Collections & Customer Management in the Spotlight

As the cycle turns, lenders understandably look to the customer management teams to help steady the ship.

Customers face uncertainty and financial stress, resulting in shifts in behaviours and increasing arrears; it is the job of the collections and customer services teams to engage with borrowers and find outcomes that work for both the customer and the business.

But these functions are facing something of a ‘perfect storm’ – workloads and case complexity are increasing at exactly the point when capacity constraints are being felt hardest. Teams are working remotely, putting pressure on technology and tools. Meanwhile recruitment is incredibly difficult, while regulatory impacts such as Payment Holiday rules are adding further operational overheads.

Working smarter, not harder

Among the array of tools we are seeing lenders utilise to support customer management, analytics and data are playing a prominent role. Capacity constraints are creating an increased need for automation, which in turn is driven by the underlying data and customer analytics. Pre-assessed Payment Holiday decisions, selection of customers for self-serve strategies and accurate reporting to the credit bureaus are just some examples of where analytical processes can alleviate pressure on over-stretched teams. Using data and predictive models to segment customers allows accounts to be treated more effectively, improving performance and reducing the average number of required touchpoints.

As the social and economic disruption continues, the volume of customers in arrears or under forbearance is growing. Not only that, but the profile and behaviours of those customers is shifting too. In this environment, optimisation of customer management is only possible with a clear view of this evolution and its impact on the business. At its core this means clear and concise collections reporting and operational MI, allowing the senior team to understand how accounts are flowing through collections, and where the pressure points are. Beyond this, arrears forecasting and stress testing models can provide a more proactive, forward-looking view of performance, such as the impact of Payment Holidays ending or economic scenario testing.

If you are interested in leveraging Vestigo’s expertise in collections analytics and optimisation to help you navigate through the current challenges, please get in touch.