InDebted / Resources / What Makes Digital Debt Collection More Effective

Updated Jul. 12, 2021

What Makes Digital Debt Collection More Effective

The debt collection industry has long struggled with its image, a legacy of the inefficient and antiquated processes that many traditional collectors adopted. Today, organizations that want to meet the needs of their customers - while protecting their brand image - should consider a digital approach, which complements the best elements of the more traditional debt collection agencies. Centered around communicating with customers in the way they want, we explain the key benefits of a modern, omni-channel approach to debt collection.

Potential for Compliance Risks Mitigated

Meeting compliance is a key priority for organizations and one where relying solely on a traditional approach for debt collection may present challenges. This is because when you rely on call centre staff reading the same prepared script to customers, mistakes are more likely to be made as people doing this type of work get tired, or have a bad day and may not take as much care over details. Unfortunately, these types of mistakes can have legal consequences.

We provide a true digital platform, which doesn’t require us to talk to customers unless they want to. Our system is built from the ground up to meet compliance standards and to communicate with customers when it’s compliant to do so using the digital channels of their choosing. Removing the manual elements in this way reduces the potential for any compliance errors. Also, if there are legislative changes introduced into any jurisdiction, these can be quickly updated on the platform.

“The right infrastructure and the right way of incentivizing people is what really minimizes risk. Compliance is a very important benchmark for organizations when choosing a debt collection agency.”

Our robust and automated infrastructure is designed to mitigate and minimize any compliance risk. InDebted CEO Josh Foreman says, “The right infrastructure and the right way of incentivizing people is what really minimizes risk. Compliance is a very important benchmark for organizations when choosing a debt collection agency.”

Digital Remuneration Model Puts Customers Front-of-Mind

Foreman’s point about how staff are incentivized is one of the key factors behind the success of InDebted as it plays a big part in how we treat customers. Many traditional debt collectors are still motivated and compensated based on how much of a debt they recover, and this can lead to some making calls that end up being abrasive or harassing to customers at inconvenient times.

Rather than being commission-based, we incentivize our staff based on how they deal with customers and the net promotor scores they gain. Foreman says, “We have a customer service team rather than ‘collectors’. We encourage our staff to spend as much time as possible with customers to help them sort out their accounts and to improve their financial fitness. We operate on traditional customer service metrics and don’t focus on how much we collect as we view this as a by-product of how we service customers.”

Our approach to customer service not only benefits customers by helping them to resolve their accounts, but also benefits the organization with the overdue accounts. We know that customers who feel they are being looked after are more likely to resolve their account and stay loyal to the organization they do business with, rather than take their business elsewhere.

However, if a customer is feeling harassed by a debt collector’s call centre staff, they’re not only less likely to settle their account but are very likely to leave a negative review on social media or lodge a complaint to the regulator.

Data Decisioning Process Improves Volume and Speed of Repayment Delivery

While a digital debt collection platform provides speed, accuracy and simplicity – especially with allowing customers to self-serve – it offers much more than this, including the ability to leverage the data it collects. Through the controls we’ve built into our platform, we can learn how customers interact with us in real time, and then using this knowledge, build behavioral models that help us decide on the next steps that need to be taken on the individual customer’s journey. 

Gaining a greater understanding of customers can be more difficult for a traditional agency as they have no insights into when customers will respond to a phone call or open a physical letter. They also don’t provide a way for them to easily pay their account.

“Looking after customers in this way requires an omni-channel approach that incorporates all the benefits of a digital process complemented by the best of the traditional.”

Collins says as customers, we all want the personal touch. “Basic human behavior tells us customers want to be talked to respectfully, professionally and they want to be heard,” he says. “Why would this be any different for collections? Personalized collections mean giving customers more than just the ability to pay when they want. It means providing tailored options for each individual that fits with their financial abilities on a daily, weekly and monthly basis.”

Being treated well is beneficial not only for the customer but also for the organization owed the money, as a positive customer experience results in more money being collected. The customer is also more likely to feel favorably towards the organization and will continue to carry on doing business with them. Looking after customers in this way requires an omni-channel approach that incorporates all the benefits of a digital process complemented by the best of the traditional.

Looking to the Future

As technology improves, so do the features digital debt collection agencies can offer. For example, InDebted is focused on ensuring the future developments for its platform will help resolve existing customer challenges, such as a need for greater automation. 

Collins says that currently, every email that comes in is read and responded to by one of the customer service team – and many of these responses are similar as the same questions get asked frequently. “The team has the ability to personalize the responses a little bit but most of the time they are fairly standard, such as telling customers how to make a payment,” he says. “We are now working on automating these standard responses.”

InDebted is also looking at adding simple personalization options to features such as webchat so that instead of needing to go through several questions to get to a person, the first option will be “Do you want to talk to a real person or do you want to self-serve?”. 

“With webchat it can often take a while for customers to get to speak to a person because of the number of questions they have to first answer,” Collins says. “Having that option immediately may sound simple but it adds to the frictionless approach InDebted provides. These features are only possible with a digital agency – that’s the power of digital; that’s the power of focusing on the customer.”

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What Makes Digital Debt Collection More Effective

The debt collection industry has long struggled with its image, a legacy of the inefficient and antiquated processes that many traditional collectors adopted. Today, organizations that want to meet the needs of their customers - while protecting their brand image - should consider a digital approach, which complements the best elements of the more traditional debt collection agencies. Centered around communicating with customers in the way they want, we explain the key benefits of a modern, omni-channel approach to debt collection.