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Debt Collection Reimagined: How Digital Preferences are Boosting Profits

Posted by Emily Herrington on Nov 1, 2021 1:34:59 PM

The paradigm of customer preferences has shifted in recent years. It should be no surprise that these digital preferences in other industries, such as online shopping, would eventually carry over into others. Using digital channels to collect debts is by no means a novel idea, but it has presented a challenge for many businesses to implement. However, with the passage of Regulation F and constantly emerging technologies, the debt collection sector is undergoing a digital shift in its operations. Research shows that customers prefer digital engagement, making payments with the tap of a button, and self-service options that can be handled when the timing is convenient instead of phone calls they don’t have time to answer. The great thing about incorporating more technology into debt collection practices is that it is a win-win for customers and collectors alike. It permits more efficient workflows and grants more flexibility in communication. Digital debt collection uses text, email, and other digital means such as chatbots and applications to send outgoing and receiving incoming communication from consumers.

Before Regulation F clarified that newer digital channels are perfectly permissible, many collection agencies shied away using such practices due to regulatory uncertainty. However, the verdict is out: email, text, and other digital means that offer self-service are acceptable under the new legislation. The new digital model uses ingoing and outgoing communication channels. Outbound channels, such as text or email, can be offered instead of or in addition to traditional phone calls, thus empowering the consumers to choose their preferred method. By allowing the customer to decide what suits them best, you’re increasing their trust, responsiveness, and engagement. Inbound self-service channels put payment and other options at the fingertips of the customers. This includes online payments, automated interactive voice response (IVR) systems, artificial intelligence (AI) chatbots, and online chats. All these options help streamline debt collection, saving time and money. Most importantly this model helps to remove any sort of personal embarrassment a consumer may experience when speaking to an agent on the phone.

Consumers should have the option to opt-in or out of various communication practices and these preferences need to be noted and upheld. One of the most appealing aspects of digital collection to consumers is that it feels less invasive or stressful. You will undermine any benefits of digital collection if the customer perceives that you are ignoring their wants and needs. All research is showing the same trends: new digital technologies are more attractive to consumers and result in greater engagement and increased payment collection. If you want to keep up with competitors and placate consumers, make the switch and optimize your workflow with the efficiency of digital channels.

For more information on how Account Resolution Team can help YOU get your money, call 423-586-7613 or visit www.accountresolutionteam.com

Topics: Collection Strategy, Compliance, Technology, old debt, debt collections, collection agency, unpaid debt, Regulation F