DEBT COLLECTION INDIA: NEW TRENDS IN 2022

  • 28 May 2022
  • By MNS
debt collection services in India

The Debt collections business is primed for even greater transformation in 2022, which should come as no surprise. The latest modification to Reg F, lenders’ digital-first strategy to engaging with consumers, and the improving economy are all going to make things more difficult for third-party collectors. Changes in customer behaviour and the termination of industry-specific moratoriums are exacerbating the situation.

So, what are the most essential trends to watch for in your industry? The four important trends listed below will set the setting for, and have an impact on, the fast-changing landscape. Keep track of these items if you’re a developing collecting company to strengthen your operations, increase productivity, and improve client satisfaction.

“In consumer finance, digitization is on the rise.”

1. When going digital is the boon

According to a J.D. Power report from 2021, a record 41% of U.S. retail bank customers are now digital-only. Non-cash payments are growing at a rate of 32%, and in 2022, digital payments may eclipse cash payments for the first time. This tendency, together with the growing popularity of the Buy Now/Pay Later (BNPL) lending model, will have a direct impact on debt repayment patterns which is famously practiced as Debt Recovery rather B2B debt recovery using a collection agency in India. So, what are the options for debt collection in India? To fulfill evolving client expectations, they should take a dramatic swing toward digitization.

  • Map out your existing processes and find areas that could be automated to take advantage of this trend.
  • To add scale and processing accuracy, consider integrating solutions that enhance customer satisfaction; prove the quality of our service and professionalism when considering B2B Debt recovery.
  • Replace manual compliance software with automated compliance software to avoid costly errors caused by internal and external non-compliance.
  • Use artificial intelligence (AI) to evaluate customer data and deliver next-level case management or various financial reports also known as Business Information Reports.

2. In the post-pandemic environment, self-service is a desired characteristic.

The use of self-service channels has climbed by 20% since the epidemic began, according to Boston Consulting Group, and this trend is expected to continue in 2022. However, it is still too early to implement a full-fledged “digital-only” collection plan. A text message or an email may be OK in the early phases, but too passive in the later stages for many consumers. Revisiting your infrastructure, data analytics, and automation initiatives is an excellent place to start when developing an effective multichannel contact strategy.

  • One can always connect for quick tools that are not only user-friendly in terms of b2b debt recovery and debt collection in India. This would allow consumers of all ages better manage their accounts while also eliminating manual work for your agency.
  • Ensure a consistent customer experience in India across all channels, including debt collection SMS, email, chat, and phone.
  • Use your Speech Analytics findings to better understand consumer sentiment and preferred channels.

3. You can’t dismiss the consumer’s voice.

This has been a big challenge to Collect unpaid accounts internationally, the Consumer Financial Protection Bureau (CFPB) has proposed new rules that require agencies to refer to the model validation notice and limit the number of calls made each week. As a result, as a collection agency, you must devise a consumer contact approach that is both sympathetic and productive from a commercial aspect. You may enhance your time-to-repayment, liquidation rates, and customer satisfaction by getting it right (CSAT).

Real-time speech technologies can help you enhance your QA and identify better ways to guide and teach agents for better client experiences in your quest to embrace a “consumer-first strategy.” Here, using big-data analytics to segment customers can help you engage with them more effectively while maintaining a human touch.

How to take advantage of this trend:

  • Analyse your call records data to determine each customer’s preferred communication mode and swiftly change your collection approach.
  • Make all of your payments available through digital platforms. Ensure that clients do not have to contact an agent if they do not choose to.
  • Make it convenient for your customers to approach you.
  • Make sure your web presence offers easy-to-follow directions.

Determine how to obtain regular client feedback. Implementing their suggestions can assist you in creating a smooth user experience.

4. There is a genuine talent shortage in the industry.

According to a new report, over 60% of debt collection firms believe hiring and maintaining personnel is “very difficult.” The monthly leave rate in 2021 was 2.9 percent, indicating that staffing is a concern in most businesses. Unfortunately, the skills shortage will not only persist but will worsen until 2022 as a result of the rising demand for people to help agencies cope with the increased workload.

In this situation, businesses must increase their hiring efforts while also making the most of their existing agents through better segmentation and resource allocation tactics.

How to take advantage of this trend:

  • Establish a streamlined approach to ensure that only the most experienced agents are assigned to customers who are dealing with complex challenges.
  • Target the proper training for the right agents using speech analytics data. 
    This should assist you in fast transforming fresh agents into seasoned professionals.
  • Check to see if outsourcing work to a BPM is a suitable choice for your company’s maturity model. 
    If yes, make a list of questions for the selection of Production Management, Transition Management, Compliance and Performance, Resource Management, and SOPs practices.

The first quarter of 2022 has concluded, but according to a McKinsey report from December 2020, roughly 10% more people will utilize mobile banking technologies after the COVID-19 epidemic. That trend is affecting the way debt collectors work now, according to the firm that specializes in accounts receivables and debt collections by leveraging artificial intelligence and other technology.

Debt Recovery using a collection agency in India

The world of debt collections has changed in recent years as a result of the COVID-19 outbreak. To be competitive and satisfy evolving customer expectations, debt collection companies need to embrace digital.

Starting with the digital-first strategy that finance businesses and other credit providers should use when their customers fall behind on their payments.

For decades, the debt collection sector has used a phone-first technique, relying on the customer’s availability and willingness to respond to the debt collection action. Over time, this has resulted in a terrible customer experience that is frequently unpleasant, prompting the customer to feel frustrated, angry, and ashamed. Lenders’ attitudes have shifted as a result of digital collection techniques. It has successfully engaged customers by removing negative thoughts and emphasizing that the lenders are there to assist them. It has created a mutually beneficial relationship between the customer and the lender.

Customers frequently demand self-serve choices when it comes to account management, according to the McKinsey poll regarding what individuals may do with their devices.

Conclusion:

Customers are increasingly opting for self-service platforms for debt collection repayment and banking in general due to the ease, 24/7 access, and a sense of control over their funds at any time and from any location. Customers prefer emails or in-app notifications that gently remind them to make timely payments rather being harassed with phone calls at inconvenient times, according to the firm.

The idea is to use a variety of data sources to get a complete picture of your consumer so that service and communication can be tailored to each individual. You can also use the information you’ve gathered about your customers to better your decision-making processes.

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