In Focus Risk
TELROCK SMART INTERACTIONS
Left-right: Bob Kingdon; Bruce Turnbull; Martin Parr; Clive Jacobs; Mark Fiander
What regulatory issues are at the top of your agenda? TA: Society, as a whole, has become very focused on technology. I used to work in my father’s shop, and I learnt then that it is often not about the Pounds, but the Pennies – the product will always sell, but what saving can you make to give you a profit margin? Sometimes, it can be good to have that personal contact, so that it is a real person rather than ‘option one, two, and three’. We have to get back to having that skill-set to want to go and speak to the customer, to get the money back that I am owed.
MF: Because we are a digital lender, we have a lot of data and this allows us to segment our customers. We can definitely see that there are some customers who want to talk to somebody, and there are others for whom the whole reason they applied online is because they do not want to have any of that personal interaction with an individual. Age profiles certainly come into play as one of the key drivers of that. It is also interesting that customer engagement starts early in the funnel, so when a customer is taking out a loan, we seek to understand them and their needs. As they go through their journey, we ask what is their behaviour telling us about what will be the best way to interact with them? We can then personalise, which might mean using the telephone for some customers, but not others. Personalisation, customer choice, and rapid testing are really crucial.
TA: You do see a lot of elderly people who have money, but are fearful of change. They want to talk to someone and to have someone show them how to use the technological facilities available. The youngsters are more ready to take a risk and are of a generation that sees technology as a normal part of life.
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FH: It has always been the case that collections gets no investment until there is a credit crunch, and then, all of a sudden, there is a realisation that there is a need to spend some money on collections. At every other time, all the money goes to underwriting and business development because that is the priority of the business. It goes back to the point made earlier that businesses are less able to manage revenue, but are able to manage costs, and bad debt can be a very large cost.
MP: Years ago, I can remember that the collections team tended to be where failed new-business personnel went. However over time, there was the realisation that this is also a specialised role requiring dedicated collection professionals. Today, a good collections team is as important to your business as a good new-business team.
MF: There are lots of opportunities to combine behavioural data points with other sources in underwriting. However, it does feel that, from a collections point, often this data is overlooked or not passed through with the customer. Often firms do not use the same tools or techniques even though they still have that data.
DC: From a debt purchase and DCA perspective, one of the worst things is when the lender does not provide the DCA or purchaser with all the information they
have. It can be a case of ‘well here are the names, addresses, and contact details, here you go!’ when, actually, we prefer much more than that so that we can ensure that the customer journey is a good one. The amount of times you approach a client during the collection process to hear ‘oh yes, we have all that’. It can be a little frustrating.
SK: As a contingent DCA, we get almost none of that and I often wonder that the customer’s behaviour must change from the point that they were looking to get the credit to the points that they were servicing the credit, and then when it went wrong. So I would be really interested to know whether their contact channel changes when it gets to the back end. I think it does, but I can never validate that because we never see the data on their prior performance. If they said that ‘at the front end we recruited them via the internet, and they did this and that’, but all of a sudden, the thing that prompts contact with us is a letter, then we would understand that something has changed.
What are the big challenges and opportunities in collections today? DC: Technology becomes more of an issue when trying to recover debt because e-mail communications tend to back up, remain unread, get lost in the volume received, and, of course, can be blocked. Suddenly, a traditional letter lands on the doormat and, because it is unusual for a younger person to receive hand-delivered post, they often take more notice. The younger generation can have a habit of deleting an e-mail or message. In their heads, once deleted, it is gone.
Today, a good collections team is as important to your business as a good new-business team
www.CCRMagazine.com
MP:When I started in motor finance, way back, as a sales rep, part of your job then was collections in the evening, knocking
April 2018
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