When “good enough to get by…” no longer is

How many collections executives have been frustrated in the past by their top management’s assessment that a further investment in collections efficiency or effectiveness is “unwarranted at this time, given other more pressing priorities” (a recently heard description of a series of past decisions by a major bank in choosing to defer maintenance and investment in new collections and dialer technologies over several years)? Judging from conversations we have had across the industry for years, this is by no means an isolated example.

Why is this? For one, overall loss rates tend to cycle up and down more as a function of the overall economy, as well as specific lending risk decisions made by each bank, than by the specific actions and investments of the collections operation – or at least, that is the perception. Another perception is that “we can always throw bodies at it if the problem gets acute”.

The advent of zero-tolerance compliance expectation from our regulators changes all that. No longer can we live with a manual surge – the “compliance tax” of extra people needed to manually manage the letters, individualized consent capture, non-automated contact and other reporting requirements now makes a cover-it-with-people strategy unaffordable (and, by the way, these manual approaches actually fail to reduce the risk of an enforcement action anyway).

Another factor is that borrowers don’t want to talk to agents to the extent they used to, making it so much more expensive to chase them with more callers as to be questionably cost-justified; but having the coordination and control over self-service and digital strategies needed to really affect the collections unit’s performance requires an investment in technology and organization and operational strategy.

What used to be good enough simply no longer is – it’s time to re-think the “old dependable” strategy for dealing with an expected upsurge in delinquencies…

Compliance "Provability" Achieves a Whole New Level

I was given pause recently when hearing a client tell me that they were ‘throwing bodies at the problem’ of putting the bank into position to be able to withstand upcoming audits. “What are all those people going to be doing?” I asked, naively. Turns out that even when the bank has expensive, high-tech systems in place to manage collections inventory, decisioning, letters, auto-dialing, email, text messaging, and IVR messaging…. they still need to manually reconstruct a view of each customer’s experience with the bank. These hoards of staff he mentioned were taking data from all the disparate systems and sources – they HAVE all the data, he assured me – and creating a normalized data set that then could be combed to find all instances of a particular customer’s experience and “paste them together” in a manner that was responsive to their audit examiner’s request. 

Proving a negative (“show me, by walking us through the experience of at least 100 customers, that your systems and people are consistently executing the policies and practices that you assured us are in place for your bank, 100% of the time”), it turns out, is much harder for the bank than it is for the examiner to find the one exception to the rule. The examiner therefore holds the high ground, until we can IN ONE PLACE, under the control of one system, easily step them through the entire experience of as many customers as they want to see, any time. And if we can also show them the strategy-writing and maintenance process we are following at the same time, in the same system… we win. CMC’s CredAgility offers just such a system, and with it the granularity needed to “provably” report on all activities at the individual account or customer level.

Prospects are always asking us to quantify the value of CMC’s comprehensive customer experience management automation platform. Viewed solely through the lens of staff avoidance, the savings can be very substantial during the peak staffing demands typically associated with an audit, and significant (if lower than at audit times) by making ongoing customer-facing business processes more efficient. There is also the effectiveness gain that occurs when a unified strategy is executed and customers’ experience improves, resulting in more resolutions: higher collections, higher issue resolution rates with less re-work needed, increased pull-through on complex processes like loan modifications. But the greatest value comes in the form of eliminating the dread fear of what an examiner might find and how much the ensuing enforcement action might cost the bank…

What is the impact of mobile on our customer experience management efforts?

I saw it again the other day: another headline for a webinar screaming out “Understand the 5 implications for optimizing collections in a mobile world” or some such thing. As if, by merely “implementing mobile” (whatever they mean by that: is it text messaging? two-way text messaging, the latest hot fad? Two-way email? Web transactions occurring on mobile phones and tablets?) we can fundamentally change the customer equation.

Recently, the CEO of PegaSystems pointed out that “75% of mobile application rollouts are reportedly missing their target expectations” and it was not because they expectations were set too high. He rightly pointed out that mobile is just another touch point for the customer, and if it doesn’t work alongside all the others then it lives on its own gulag – just like text messages and emails and web sites that aren’t fully coordinated with agent dialogue. Forrester and other analyst firms are calling this kind of interaction “omnichannel communications” (one conversation, carried out across a whole range of devices) in contrast with multi-channel (which is having more than one channel engaged to reach a customer, not necessarily coordinated with one another).

What is mobile, if not “just another touch point” with the customer that needs to be seamlessly folded into the overall conversation? The difference between CMC’s approach and that of any of the silo’d communications providers (whether IVR, dialer, or email or text or web) is that CMC is agnostic to the specific channel of communication and entirely focused on the effectiveness of the entire conversation, which includes the offer being made to that individual customer and the content of the disclosure or document as well as any input gathered from the customer (and redecisioning the offer, if appropriate) in order to resolve the situation. Mobile, in that context, is just another piece of the puzzle. The challenge is being able to solve the entire puzzle for the customer as cost-effectively as possible for the bank.