How to Reduce Your Debt Exposure in a Post-Pandemic Recovery?
We’ve seen how unexpected shocks can upend entire economies, industries, and communities. The COVID-19 pandemic has created unprecedented challenges for the collections industry due to new regulatory rules, changing consumer demands, declining disposable income, and limitations on movement. Traditional collections processes may not be sufficient in the new normal.
To keep up with the changes, organisations need to take an unconventional view of debt collections and examine how it can benefit the business, whether you’re a financial institution, insurer, or company undergoing a merger and acquisition deal.
As the world tries to forge a path ahead, the road to recovery will be long and hard. We expect a potential uptick in collections activity as forbearances and deferments fall off. However, with inflationary pressures, many consumers will struggle to make ends meet. As such, collections departments need to brace themselves for unpaid debts to be collected, renegotiated, or written off.
Debt collectors must adapt to the fast-moving landscape.
One challenge facing companies is the dynamic nature of data. With consumer data constantly changing and growing, people are becoming harder to track. In addition, more robust rules to protect personal information mean collectors need to ensure regulatory compliance with heightened regard to the accuracy, security, and delivery of people’s data.
How Experian can help
Capturing accurate consumer information and implementing processes that evaluate the data’s validity are crucial to reducing risk throughout the consumer life cycle. Looking at non-traditional or alternative data, such as telco and rental data, can also help provide early indicators of distress. Early alerts can facilitate better customer management and shape collection efforts.
Experian’s Debt Collection Services can provide clients with solutions that allow them to capitalise on opportunities, mitigate risk, and remain compliant. Using data and analytics, clients can better optimise their collection efforts and prioritise customers based on their probability of paying.
A consumer-focused process
Experian can help clients create a consumer-focused process that can turn even hard-to-find debtors into valuable customers. In an omnichannel environment, businesses can engage with their customers in their preferred channel—via text message instead of a phone call, for example. This method creates a more positive experience, increasing the likelihood of a successful collections campaign.
Experian is also certified by the Outsourced Service Providers Audit Report (OSPAR), which indicates the same level of governance, rigour, and processes that financial services are required to follow per the Monetary Authority of Singapore (MAS). Because of this, Experian can sync into data management and reporting requirements more seamlessly and effectively compared to other providers.
With Experian’s debt collection solutions, businesses can remain compliant and on budget while maintaining a good customer experience.
The pandemic has also shown that collection processes have a broader application beyond traditional banking and credit products. In the case of company consolidation, for instance, paying attention to debt management is vital to be ready for sustainable performance.
Debt Recovery Beyond Retail and Credit Financing
During uncertain times, what options do businesses have so they can perform their collections activities efficiently? We’ve seen the evolution of debt collection and how sectors outside of retail and credit financing are benefiting from this service. Moreover, a reliable debt recovery partner can help companies from different sectors enjoy returns and cost savings.
Find out how Experian can help your business optimise your recovery and collection efforts through our Debt Collection Services.
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