Recouping unpaid debts is not always easy. From outdated information to gaps in communication, a whole host of reasons make debt recovery a hard business to manage. Fortunately, technology and tools can smoothen most wrinkles debt recovery businesses face.
How Does Digitising Help Manage Your Debt Recovery Business?
A McKinsey survey found that 73% of customers in the delinquency stage make a payment when contacted digitally. It is proof enough that by streamlining through fintech solutions, lenders can reduce losses stemming from common problems like wrong contact methods.
Let’s unpack how a digital solution can help you manage your debt recovery business better.
A single source of truth
A single source of truth ensures that everyone in the business bases decisions on the same data. By using a digital solution, you can aggregate customer information from multiple sources in one place. It gives you a singular, rich customer view, helps you understand them better and recover more.
How? The thorniest challenge in debt recovery is lousy data quality. By the time customer information reaches a debt recovery business, it has travelled so much downstream that it is polluted.
As the data passes through many systems, mistakes happen, and gaps grow. Digital solutions bypass this issue. They keep all contact information up to date. So, you never end up talking to the wrong person or dialling a number that doesn’t exist. Moreover, locating hard-to-find debtors and collecting unpaid loans becomes easy!
Better customer profiles
Every debt recovery business knows that without an accurate, clear customer profile, you’re at a grave disadvantage. Analytics and intelligent bots that mine data from every possible digital source like insurance records can help you build accurate customer profiles.
These profiles include everything from balance history to preferences to time past the due date. Using these digitally built profiles, you can create tailored debt repayment options, or even answer queries, and provide required advice.
Improved contact strategies
When businesses get in touch with customers, it is best done through digital channels. Why? Because that’s what today’s customers favour. The rule applies to debt recovery businesses too.
Digitising helps you refine contact strategies by successfully identifying which channel a customer most prefers. For e.g., not every customer will be comfortable with an email. Some would like a live chat and others a direct message.
The digital solution gives a clear picture on which customer prefers which channel. So that you can deliver a tailored message using the right medium. Moreover, you can do it in the right sequence.
Since most of these contact points are automated, you don’t spend a lot in creating an omnichannel strategy. Rather the return is much higher in the form of happier customers and more recoveries.
Gives self-service capabilities
The current digitally-savvy customer is self-reliant. They like to do everything on their own. It is why they prefer an impersonal channel such as texts over personal mediums like calls.
By digitising your debt recovery business, you give customers self-service capabilities. Think virtual collection agents supporting real-life ones. By incorporating a DIY service, you’ll improve customer satisfaction, lessen business costs and increase repayments!
Keep an eye on debtors
Fintech can help you track debtor accounts. So that when those who’ve gone into arrears become more financially sound, you can immediately start working on collecting unpaid balances.
For example, say one of your customers purchases a car and also pays off one of their loans. Traditionally, this information would trickle down to you molasses-slow. With a digital solution, you’d have access to it immediately. It would tell you that the customer is in a position to repay and right now would be the best time to get in touch!
Automated outreach processes
A digital solution is not just for big debt recovery businesses. In truth, it is the small teams that benefit more from automating services. Why? Because by automating the outreach process, the team can get in touch with a larger customer pool.
It means your service volume increases, sometimes exponentially. And that’s not the only advantage. Automation aids you in testing different strategies and then implementing the one that works best. For example, does changing the subject line open more emails or is there an optimal time to send a text or notification.
By making small tweaks in written copy or send time, you can compare which one shows more deliverability and engagement results. And that translates to higher recovery rates!
Accurate risk prediction
A digital solution that banks on AI manages your business better by analysing more and richer data sources. Couple this with machine learning algorithms, and you can predict the credit risk of a customer to a very high degree of accuracy. Together, they ensure that defaults don’t happen.
For instance, let’s say Mr X has been steadily delaying his utility payments. Information from social media shows that he’s receiving half his salary for the past few months due to COVID-19 fallout.
Merging this data, which is what fintech solutions do, gives you a clearer picture. The customer is in financial distress. Instead of waiting for him to become a delinquent, you can take a proactive step. Offer him a new repayment option, one that his current pocket can afford. In the end, your business recoups some of the loss, if not all!
A Digital Solution For Your Debt Recovery Business
Credit card balances have increased by 40.7%, as compared to last year’s 29.8%. Considering the present economic condition, more borrowers are likely to default on payments. As a debt recovery business, now is the time to invest in a good digital solution.
Finezza offers the perfect delinquency management solution – our Collection App. It dramatically simplifies your field recovery process and increases the rate of debt recoups.
There is no need for outdated receipt books or issuance paperwork. The app digitises processes allowing collection agents to access all customer information in real-time quickly. Among other features, the app offers PTP and location tracking with collection updates available on the web and mobile.
Moving beyond delinquency management, we deliver an end-to-end mobile ecosystem to you. The tech facilitates all requests, optimises conversion funnel and even detects potential defaults.
When you’re ready for it, get in touch to digitise your debt recovery business!