Events in the world have increased the challenges associated with bank collection and recovery departments. This has caused them to become more creative in their approach. Calling is no longer sufficient to be successful in this increasingly competitive industry. The EXUS guide concerning collections and recovery in a changing world provides important advice for debt recovery and retail banking collection professionals. These tips can help any organization obtain the best possible collections and recovery rates.
1. Measure Performance And Provide Incentives.
A successful collection strategy must be implemented by collection agents. For this to work, the performance of collection agents must be carefully monitored. The important skills that are essential for working in a collections call environment are competence when using technology, product knowledge, system applications, and more. Collection agents benefit from having regular feedback concerning their performance. When opportunities for improvement are identified, a system needs to be in place to make certain they are followed.
2. Action Phases And Clear Rules
Communications with customers during the early stages of delinquency are different from communications when litigation is imminent. Collection calls need to be designed to provide increased pressure for continuously delinquent customers. Collection activity needs to be broken down into phases. Each of these phases needs to be a consistent collection approach based on a customer’s situation. During the initial phases, a lender is focused on working on a solution and maintaining the customer relationship. The goal is to prevent a customer from moving to the later collection phases. Customer risk information, delinquency, and product are all factors taken into consideration.
3. External Agencies
Any external agency used for collection purposes must be closely monitored. They are often utilized when a cost/benefit analysis is conducted and shows it would be beneficial. When choosing an external collection agency, a highly selective process should take place. There needs to be an evaluation of a company’s technical abilities, its reputation, experience, and price. Visits to the company’s place of operation are also important. It always needs to be determined if a collection’s agency can provide the type and level of collections services necessary.
4. Assigned Ownership And Pool Approach
Prior to automated outbound technology becoming an industry standard, collections businesses would assign accounts to individual collectors from the beginning to the end of the collections process. This approach provided certain advantages. Collectors would know a customer’s situation and determine a creative approach to resolving their issues. A collector would be trained on how to handle collections at all levels of delinquency, and the best way to deal with collection issues. The main disadvantage of using outbound technology is that it’s not efficient. There are benefits to accounts being dynamically distributed. Collectors can be specialized at a specific level of delinquency and can provide creative solutions.
5. Scripts That Are Effective And Targeted
Scripts that are targeted can provide effective communication. An agent contacting a customer is representing a financial institution. The right message must be communicated. Scripts should be developed to take a customer’s level of delinquency and profile into consideration. It should reflect the code of ethics held by a bank. An effective script will provide a powerful introduction, discovery phase as well as an involvement phase. They should also address the necessary replies to a customer’s arguments.
6. Centrally Defined Collection Tools
The goal of a collection process is to get repayment agreements for overdue amounts and having the agreements fulfilled. There are several forms of repayment agreements. This will depend on a customer’s stage of delinquency. The early phases may involve being put on a repayment plan or a single promise to pay. A repayment plan may involve overdue amounts being repaid using lowered payments. It could also involve consolidation, restructuring, and more.