“Delinquent” is not a nice word — it sounds like a criminal. Perhaps you prefer to call them late payers, or forgetful borrowers, or customers in arrears. Whatever you choose to call them, there are more of them now, according to our survey of UK debt collectors, conducted with Marketforce.
In fact, 65% of the 180+ UK executives responsible for debt collections and recovery we surveyed said they are seeing more debtors who are becoming delinquent for the first time. Here is another distressing fact about distressed debtors: 6 out of 10 respondents reported rising levels of non-payment in the last 12 months. For public sector organizations, the number was 8 out of 10.
What I find just as grim is that the industry isn’t using all the technology at its disposal to get its money back, and relieve consumers of their debt burden. Here’s a rundown on what collectors, at banks, collection agencies and in-house at other industries, are not doing.
- 81% are not analysing data from payday lenders, an early warning system of financial distress
74% have no plans to use the potentially valuable data held in social network profiles and social media sites
- 57% don’t have systems that enable mobile payments
- 44% are not analysing recordings of calls collectors have with debtors
- 28% are not analysing call centre notes
- 22% are not analysing correspondence from the debtor
Why aren’t more collectors leveraging all the tools available? The simple answer seems to be regulation. Concerns about fair treatment under the FCA have some collectors skittish about incorporating new data and analyses into their processes. Also, the rise in spending on regulatory compliance at banks has been prioritized, which means less money to spend on improving collections.
Now for the good news (yes, there is some): The survey found widespread adoption of predictive analytics to fine-tune collection and recovery strategy and deliver consumer-specific treatments. The industry with the widest adoption of analytics – you guessed it, financial services – also had the fewest respondents reporting a rise in non-payments.