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The Collections Function of the Future — A Customer-Centric Approach

Publisher IDC
Published Aug 09, 2023
Length 10 Pages
SKU # IDC18113635

Description

The Collections Function of the Future — A Customer-Centric Approach


This IDC Perspective examines the need for lenders to adapt to a new environment with customer-centric models that are compliant and achieve high overdue-payment recovery rates."With regulations on collections evolving and impacting the market, lenders must adapt to the new environment with more customer-centric collection models. A better and more frictionless collections process that uses modern technologies, such as AI-driven segmentation and persona creation, more efficient multi-channel client-outreach orchestration across various stages, and more precise communication and messaging will lead to higher recovery rates." — Research Director George Briford, Financial Insights, IDC Europe

Please Note: Extended description available upon request.

Table of Contents

10 Pages
Executive Snapshot
Situation Overview
The New Collections Value Proposition
Adapting for the Future — Giving up Short-Term Gains for Long-Term Prosperity
Effectiveness
Cost
Risk
Customer Experience
Overall Approach
Current Conditions Ripe for Change — Reasons for Changing Now
The Rise of Omni-Digital Consumers
24 x 7 Society
Tech Innovation
Rising Customer Communication Opt-Outs
Lenders No Longer Able to Ignore Collections' Impact on Customer Satisfaction
Escalating Emotions
Contact Frequency
Lack of Control
Experience Timing
Lenders — Tailoring Collections Approaches Based on the Risk and Reward Associated with Each Customer
Low Expected Losses and High-Value Relationship
Low Expected Losses and Low-Value Relationship
High Expected Losses and High-Value Relationship
High Expected Losses and Low-Value Relationship
Transforming the Function
Lenders — Focusing on Key Principles to Guide the Design of the Collections Function of the Future
Personalized
Accessibility
Risk Based
Proactive
Data Driven
Responsive
Flexible
Leading Practices in Collections to Support the New Value Proposition
An Effective Integrated Messaging Approach — Among the Most Critical Components of a Successful Collections Function
The Target Operating Model of a Leading Collections Function
Proactive Pre-Delinquent Outreach
Initial Communication Attempt
Initial Triage/Assignment
Ongoing Contact Strategy Adjustment
Inbound Contact Management
Offer Presentation
Additional Borrower-Support Options
Follow-Up
Completed Payment
Required Changes — Three Key Areas
Borrower Contact Strategy
Resolution Options
Interaction Approach
Advice for the Technology Buyer
Learn More
Related Research
Synopsis

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