Debt Collection & Recovery
The COVID-19 pandemic has suddenly placed collections & recoveries right at the centre of telecoms’ response to ensure customers stay connected and are given some relief in their payment terms. CXOs are seeing C&R teams in a new light. But there’s a problem: Years of underinvestment has left many teams for collections in telecommunications with limited tools, systems and processes.
Some telecom collections groups still have hard-coded rules built into billing or CRM systems. Some outsource the whole area to third parties or overseas contact centres. Some have dedicated systems yet lack the agility and flexibility to swiftly implement change.
Why is this? Because collections is rarely at the front of the investment queue. It’s often not even the top priority in the credit risk area, as the acquisition teams tend to work more closely with sales and marketing and find it a little easier to get cross-departmental support.
Now, the industry is now bracing itself for an increase in collections & recoveries cases. In the recent round of quarterly results, some operators have noted that their future bad debt charge is likely to rise in the coming quarters.
In markets such as the UK, operators have agreed that they won’t suspend services or disconnect subscriptions until the end of June, at the earliest. This has led to a flurry of activity within collections teams to change the treatment paths and alter the content of communications actions, such as SMS and letters. Customers are able to take payment holidays or qualify for discounts on their monthly bill in order to ease the pressure on monthly budgets.
And, whilst payment holidays can relieve an immediate pressure, there is a risk that it stores up a problem. How do you effectively manage people off these payment holidays? How do you continuously identify who really is in financial distress and needs support vs. those who are taking advantage? If customers suddenly have 3-4 months bills outstanding, is there a greater chance that they roll through the buckets?
As a measure to help alleviate pressure on telecoms collections operations, FICO has put a tactical solution together to enable operators to quickly stand up virtual, digital collections agents and automated dialogue with customers – from both consumer and SME segments – in as little as 5 days. This allows operators to identify those that need support, verify which customers are eligible for payment holidays and free up contact centres to focus inbound call capacity on those who need it the most. Using the FICO Customer Communications Services solution, the operator can quickly offer a true automated omnichannel experience, with channels such as automated inbound and outbound voice calls, interactive SMS, WhatsApp, email and push notifications.
This short video illustrates a simple automated payment holiday helpline, using a virtual inbound agent and confirmation via email. Every step of this interaction can be easily adapted by the business user to attend specific needs of your business.
Using Open Banking Data in Collections
Industry leaders are accelerating digital transformation initiatives and bringing forward plans to introduce solutions that combine Open Banking data and ongoing updates on customer situations. These solutions, such as Tully, provide support in three phases:
- Relieve (tactical phase)
- Nurture (mid-term)
- Recover (long-term)
FICO has partnered with OpenWrks to combine the Open Banking data (spend patterns, last paycheck) with ongoing updates on customer situation (furlough, reduced hours, redundancy, BAU). Our analytical insights can be used to segment customers and deploy highly tailored treatments that will help each of them repay and go back as quickly as possible to financial wellbeing. Further detail is available in this blog post by Bruce Curry.
Such ability to enable customers to self-serve digitally can help:
- Minimise the pressure on contacts centres
- Reduce affordability interviews from a 45-minute agent conversation to a few minutes of digital interaction
- Increase the accuracy of the customer’s financial status
- Provide an improved customer experience
The telecoms industry has really stepped up and done an incredible job of keeping people connected during the crisis, and has offered customers additional allowances, giving them “more for less”. Now is the time for the collections & recovery teams to flourish and take a pivotal role in helping telecoms protect themselves and their customers.
For more tips on managing collections in the current crisis and beyond, read these recent posts by my FICO colleagues: