In the United Kingdom there is an estimated £5.2 billion of debt remaining uncollected by local authorities. Of course because of the impact of the COVID-19 pandemic, this figure is likely to rise. A ‘single customer view’ of debtors is a powerful way for government agencies and local authorities to collect debt in a fair, productive and efficient manner. And when combined with innovative omnichannel text and email communications, the collections process is expedited and streamlined for all parties.
What is a Single Customer View of Debt?
Single View of Customer (SVoC) is a means to optimise the collections process, by managing and presenting all data relating to an individual customer in a single location. This means government agencies and local authorities can have access to complete, holistic and accurate data relating to each of their citizens.
The Local Government website stresses the importance of the role of data and analytics in the collections process: “Analysis can also identify stress points in the consumer’s regular finances and help avoid the demand for payment at particularly difficult times. Effective use of this data can also help the consumer to agree manageable payment arrangements with other creditors. The key benefit of all this is that the need to use enforcement agents with potentially vulnerable people can be dramatically reduced, whilst collection rates increase”.
What About Omnichannel Texts and Emails?
Digital channels are essential methods by which to pursue debt recovery. Automated payment reminders work when delivered via the most popular communication channels, namely texts and emails. According to the State of Collection 2019, email is the most commonly used digital communication method (beating SMS text messaging by 45%), but they both have the potential to improve collection rates dramatically. Text and emails can be sent via automation, or manually. Quick and instant engagement which requires no human labour is cost effective and productive. And crucially, when combined with the power of the data in a ‘single view of debt’, the collections process can become fairer and more effective.
Ethical Considerations in the Collections Process
Debt collection pursuits are often harsh, cruel and lack nuance or understanding. Chancellor Rishi Sunak elucidated his concerns recently when he said: “The current guidance for local councils on collection of council tax and enforcement processes when people have fallen into arrears might not be helping to improve collection rates overall – and may also be contributing to individuals’ debt problems”. A single view of debt is a means by which collections teams can be empowered by information and data to make better decisions and support their citizens. Single payment plans, which incorporate an individual’s total debt, can be created. And solutions can be found which suit an individual’s precise circumstances. A single view of debt is all about vision.
The debt collection industry is in the midst of rapid change. The powerful combination of automated text and email correspondence, when coupled with a single customer view, will help organisations of all sizes develop and implement a powerful and successful collection strategy. Get in touch with Lateral today to learn how we can help you reach this goal.