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Going Digital is Not Optional

With COVID-19 going Digital on Collections is NOT Optional


The COVID-19 crisis has pushed businesses to adapt to new working models and has seemingly provided a sudden glimpse into the future world, one in which digital has become central to every interaction, forcing organizations further up the adoption curve almost overnight. In a world in which digital channels become the primary customer engagement model, debt collection is no exception. The pandemic has changed the world forever with people working from home and online communications becoming accepted as part of daily routine. Businesses must address this paradigm change by going digital for their own survival.


The Digital transformation is disrupting the financial services sector today and creating two worlds, namely traditional and FinTech. Increasing data-driven trends in fintech have cut across traditional financial services in banking, equity, and debt collections.


Further, the impact of COVID-19 on debt collection and imminent defaults have necessitated a digitally driven, standardized approach to ensure collection management efficiency, process consistency, and reduced customer anxiety.


Traditional debt collection challenges & how digital debt collection approach helps


The traditional approach for debt collections requires associates to constantly call or email customers for debt collections. Most of the organizations do not have the resources to analyze their customer’s profiles, leaving associates to contact all types of customers (defaulters and otherwise) without any prior information and intimation, leading to suboptimal results.


The traditional approach also demands that associates constantly call debtors or meet them in person until the collection is made. Overdue debts accentuated by default charges, repossession, and lawsuit threats strain the relationship between the debtors and collectors, irretrievably destroying them in many cases.


Although traditional and digital approaches are miles apart from each other in the way they approach their businesses, the end goal remains superior customer experience (CX). However, lack of clear visibility into customers’ debt, an indifferent approach to collections, stringent collection strategies, and manual collection processes result in poor collection yield and higher cost of collection.


The Debt Collection industry is undoubtedly in the need of digitalization and automation of recovery processes, the top 3 reasons for the digitalization trend in debt collection:


  • Customer retention: Digital payments empower the consumer.

  • Cost saving: Digital debt collection is cheaper.

  • New innovations in Fintech make it possible now.


We have found that consumers prefer communication via SMS and Email with a link to pay online to a call from an agent. Our customers have seen a significant increase in retention rate since they ENCollect as a digital debt collection technology.




Financial Institutions that manage high debt volumes are looking for ways to collect debt faster and cheaper, thus reducing internal costs significantly. Customers using ENCollect have reported a cost reduction of up to 10% after redefining their internal business processes and incorporating automated debt notification channels such as SMS and Email.


ENCollect™ debt collection and management system has helped many businesses not just to adapt but transform faster and thrive in these challenging times. ENCollect™ is bridging the digital gap in debt collections for businesses that would have taken years to close.


Going digital helps businesses to get key insights in real-time. Key data points help businesses to assess the situation and visualize the reality.



ENCollect™ has helped over 55 customers across 3 continents take the right step towards digitization of the debt collection process. Being at the forefront of this transformation, ENCollect™ has helped them establish a goal-oriented approach and improve customer experience, some of the ways ENCollect™ has helped are:


  • Enabling them to Drive customer-centric collections: Today’s customers seek authentic and personalized communication. With the ENCollect™ Communication module you can ensure that the customer preferred channel is used for sending the messages and you can customize the communications and determine time and frequency to reach debtors swiftly.

  • Maintaining compliance: Regulatory concerns have been on the rise year on year and ENCollect™ all the regulatory compliances are met, with ensures proper Data backup and recording of all the trails.

  • Crafting customized insight-led solutions: ENCollect™ provides a 360-degree view of customer’s accounts and interaction details, leveraging data from all available sources such as credit data, social profiles, and financial history. This data can be used to define clear category segmentation and aids in devising strategies with custom-made requests and recommendations. While in conversation, associates can have a single-view customer dashboard that helps them push relevant repayment options, recommend plans, and streamline communications.

  • Omnichannel approach to collection: ENCollect™ helps finance companies create an effective omnichannel approach across multiple customer touchpoints such as emails, calls, SMS, and others. Key engagement at the various touchpoints leads to faster collections and reduced operational costs.

  • Improving operational efficiency: With ENCollect™ you can review historical customer interactions and use it to provide key insights into managing the real-time issues during customer interactions. Using data-driven research makes the debt collection process more goal-oriented, customer-friendly, and accelerated, helping improve operational efficiency.

All in all, the digitization of collection processes significantly increases the success rate in debt settlement and positively supports the return of the customer to the client base of a company, because he does not feel threatened by debt collectors. Moreover, the digital processes contribute to personnel and time savings, as well as enable individual service offerings, such as small volume orders.


ENTiger’s ENCollect™ is a Digital Debt Collections platform, which is underpinned by the ‘Digital First, Digital Now & Mobile First’ approach. It leverages diverse technologies, including automation and cloud-based services through a combined people and technology transformation framework. This in turn helps drive down the cost of collections to as low as 3% and enables better recovery rates.


Customers want to feel that the businesses they work with care about them. Debt collection is as much a service for collectors as it is for the millions of consumers in debt, and creating a positive, efficient, and empathetic experience for those struggling with their finance’s benefits everyone.


Digital debt collection strategies are more reliable, more effective, and less risky than traditional models that have remained the norm for decades. No matter where you turn, the future is digital, and debt collection should not be any different.


References:

https://www.weforum.org/agenda/2020/10/digital-transformation-or-bust/

https://digitalmarketinginstitute.com/blog/what-is-the-cost-of-not-going-digital-for-a-business#:~:text=1)%20Lose%20relevance,sea%20of%20fast%2Dmoving%20strategy.

https://kineox.com/en/why-is-everyone-talking-about-digital-debt-collection/

https://www.exlservice.com/reimagining-debt-collections-for-utilities-harnessing-the-power-of-data

https://www.trueaccord.com/digital-debt-collection/

https://www.firstsource.com/blog/digital-debt-collections-fintech-success

https://www.pymnts.com/personnel/2019/nacha-names-new-ceo/

https://blog.trueaccord.com/2020/04/debt-collection-software-vs-digital-collections-agency/

https://www.exlservice.com/reimagining-debt-collections-for-utilities-harnessing-the-power-of-data

https://finleap.com/insights/digital-debt-collection/

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