For collections teams, the coronavirus outbreak has created a paradox. How to deal simultaneously with escalating volumes, changing regulatory guidelines and high customer expectations – all while experiencing significant frontline staff shortages. It’s undoubtedly a mammoth, and complicated, task. So where should you begin?
We’ve identified four key strategies that can help you enhance your collections teams effectiveness, improve support for your customers and manage any emerging credit risk across your portfolios.
1 – Proactively identify customers who may be at risk
If you can proactively identify the customers who are at risk of potential non-payment and financial difficulty, you can initiate early intervention and support before waiting for them to ask for it. This is enabled in various ways:
- You can be armed with knowledge of income shock and the extent of hardship by accessing triggers and alerts which can provide you a comprehensive view of each customer’s financial exposure.
- When customers do request payment holidays, you can track the prevalence and type of forbearance they need. It’s likely you’ll have a high volume of requests over the coming months, with many needing longer-term help. Due to the scale of demand, being able to determine who is genuinely in need will require careful monitoring and a clear understanding of the customer’s circumstances.
2 – Open Banking to help build up-to-date view of income and expenditure
By utilising new data assets, such as transaction data enabled by Open Banking, you can build an up-to-date, accurate view of your customers’ disposable income, financial health and resilience. Advanced insights derived from categorised bank transaction data, can be used to understand the income and expenditure of a person in real-time, identifying stress and pre-delinquency.
3 – Update risk models and recalibrate KPIs in line with changes
Pre-Covid-19 KPIs and indicators for identifying risk have changed. Recalibrate your KPIs to identify new signs of risk, highlight warning signs and track data such as roll rates and pre-delinquency levels. This ability to draw on the right data will also help you weather the storm of any further regulatory changes. Extra variables, and access to frequent alerts of change, can help you understand actual risk and exposure, and model these for the future.
4 – Limited operational and IT resources
To ease pressure on teams which are experiencing a high volume of contact from customers, aim to use automated processes wherever appropriate and possible to do so. Interactive self-service systems can also make it easier for your customers to find answers or make a payment – taking control of their finances without needing to speak to your staff. It can also be a less intrusive approach for customers at a sensitive time, and for many customers today it is their preferred contact channel. Automating manual case handling and customer communications can also lighten the load by helping you capture details and identify vulnerability quicker.
How can Experian help?
Our insights provide indicators of critical emerging trends
We can provide access to timely and relevant insights to support your response to the changing conditions, identify financially vulnerable customers and strengthen your portfolio.
- Trended data – using historical payment trends rather than snapshot in time allows you to broaden your lending decisions and increase your lending book.
- Triggers – get daily alerts when something big happens that will impact your customers ability to pay
- Bureau Insights – key metrics covering payment holidays, income changes, and current account turnover available fortnightly so you can act more quickly than ever before
- CaaS* Transaction data insights – categorise your own customer’s payment account transactions to quickly assess affordability in your portfolio.
- Affordability IQ– personalised bureau insight that can be used seamlessly to verify a consumer’s income and to understand their financial well-being.
Automate income capture with our affordability passport
The Experian Affordability Passport is a web-based technology enabling you to offer customers a secure platform for sharing transactional data. It gives you a clear, comprehensive picture of their affordability and the best possible indication of those likely to struggle in the current crisis. Create automatic triggers and alerts around income, liquidity and balances, check the customer owns any connected accounts, and proactively build a fuller view of their financial world.
Capture vital information and enhance your underwriting
Aire’s API brings together a series of advanced technologies, including deep financial analytics, data referencing and virtual interviews. It integrates seamlessly into your platform, using machine learning to create personalised credit scores based on the things that really matter – like financial maturity, career and lifestyle.
We can help you manage those unexpected spikes in demand for financial assistance
PowerCurve Customer Assist automates the customer hardship and financial difficulty process. The cloud based decisioning solution makes decisions in seconds and is communicated through a digital channel that suits the customer to enable a consistent customer experience. The latest in AI virtual assistants is also included in the solution to manage unexpected peaks in customer queries and automatically flags any cases that may need human intervention.
If you would like to find out more please speak to your account manager or contact us and we’ll arrange for an expert to get in touch.
*On a sample size of 19 million UK consumers
© Experian 2020. Strictly private and confidential. For CAIS members only. No onward sharing allowed.