As long as there has been consumers there has been debt collection, but after years of traditional processes, debt collection is now evolving in order to embrace the 21st Century
Data from the Federal Reserve Bank of New York shows that roughly 13% of consumers in the United States have a debt in third-party collection, with an average amount of $1,300. In the U.S., for various reasons, the amount of debt in delinquency has risen over the last decade and at the same time; the success of collecting these debts has reduced.
Debt collection has often been considered a hostile process and one that doesn’t always consider the relationship between the consumer and the collector. The tactics used such as physical mail can be seen as antiquated in today’s modern era of social media networks and “always on” communication.
Embracing a more customer experience focused approach including a choice of contact methods, integrating digital channels and incorporating personalization, is the way forward for the debt collection industry.
This can be achieved by leveraging technology such as workflow automation, innovative payment products and predictive analytics – making the debt collecting process not only more effective but also less costly.
It’s time for debt collection to embrace the 21st century – using this approach will result in not only a higher collection rate but also a lower cost and a better relationship with consumers.
To find out more about Arvato’s innovative approach to debt collection check out RISE – a secure customer interaction platform which offers you a more convenient method to interact with businesses compared to traditional communication methods