The future of collections Digital collections and the consumer

Transcription

1 The future of collections Digital collections and the consumer

2 Introducing: Don Taylor ACSI Andrew Beddoes Experian Paul DeSaulniers Experian

3 Contents 1. The rise of the digital consumer 2. How to engage with the digital consumer 3. An integrated digital strategy 4. Consumer engagement technologies 3 Experian

4 The future has already arrived. It's just not evenly distributed yet. William Gibson 4 Experian

5 Total credit card charge-off dollars, $ Billions Consumer debt Regulatory trends Regulatory uncertainty and pressure CFPB limits call attempts FCC ruling one and done 15% Vendors are an extension of financial institutions Client trends Banks keep debt in-house Third party consolidation Subprime credit card lending is up Sub prime auto lending is up Experian

6 The seismic-shift to digital has changed how consumers interact with their providers Consumers are hyper-connected and have numerous preferred channels Multiple touch-points lead to a purchasing decision A personalized, consistent experience across channels is the new standard Multi-channel customers are increasingly the most sophisticated, demanding and time-starved customers;. Deloitte Consulting Demand for frictionless and seamless customer experience 6 Experian

7 The growth of digital Mobile (U.S. adult population 87% have a mobile phone 71% of mobile phones are smartphones 52% of smartphone owners with a bank account have used mobile banking 22% of mobile phone owners have made a mobile payment in the last 12 months Image source: Wikimedia Commons 87% of Millennials already use mobile banking 71% of this generation believe mobile banking will transform their banking experience Have you transformed the collection experience to account for this change? 7 Experian

8 Generations of consumers Millennials Gen X Baby Boomers & Silent National Avg. VantageScore Text 625 Text 650 Cell Phone 709 Cell Phone 667 Debt Cell $ 52.1 Phone k $ k $ 87.4 k Landline $ 88.3 k Cell Phone Text Debt excl. Mortgage $ 26.5 k $ 26.7 k $ 19.2 k $ 23.1 k Social Media Est. Income $ 34.4 k $ 50.4 k $ 46.3 k $ 46.8 k Bank Card balances $ 3.4 k $ 6.8 k $ 5.6 k $ 5.3 k Bank Card utilization 43 % 41 % 25 % 34 % Millennials Gen X Baby Boomer Silent (age 19-34) (age 35-49) (age 50-68) (age 69-87) 75 million 66 million 75 million 28 million Source: Gallup (The New Era of Communication Among Americans). 8 Experian

9 Millions The takeover of the Millennials Millennials Gen X Baby Boomer Silent 2014 x xx Experian

10 Connecting with the digital consumer 10 Experian

11 Elevate collections into the digital age Manual collections practices Consumer in the digital world # Frictionless consumer experience Digital (mobile and web) Non-threatening Resolution-driven At the convenience of the consumer s place and time Self serve / cost effective eresolve No Caller ID eresolve gives your clients a digital communication channel 11 Experian 4/14/2017 Experian Public Vision 2017

12 eresolve process Debt resolution options Pay in full Payment set-up Invite consumer link Web site Text link Get started View debt details Consumer logs in Pay in full in 1 payment Pay in full over time Defer payment up to 14 days Negotiate to pay less Settle in 1 payment Settle over time Defer payment up to 14 days Counter offer Multiple options to resolve Several attempts to negotiate Offer accepted Consumer has already accepted the payment plan Client-consumer agreement Regulation E disclosure E-signature Payment portal Summary Debt details Debt resolution details Payment schedule Client-consumer agreement 12 Experian 4/14/2017 Experian Confidential

13 May $ $ Adam K Fellow 2017 adam@sample.com 13 Experian

14 Building an integrated digital strategy 14 Experian

15 The customer journey has entered an era of personalization 15 Experian

16 Market forces make a personalized approach highly relevant for collections Consumer preferences are changing Consumers are conditioned to expect easy, frictionless experiences Regulatory oversight has increased Collections regulations are complex, particularly those around customer interactions Intense pressure to reduce costs Facing cuts to resources, collections teams are forced to do more with less 16 Experian

17 Data and technology have come together to make personalized collections a reality Data Blending customer information with credit, behavioural, demographic and emerging data sets enable a detailed customer view Analytics Predictive models that inform decision making on the basis of risk, behaviour, propensity, etc. Decisions Automated systems that use enriched data, analytics, and collections policy rules to make decisions that drive customer interactions or treatments Execution Systems and tools that support the collections process by facilitating customer contact, negotiate, and settlement 17 Experian

18 Balance Traditional approach to segmentation 1 Immediate high intensity outbound calling 2 Call day 1; medium / high intensity 3 Call day 1; medium intensity 4 Call day 1; low intensity 5 Leave to self-cure; call day 5, low intensity 6 Leave to self-cure; letter day 5, call day 10 7 Leave to self-cure; letter day 10; call day 20 8 Leave to self-cure; letter day 20 Risk score 18 Experian

19 Connect to the data that enables personalization Gather credit, behavioral, and demographic data from diverse sources including Experian Connect to internal data sources and cleanse and normalize the data Combine and enrich data to gain a comprehensive view of customers Build an accurate and complete customer view 19 Experian

20 Applying data-driven decisioning for personalized collections treatments Enrich customer data Gain insights Decide Contact Credit Demographic Emerging Risk Propensity Behavior Regulatory What s the next best action? Self-service Automated workflow Collector Collection agency 20 Experian

21 Personalized approach to segmentation Holistic customer data Behavioral history Payment Usage On-us data Credit bureau attributes Single point Trended data Off-us behavior Socio demographic data Customer contact history Inbound Outbound Customer experience Personalized treatment Call / script SMS Web chat Self-serve portal Letter 21 Experian

22 Automatically decide on the appropriate customer treatment Directly embed best-in-class customer decisioning capabilities in the collections workflow Build then rigorously test decision strategies that drive effective and compliant collections actions Proactively monitor results, refine and improve decisions over time Execute analytically-driven collections actions 22 Experian

23 Real-time decision management Expanding the scope of analytics through the collections process Eligibility criteria for financial difficulties programs Hardship Loan extensions Temporary reduced payments Settlement offers Agency placement optimization 23 Experian

24 Optimize collections strategies to boost results Evaluate competing business goals, weigh trade-offs and determine the scenario that offers the best result Execute collections strategies at an individual customer level Determine the optimal contact time, channel and intensity, or allocate cases to the ideal agency Calculate the impact of every single decision 24 Experian

25 Drive an automated and efficient collections workflow Focus collectors on key tasks with a dynamic, modern user interface Provide collectors with a granular view of a debtor s exposure and other relevant information Prioritize activity and leverage capabilities that improve contact, response, and commitment Carry out precise and informed collections actions 25 Experian

26 Consumer engagement technologies 26 Experian

27 Adapting to changing consumer preferences Success is dependent upon a broader compliant contact strategy Employing a blend of contact initiatives based upon consumer preferences National trend moving rapidly to employ compliant electronic methods to supplement calls , texting, chat and virtual agent AVATARS (animated human) Our industry continued success is dependent upon our collective adaptation to consumer communication preferences 27 Experian

28 NCHER Survey February 2016 Most effective contact methods 35% of respondents rank as the top method of communication Texting is second overall and number one for year olds Cell phone calls and social media rank third and fourth respectively Traditional mail and land line calls are last Consumers by age group have different preferences in their preferred method of communication Source: NCHER Study by Google Consumer Surveys, Feb Experian

29 Virtual Agent Avatar methodology Exploring the use of online pseudo human communications via Avatar Provide information in the form of frequently asked questions to encourage repayment Speaks consistent accurate answers can be bilingual Consumer are more likely to listen to an virtual agent than read text on a website similar to social media Virtual agent access is 24/7 online open access Methods to promote website usage to consumers 29 Experian

30 Acceptance of interactive online characters Research about interactive characters suggests substantial opportunities for them to enhance online experiences Characters can increase the trust that users place in online experiences, in part because they make them easier Studies show people automatically accept pictorial representations of people as real Interactive characters increase trust in information resources Characters are well liked Source: The benefits of Interactive Online Characters Byron Reeves, Stanford University 30 Experian

31 Avatars provide enhanced communication and should be used in conjunction with other electronic strategies Virtual agent welcome Example Presentations are fully customizable Broad application Customer service Delinquency / default prevention Debt recovery first and third party Any online interaction 31 Experian

32 Conclusion Consumer preference has changed to digital To maintain performance a digital strategy must be employed Engage the consumer in the digital medium they prefer: Text Avatar 32 Experian

33 Questions and answers Experian contact: Paul DeSaulniers 33 Experian

34 Share your thoughts about Vision 2017! Please take the time now to give us your feedback about this session. You can complete the survey at the kiosk outside. How would you rate both the Speaker and Content? 34 Experian

35