Did you know that during the past few years, the US debt-collecting sector has seen its value significantly rise? In fact, IBIS World estimates that the business will be worth a staggering hike in 2023 and beyond. From just 3 years ago, when it was valued at $11.5 billion, this is a significant increase.
The Regulation F regulation, agencies’ eventual transition to omnichannel communication, and the digitization of banking are just a few of the numerous developments and transformations that have occurred in the collection industry over the past year. It’s amazing to watch how the sector is developing and growing, and in the upcoming years, we can anticipate seeing a lot more adjustments and advancements.
First-party and third party debt collection agency play a significant role in the rise of this sector.
The top 4 trends that are anticipated to influence the debt collection sector in 2023 are listed below:
Increased consumer transparency
Customers are increasingly likely to be watchful with their money and pay close attention to even the slightest things. For instance, they might query any withdrawals from their bank accounts or carefully go over all the fields and information on a small business loan borrower information form. They may also wish to carefully review the information on covered services and charges contained on their medical bills while dealing with healthcare providers.
Additionally, they will expect greater transparency from companies that offer financial assistance. Third-party debt collection agencies might set an example by being more open with their clients and informing them of their policies in order to create a more effective collection process.
One of the finest actions an agency can take to promote openness is to take into consideration how debt collection agents seek, create, and receive context during discussions. Consider automating and standardizing call notes and offering live agent support. Both will provide customer care agents with the most accurate context during a discussion as well as more information at their fingertips.
A Shift to Omnichannel Intelligence
The aim of debt collection agency to create an omnichannel presence was a major topic in 2021. In light of Regulation F, which limits the number of times an agency can contact the borrower and mandates communication via the channel of their selection, that requirement has become even more important.
Every attempt a collector makes to contact the borrower is more valuable than the last; thus, they should place the highest priority on providing accurate information. As a result, there will be a greater need for omnichannel intelligence since there are more encounters of higher quality and more data to analyze.
Let’s first define omnichannel intelligence in detail. It is the process of communicating with customers across a variety of channels that are integrated with one another and have the capacity to learn precise context from one another
For instance, if the borrower said anything crucial in an earlier email, the call agent should be aware of it. If the borrower admits to the chatbot that he is unemployed or has a repayment issue, he should let the agent know in the following conversations.
As communication is improved, the danger of noncompliance is also reduced by a focus on accuracy and quality.
Emphasizing Collaborative Intelligence Over Artificial Intelligence
Collaborative intelligence is the ability of humans and machines to solve problems together. In delicate scenarios like debt collection, where every conversation may, by its very nature, involve stressful or unpleasant times, it is important when AI requires a lot of human support.
One example of how AI is utilized in debt collection is by top third-party debt collection agencies, who use it to record the call between the agent and the borrower. It listens to the conversation between the borrower and the agent and summarises the key points into a 20–50 word summary.
The agent, however, has the ability to add or remove information from the AI-generated notes. As a result, over time, the AI model gradually improves note accuracy. Without human input and context, it cannot succeed, and vice versa.
Taking it a step further, when used in conjunction with a real-time support system, these remarks can provide standardized information to permit better suggestions for agent efficacy. Humans and machines collaborate using the same information. Keep an eye out for the “collaborative” trend because it will certainly arrive soon.
Forgive and Forget: Debt Forgiveness
It’s interesting to note that the government has recently made a decision to forgive a small percentage of student loans instead of sending them to collectors. It might seem unusual, but there are various ways to have debts forgiven, including student loans, income-based repayment plans, or volunteer work. Eventually, these forgiven debts will not show up on your credit score. While it’s rare, other types of debt can also be forgiven in certain situations. This is definitely a topic worth paying attention to in the coming year, as it could have an impact on your business.
The Conclusion
The industry of debt collection is developing quickly. It is constantly changing, so keeping up with current trends will take a lot of effort. However, one key lesson from this situation is that leading, forward-thinking third-party debt collection agencies need to have an intelligent, data-driven, omnichannel strategy.
