Once again it was great to host the latest Credit Connect Technology Think Tank. There was some really insightful discussion and ideas this time around.
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Session 1: Collections Communications and Engagement
Key Takeaways
- Transition towards digital-first customer engagement strategies in collections.
- Emphasis on customer control over engagement and account management.
- Integration of open banking faces challenges in consumer trust.
- Shift from outbound calling to more efficient digital communication methods.
- Importance of personalization in customer communication for better engagement.
- Utilization of real-time events and triggers to capture customer attention.
- The need for hybrid approaches combining digital and human interactions.
- Process design plays a crucial role in effectively implementing digital strategies.
- Long and complex calls may become more prevalent as simpler issues are resolved digitally.
- Data consolidation and integration are key for seamless customer interactions.
- Importance of empathy and understanding in customer conversations.
- Continual evolution towards omnichannel or hybrid communication methods.
Innovative Techniques and New Ideas
- Using hyper-personalization to enhance customer communication.
- Implementing real-time event-triggered communications.
- Combining digital and human interactions for complex cases.
- Utilizing marketing techniques in debt resolution communication.
- Converting voice call data to text for better analysis and understanding.
Key Statistics
- Calls are approximately 60-70% longer post-consumer duty implementation.
- Only a minimal uptake of open banking in collections was observed.
Key Discussion Points
- The shift from outbound calling campaigns to more effective digital channels.
- Customer reluctance to use open banking for affordability checks.
- The role of empathy and understanding in customer service.
- The increasing importance of real-time data and event-triggered communications.
- Challenges of integrating multiple digital and communication channels.
- Personalization of communication to increase customer engagement.
- The importance of a holistic view of the customer journey.
- Process design is a critical factor in successful digital transformation.
- The need for ongoing training and tools for agents managing digital conversations.
- The impact of consumer duty on call lengths and customer interactions.
- The future role of AI and language models in customer communication.
- The importance of maintaining a human touch in digital-first strategies.
Session 2: Collections Risk Measuring Affordability and Vulnerability
Key Takeaways
- Importance of Understanding Financial Behavior: Effective collection strategies require a deep understanding of the financial behaviours and psychological states of customers.
- Scarcity Mindset: Customers facing financial difficulties often enter a scarcity mindset, leading to suboptimal financial decisions.
- Open Banking Data: Utilising open banking data can significantly improve the understanding of customers’ financial situations, enabling more tailored support.
- Role of Collections Agents: The role of collections agents is evolving to become more empathetic and advisory, akin to a critical friend.
- Automation and Technology: Emphasis on using technology and automation to provide clear, actionable insights to customers, particularly younger generations who prefer digital interactions.
- Consumer Duty: Regulations like consumer duty are pushing firms to ensure fair treatment and clear outcomes for customers, focusing on affordability and vulnerability.
- Communication: Clear, simple communication that resonates with customers’ understanding is essential for effective collections.
- Personalisation: Tailoring approaches to individual customer needs, rather than using a one-size-fits-all model, can lead to better outcomes.
- Training and Empowerment: Investing in training collections agents to handle complex cases with empathy and providing them with the mandate to make decisions.
- Long-term Planning: Recognizing that the cost of living challenges are not a temporary crisis but a new normal requiring sustainable solutions.
- Balancing Empathy and Objectivity: Finding the right balance between being empathetic to customers’ situations while maintaining the objectivity needed for financial decision-making.
- Behavioural Economics: Applying principles of behavioural economics to understand and influence customer decision-making in financial distress.
Innovative Techniques and New Ideas
- Behavioural Economics in Collections: Implementing strategies based on behavioural economics to better understand and influence customer decision-making.
- Open Banking for Enhanced Insights: Using open banking data not just for affordability checks but also to provide customers with a clearer picture of their financial habits and potential adjustments.
- Professionalising Collections Roles: Increasing the expertise and decision-making power of collections agents to handle complex customer situations more effectively.
- Visual Data Representation: Presenting financial data in visual formats to help customers better understand and manage their finances.
- Robo-Advice in Collections: Exploring the potential of robo-advice in providing automated yet personalized financial guidance to customers in distress.
Key Statistics
- 27% of the population has engaged in risky financial behaviour.
- 63% of these cases are due to rising bills.
- 47% increase in loan success when utilizing ongoing open banking data for affordability checks.
- 80% of customers are willing to share their data through open banking journeys during loan origination.
Key Discussion Points
- Cost of Living Crisis: The ongoing impact and its evolution into a long-term financial strain.
- Vulnerability Definitions: The broadening definition of vulnerability and its implications for financial services.
- Empathy in Collections: The need for collections agents to act as empathetic advisors rather than mere debt collectors.
- Technological Integration: The role of technology in streamlining collections and providing clear data to customers.
- Consumer Duty Regulations: The push for fair treatment and clear outcomes in financial services.
- Behavioural Economics: Understanding how scarcity mindset affects financial decision-making.
- Data Utilization: The importance of leveraging open banking data for better financial insights.
- Customer Engagement: Strategies for engaging customers effectively, especially through digital channels.
- Personalization in Collections: Adapting collections strategies to individual customer needs.
- Training and Empowerment of Agents: The benefits of investing in highly trained collections agents.
- Short-term vs. Long-term Financial Decisions: Helping customers balance immediate needs with long-term financial health.
- Role of Visual Data: Enhancing customer understanding through visual representation of financial data.
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