Engagement in Collections by Sandra Parry

Transcription

1 Engagement in Collections by Sandra Parry

2 About the author Sandra Parry is a leading voice on collections and recoveries. She is an accomplished executive with over 25 years experience in the Financial Services sector operating at board level both in the UK and overseas in organisations as diverse as MBNA and Marks and Spencer Financial Services. Sandra has been working closely with BrightPool on Collections & Recoveries programmes since About BrightPool BrightPool is an established provider of outstanding talent across Financial Services, with a specialism in customer-centric areas of business. We offer a unique approach to talent pooling, providing both individuals and teams using our end-to-end methodology. We enable our clients to mobilise quickly and scale-up large teams on a contract and permanent basis. We offer quality without compromise - with service that goes the extra mile. 2

3 Whether, as consumers, we live in the world of need or want, one thing is guaranteed: either one of the two will always result in a bill. For most, that bill can be paid either at the point of transaction or at a future point in time. For some, completing the payment becomes a challenge and the original transaction results in a debt. In some cases the transaction was based on want, and they were either not in a position to afford the transaction or, it was a change in circumstances that led to the debt. The secret to success is working out which was which and how to deal with the situation. Easy! In Britain today we have become sophisticated at allowing customers to buy on credit, with the growing ability to know all about you from the detailed credit information held on central databases. We can predict the risk we are taking on certain groups of customers, usually known as cohorts, and price the risk, which then translates back in to the price of the product. This concept is true for almost everything we have in our lives today from the cost of private housing and essential utilities through to the luxury items, like diamonds and Rolex watches. With that approach however comes a degree of risk as we rely heavily on the data, and it is true to say that we will never know all about you. Both Regulators and Watch Dogs have been set up to ensure that companies who advance credit in any form act in a professional manner and treat customers both with fairness and understanding. Rules of engagement are nothing new and are designed to protect the customers, however they are complex, impersonal and frequently translate into fear for the lender. As a result of this fear, most organisations now have a robust risk team who are responsible for translating the regulations governing recovering debts. Whilst these regulations guide lenders on the how and what of collecting debt, the risk teams frequently lack staff with previous experience of working directly with customers and overcomplicate the process, which can be frustrating for both the customer and lender. Customers span many age groups and social demographics, so while it can t be said for all, many are used to communicating with business via , text, social media, etc. The regulations demand secure environments, proof of dealing with the right customer, privacy under data protection, along with fair treatment of customers. If we examine what companies do well and what - not so well, it all boils down to technology and the art of communication. DATA Large groups invest heavily in data whether it is their own or from the central The decisions in debt management moved to the risk teams repositories such as those held by Experian. These groups will hire qualified analysts who have studied the theory of data and are capable of building complex models to allow groups to estimate the returns on the debt they are managing, including provision and write off. Data is frequently held in several different repositories and the skills of the analyst are paramount to managing all information effectively without one set of 3

4 Engagement in Collections by Sandra Parry data contradicting the other. Importantly, databases need to be merged into one overarching repository to simplify the work, however knowledge within organisations on how to do it is difficult to source internally. It is often wrongly assumed that the staff have these skills, and competition for analysts is high and the turnover of staff usually exceeds the company average. This leaves not only a knowledge gap in how to build databases, but also creates instability in the models that are used within the operating environment. TECHNOLOGY It is true to say that internal systems simply can not keep pace with the forever changing demands placed upon groups by both the regulators and the change in social behaviour. A system can become outdated while still in development. This in turn requires manual workarounds from the go live to manage the gap created through change in process or regulation. At this stage control is absolutely key, as failure at any stage of the process could lead to customer complaints. Many are poor on control, and this can usually be attributed to lack of in depth knowledge on the process and their assumption that the systems will do 99% of the work and therefore the remaining 1% is low risk. Experience shows that it s the 1% that results in the regulatory failure and the far reaching consequences that follow. Much of the technology deployed on client sites today does not keep up with the current social climate. Data protection needs to be validated prior to the or text being sent, as at the point of debt collection we need to be certain that the customer can accept that type of communication in a secured environment. The need to quickly change regulatory communication, such as changes to T&C s, is becoming more of a challenge. This never ending cycle of change is unlikely to slow down, and serious consideration needs to be given as to how to manage future demands together with their effect on the customer. RISK Failure at any stage of the process could lead to customer complaints Following the major banking crash in 2008/2009 all businesses, regardless of type, started to consider the input of their risk departments and whether they actually were in situ in name only. The decisions in debt management moved from the business operations teams to the risk teams. For many groups that remains the case today and whilst they have valuable input to the interpretation of regulations, they face many challenges: the lack of knowledge of the systems deployed the level of manual controls the fact that at the end of every piece of communication there is a customer (a real human) Decisions made by risk teams are rare and normally agreed by committee of people. More often than not risk teams take a very cautious rather than pragmatic approach to all types of regulation. 4

5 Engagement in Collections by Sandra Parry The regulators and Watch Dogs are committed to treating customers fairly, rarely stating customers must not pay their debt. At the same time, with the constant rise of new players in the market, particularly credit sectors, such as PayDay loans, the regulation becomes more and more detailed. THE OPPORTUNITY With all the sophisticated data on our spending behaviour, ability to repay, whether we rent or buy our homes, how often we move homes, change mobile providers and take on new credit, you would expect a Britain with less debt. In reality, nothing could be further from the truth. Debt collecting is still following the old methods albeit automated and moderately digitized. Without doubt, the real growth area for collections is digital. Technology experts and data analysts are invaluable in this process, however the key skill gap appears when dealing with customers who either have no access to technology or no desire to use it. Experience shows that those who manage data and development do not actually have the core skills required to be able to talk to customers. Right now and for at least the next 36 months, the requirement for staff to communicate with customers remains high. Dealing with customers is difficult and not everyone makes a good collector. There is a misconception that collecting is a service and whilst that is true it does not mean that every agent can be a service collector. They must strike a balance in their role: to get the The requirement for staff to communicate with customers remains high customer debt free as quickly as possible whilst analysing whether they are under pressure or are a vulnerable customer. It s not the regulation itself that poses the problem, but its interpretation by the risk teams. The transfer of work to the risk teams has weakened the knowledge within the collections units resulting in many staff and managers not able to talk to regulators or Watch Dogs. Today s management are increasingly being sourced from service environments or from a weak collections function. The net result is that staff do as they are told without understanding why they are doing it. Real engagement can only be achieved if people understand the entire process; however knowing only part of it allows them to avoid responsibility and accountability for their actions. Training today is usually carried out via a presentation. It needs to become more interactive, allowing individuals to enhance their communication skills, confidence building and for teams to work as single units to achieve the right results. Most successful groups are those who build on each individual s expertise, working as a team to gain results. The industry is in need of subject matter experts to ensure the businesses are able to overcome the latest technological and regulatory challenges. 5

6 How BrightPool can help Setting up a collections and service centre from ground zero to 200 staff in a 6 month period is no easy task and the only way to success is to partner with recruitment firms who can understand and support the business model. Whilst we had several recruitment partners across the UK, none could understand the dynamics of our business, let alone the challenges of operating an Irish contact centre in Scotland. BrightPool were the shinning star in our quest for delivery. The task ahead was to understand our business model, to understand the brand and how to sell that positively in the UK and get a contact centre up and running in 10 weeks from hire to training! BrightPool quickly met with all key players, assessed the requirements, supported with role profiles and set about finding 12 bright articulate collectors who would embark upon a journey in to the unknown. BrightPool not only delivered the first 12 members of the new work force but continued to supply staff through to the full complement of staff being hired. The quality of the first 12 staff resulted in their quick promotion to team managers and senior manager roles. Without BrightPool the entire project would not have been as successful as it is today. Sandra Parry Finding the best talent to implement your collections strategy is critical, as they are the first point of contact between the customers and your brand. Angela Hickmore Angela Hickmore Managing Director +44 (0)

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