue to embrace technology to stay competitive while leveraging data analytics to improve their efficiencies, stay compliant with applicable law, and protect critical client data.
To find out more about how TSI’s technology can impact your accounts receivable, contact us.
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