One of the repeating patterns of economic downturns is that banks task branch staff with collection calls. It may seem to be a good idea: branch staff typically have proximity to the customer, personal relationships and an understanding of the customer and regional circumstances. When the economy recovers, these reasons are quickly forgotten, and branch staff return to sales.
One of the strongest arguments against branch collections, other than conflict of interest, has always been the lack of productivity caused by the manual nature of branch calls. I am optimistic that this can now be mitigated. I am not a big fan of branch collections, but if you’re going to do it — and some banks already are — do it properly.
During the COVID-19 lockdown, many organizations have virtualized their collection call centres within days, with staff connecting to the dialler from home. If you can do it from your home, you can do it from the branch! There is really no reason why, in the upcoming downturn, branch staff should get back to wasting their time talking to mailboxes and waiting for phones to ring out. Manual collection calls are a waste of time and money, not to mention mundane and generally less effective!
Use your staff in branches as wisely as you use your core collection team. The bulk of calls in early collections can be managed with omni-channel communication platforms such as FICO’s Customer Communication Services. Collector calls are expensive and should not be wasted on nudging customers to payment. The strength of human calls is in the ability to understand the reason for delinquency and to assess the nature of the financial stress the customer might be under. Analytics can help to identify customers that should be contacted by humans earlier.
The full impact of COVID-19 on collections has yet to be seen, as wage protection and payment holidays have delayed entry of credit-stressed customers in the collections book. There is still time to look at how best to manage an increasing collections portfolio.
Leave the easy work to a machine. Focus your expensive resources — people — on where they can add the most value.
For more thoughts on managing debt collection in the current crisis, see these posts: