As the full impact of the COVID-19 crisis unfolds before us, many sectors are facing unprecedented strain. A pro-active approach to debt collection is more important than ever for local authorities, government agencies and organisations of all sizes. Being pro-active is about creating or controlling a situation rather than just responding to it after it’s happened. So when it comes to taking a pro-active approach to debt collection, what are the top tips?
1. Timing
Research by Princeton psychologists Janine Willis and Alexander Todorov shows that it only takes is one tenth of a second to form an impression of a stranger. So the first few seconds on a telephone call are certainly crucial. Agents should access previous correspondence and information via debt collection software, and view the minutiae of the debtor’s circumstances in real time. Collection CRMs can access borrower information from several data exchange APIs. This approach results in good client relationships and positive results.
2. Be Adaptable
Adaptable workflow generators are a pillar of effective debt collection software. By adapting and modifying strategies across cases, geographical locations and debt types, organisations can continually improve their collection performance and stay pro-active.
3. Contact Strategy
Successful debt collection processes are predicated on a strong contact strategy. Traditionally those pursuing debt have made contact via email, text messaging, posted letters and telephone calls. More recently a more digital approach has proved effective. An omni-channel approach via mobile apps and social media has reaped greater rewards than the labour intensive approach to calling landlines and mobiles. Research has shown that when debtors are empowered to choose their preferred contact channel and method of payment, results improve.
4. Single View of Debt
It’s now possible for local councils and government agencies to invest in a ‘Single View of Debt’ portal; providing them with an holistic view of the total debt that an individual owes. This holistic approach also helps organisations see the bigger picture when it comes to debt recovery, and it serves as the most useful starting block to help individuals pay off their total arrears. With a single view of debt local authorities can make accurate, evidence-based decisions and transform their performance.
5. Default Risk Prediction and Forecasting
Those seeking the most pro-active approach to debt collection must harness the power of Artificial Intelligence (AI) and Machine Learning (ML). Customised machine learning prediction solutions can provide organisations with preliminary indicators of financial default risk. The adoption of this dynamic tool is powerfully pro-active since it empowers its users to stay ahead of a default, and thereby their competitors. In simple terms, it works by leveraging machine learning to provide decision makers visibility into the probability of default.
Lateral offers the most flexible and robust CRM and debt case management on the market. Our debt collection software boasts over 700 plugins which integrate with various diallers, SMS and letter sending companies so that everything is tracked. In addition, with our award-winning Decision Engine, Lateral is able to automate more tasks while creating more intelligent workflows. Get in touch today and try a free demo.