Collections Communications: Multi-Channel vs. Omni-Channel

The question of multi-channel vs. omni-channel communications may seem to be a matter of semantics. But in fact it's hugely significant, and never moreso than now, when the ending of furlough schemes, payment holidays and business support schemes will bring about a big increase in the volumes of customers facing financial vulnerability, while those needing to collect will also face significant regulatory scrutiny to ensure the fair and appropriate treatment of vulnerable customers.

From an operational perspective the challenges include:

1. Ensuring that policy and treatments are applied correctly.
2. Manging the transition of returning staff back into the workplace.
3. Balancing the needs of returners with those who may still need/want to work from home.
4. Ensuring the welfare of all staff.
5. Managing increased inbound demand created by those customers trying to proactively resolve their financial situation.
6. Being prepared to deliver an effective outreach programme for those customers less likely to proactively engage with their creditors. The volumes of these customers are potentially going to be high as individuals struggle to balance going back to work, getting the kids back into school or coming to terms with being unemployed or in a lower-paying role.

In this post, I’ll explain why multi-channel vs. omni-channel matters, and offer pragmatic suggestions as to how you can use digital channels effectively in a way that will deliver tangible results.

Point Solution Approach (Multi-Channel)

Most collections and recoveries clients that I speak with, who are proactively reaching out to vulnerable customers, are typically utilising multiple channels of communication.

Figure 1

This is depicted in the Point Solution Approach above, where we see individual channels being utilised, provided by separate vendors (dialler, SMS provider, letter). Communication attempts are delivered through the separate channels, usually at specific times of the day, and occasionally on ad hoc basis. This is the multi-channel approach.

I am sure that many will relate to this approach, and, although seemingly simple, it is not as straightforward as it appears. One of the big challenges is the amount of manual intervention required to get things up and running and then effectively managed each day:

• Dialler campaigns need to be created and loaded first thing in the morning.
• The dialler then requires oversight to make sure it is running optimally.
• SMS campaigns must be manually created and then sent at appropriate times to ensure they do not create excessive Inbound demand.
• There also has to be an acute awareness, from both an operational and strategy perspective, of when other channels and contact media are being used to ensure that customers are not being overwhelmed with contact attempts.

In addition, multi-channels are usually provided by separate vendors so, from a procurement and governance perspective, the point solution approach results in the requirement for multiple touchpoints with the chosen vendors, particularly if there are service/SLA issues, RFPs, or contract negotiations due, or even when having to attend monthly or quarterly business reviews.

In summary, a point solution or multi-channel approach is fraught with significant manual intervention and ultimately runs the risk of delivering a poor experience and outcomes for some customers.

Continuous Flow (Omni-Channel)

With the continuous flow route, we see the benefits of starting to adopt an omni-channel approach to contacting customers. By taking the available communication channels and managing them in a seamless way, you can immediately see how life gets easier on a day-to-day basis. 

By ingesting one simple data file, first thing in the morning, all the manual challenges identified through the point solution approach disappear. This includes the manual preparation of dialler campaigns, SMS lists, dialler oversight, the appropriate timing of sending SMS, and the sending of email and letters. In addition, the requirement to manage multiple vendors also disappears if you utilise a single omni-channel provider.

However, these benefits are mainly operational and are only one part of the story. The other significant aim of implementing an omni channel approach is to deliver a superior experience for your customers and the key to this is channel orchestration.  

Channel Orchestration

To illustrate this, let’s look at the design of a simple data-driven strategy and what this looks like when being delivered by a point solution approach.

Figure 2

In Figure 2, a risk-based approach to segmentation has taken place, based on scoring and score cut-off analysis, and five risk segments have been derived. As part of this, a self-cure period has been identified and an appropriate amount of time allowed before timed contact attempts are made. It’s worth noting the precise contact channels are not prescribed by the strategy, only that contact should be attempted. Channel execution is decided in the omni-channel solution.

Figure 3

When the data-driven strategy has been designed, the next step is to convert this into an orchestrated omni-channel approach. To illustrate this, we have taken the high-risk segment of the data-driven strategy and converted this into a series of intraday mini contact strategies. Each of these can be executed using a batch process, potentially with feedback files being returned to the host or collections system, at 15-minute intervals during the day, or by a web interface (API) driving real-time processing.

In relation to the design of the intraday contact strategies, the following elements should also be considered:

• Ensure the use of self-service options, at all stages, to empower the customer.
• Introduce warm-up SMS messages ahead of interactive SMS and voice messaging.
• Use email to let the customer know what you have been doing to contact them and use this as an opportunity to reassure them and signpost them to appropriate areas of support.
• While all times of day can be covered, levels of intensity can be adapted dependent on compliance and risk appetite.
• Don’t be afraid to introduce escalation into your messaging. This can be done in a professional way by pointing out the specific consequences of continued non-payment or non-collaboration.

The benefits of adopting this orchestrated omni-channel approach include:

1. Customer experience is improved due to the introduction of self-service options and being able to complete things at a time that is convenient.
2. Automation results in a significant reduction in the amount of manual work required to set account processing in motion.
3. Compliance and control are improved due to the virtual agent executing channel content and scripting in a consistent yet fixed manner.
4. Vendor management becomes less onerous because the requirement for multiple suppliers is eliminated
5. Scaling an operation to deal with increases in volume or unexpected events is seamless.
6. Adding additional channels is simple, with very little change or integration work required

It's also worth highlighting the outstanding performance that the orchestrated omni-channel approach delivers. The performance of a representative number of FICO customers using our Customer Communication Services applications were analysed, establishing the following:

1. Right party connects per hour – 108 (median)
2. Account resolutions per hour – 31 (median)
3. Success rate – 37% - Unique cases successfully resolved as a % of unique cases processed
4. Days to contact – 1st processing day – 31% achieved
5. Days to contact – 2nd processing day – 68% achieved

As an example of the positive impacts these results have on performance, you only need to take a look at Santander Polska who, when using this approach, achieved:

• 160% uplift in auto-resolution
• 20% reduction in delinquencies
• 25% of all cases fully resolved via automated means
• 1.84 average days for arrears resolution

These are compelling results which are delivering significant customer and operational business benefits. They point to the advantages of digital transformation and omni-channel contact orchestration.

If you would like to find out more about how FICO can help you to improve the experience of your customers in collections, increase automation and take your collections performance to the next level, please reach out to me at huwvaughan@fico.com.