Debt collection is today as much an important driver for increasing revenues as actual sales. Enterprises are adopting new trends and technologies to improve their collections statistics. We look at some of the latest developments and trends emerging in the Collections industry.
News and trends – Credit Collections
- New debt collection rules soon by CFPB: US-based Consumer Financial Protection Bureau (CFPB) has hinted that it is likely to come out with new collection regulations by spring of 2017. CFPB had been seeking feedback from both consumers and enterprises across the US about their debt collection experience. Enterprises had urged CFPB to ensure clear standards without circumventing the boundaries of the Fair Debt Collection Practices Act (FDCPA). With the new guidelines in place, enterprises in the US will be able to handle their collections in a more professional manner, lending credibility to the debt collections industry as a whole.
- Debt collection startup ushers in big money: In a sign of things to come, a startup ‘Collectly’ has raised $1.9 million in seed funding, making it the first in the industry to do so. As the collections industry becomes more streamlined, Collectly, which uses online tracking for debt collections, has shown the way for enterprises to adopt more innovations in the collection industry.
- Social media and debt collection: Debt collection is now coming to social media, and for good measure. Many debt collection agencies worldwide are tracking debtors’ social media accounts like Facebook and Twitter. While consumers may worry about breach of privacy, there is a likelihood of emergence of new tracking rules for online tracking. One thing is certain however—online tracking of defaulters is likely to gain momentum in the near future.
Technology Advances in Debt Collection
- Use of ‘Big Data’ based predictive analytical tools: While enterprises are predicting collection timelines with the use of collection tools or voice biometrics tracing debtor-agent calls, predictive analytics are just about to get bigger and better. Enterprises are beginning to make use of Big Data, helping them focus on every individual debtor with precision. The new wave of predictive analytics leverages many next generation technologies like Big Data mining, Artificial Intelligence, Machine Learning, and Statistical Modeling to reach a prediction. Such analytics offerings will take predictions one step ahead, even estimating the time a debtor is likely to take call and how a debtor is likely to respond. This can prepare collection agents in advance and increase collection probability multifold.
- Decision automation in debt recovery: Taking process automation open step ahead, modern day collection tools are moving towards an era of decision automation. Machines replacing humans as collections call agents can now make decisions as per discussion with the debtor and evaluating them based on the individuals’ data histories. Eventually, all collections processes from calling to handling P2P scheduling or partial payment leverage may all become machine-controlled.
Even as collections become a rising challenge for industries across the globe, the debt collections industry is evolving and deploying newer trends and technologies. The enterprise wishlists of today are poised to become the reality of tomorrow.