Extending credit to consumers is common for financial institutions, healthcare facilities, and other businesses. It’s a practical way to provide otherwise expensive products and services to customers at a rate they can afford. When all goes well, the customer repays the debt in a reasonable timeframe enabling the company to use the funds at its discretion. However, if an account becomes delinquent, it puts the lender, creditor, or service provider in a jam.
While some companies have collection practices to try and resolve the account, they turn to debt collection services for assistance if those efforts are unsuccessful. Previously, these were brick-and-mortar establishments that used traditional and often aggressive practices to recover outstanding debt. Businesses would pay hundreds of thousands of dollars, hoping the debt collector would help resolve the accounts, only to receive little in return.
The Integration Of Technology
As with all business types, technology integration has helped streamline processes and improve efficiency within the debt collection industry. Agencies that adopt advanced practices and utilize secure digital platforms can provide better services that generate higher recovery rates. Below is a general overview of how this works.
Efficient And Convenient Communication
One of the most challenging aspects of debt collection is contacting the customer. Traditional debt collectors use the US postal service or the telephone for communication. Although they can be effective, most consumers don’t pay attention to collection letters or answer calls from numbers they don’t recognize. Ultimately, they ignore collection efforts for weeks, months, or even years.
Modern debt collection agencies use various mediums to contact customers. They work to identify the consumer’s preferred method of communication and reach out to them through those channels. From mailed letters and phone calls to social media messages and online chat features, they contact consumers on the most convenient platform, improving the chances of recovering their debt.
Data Analytics Finetune Consumer Experiences
When you know your customer, their preferences, purchasing behavior, and risk factors, you can better assess how to work with them to resolve their past due accounts. Debt collection agencies use analytical tools and resources to compile as much information about your customers as possible.
The right platforms can disclose data such as the customer's contact information, payment preferences, pay history, and financial status. Debt collection agencies can use this data to determine the best way and time to contact a customer, when the customer is most likely to have money to pay the bill and even what circumstances caused the customer to fall behind. A well-trained agent will translate this information into a strategy to resolve the account in a manner that works for the customer.
Online Accounts Put Customers In Control
Debt management should be an easy process for consumers. Suppose you have to call a debt collector during business hours to ask about your account balance, switch payment sources, or address other concerns. In that case, it can be frustrating, causing you to postpone recovery efforts.
Modernized debt collection agencies understand the importance of having financial control. With technology integration, they have comprehensive platforms where customers can create online accounts and manage them from their computers or smartphones. They can review the account balance, evaluate the payment options, select a feasible plan, store a credit card for automatic debits, make adjustments, and even chat with agents online for assistance.
However, the increased risk of cybercrimes comes with the advancement of technology. As federal and local lawmakers crack down on establishments to keep consumer information secure and private, the need for high-tech cybersecurity solutions becomes apparent. Today’s debt collection agencies utilize state-of-the-art security technologies and practices to ensure that consumers’ data remains secure and out of the hands of thieves.
When dealing with past due balances, customer service and experience matter. Although you’ve already provided your product or service, treating the customer professionally and respectfully is essential to resolve the issue. It’s also crucial to offer convenient ways for customers to access, afford, and repay their debts. As you can see from above, modern technology has done great things for the debt collection process enabling agencies to communicate, negotiate, and assist consumers efficiently and conveniently for improved recovery rates.