Here is my version of ‘1984” for the collection industry. 2020 is just a few years off and with the direction and level of change in the collection industry here is what I perceive the industry will look like in the year 2020.
First; TCPA reform will allow collection agents to contact consumers on their smart watch or some other yet to be invented device. So let’s look at a normal account flow in 2020.
Dental Office Account for $1,000 Placed with Agency after 90 Days Delinquency
Email and text sent to consumer with the following:
- a) disclosures;
- b) a link to an online interactive negotiating website;
- c) no contact phone number is provided to contact the collection agency;
- d) a link is provided in the electronic communication to file a dispute within 30 days.
After the IT department launches the text and email campaign, the marketing automation system, using artificial intelligence based machine learning, begins to analyze the interactions of the consumers to the text messages and emails. Depending on the timing and frequency of the consumer engagement, and the devices they utilize when responding to the campaigns, the collection automation system then begins to build follow up campaigns created in real time, utilizing the most likely communication channel through which the consumer will engage. These follow on communications campaigns are created and optimized with compliance rules and conversion goals at the heart of the analytics model
Based on the actions, or lack of actions, over the previous 24 hours, the collection automation system now begins to optimize and expand the contact strategy, introducing new contact channels to the strategy. In this stage of the campaign, expanded contact options such as a collector chat/assistance option or a “Click to Call”button are introduced to some, but not all consumers utilizing the web payment system. Based on certain actions performed by the consumer or inferred by the system during the web session, such as payment intent or exit intent, new communications options are presented to the consumer in the web payment session based on their actions or perceived intent. As consumers interact with different communications tools, the system identifies patterns and measures actions against predetermined collection campaign goals, and provides attribution to the different communication channels, giving credit to assisted conversions across the different engagement channels utilized. By measuring the number of touches, and identifying the different channels the consumer engaged with, the collection automation system will continue to learn and optimize the most effective strategies.
Over the next 5 days of the campaign, the collection automation tool will now begin to incorporate selective outbound calling campaigns, but tailored to actions in near real time that identify a consumer’s likely intent to engage. Based on actions such as opening an email for a second or third time, visiting a payment site and viewing offers but exiting without making a payment, or visiting the payment site or opening the email from given type of device such as a mobile phone or desktop device, the marketing automation system can direct the dialer to make an outbound call to the most likely number the consumer will answer based on the device they were previously using. The system might also opt to just send a text message to the consumer directing them back to the payment site for a new set of offers available only for a limited time. This one-to-one contact strategy is designed to present the right offer, on the right device, at a time that the consumer is most likely to receive the communication and be able to act upon it.
The Collection Manager of 2020
In the new data driven collection environment, managers will view portfolio performance with a new set of metrics, balancing total liquidations against channel cost and time decay. Managers will leverage multi variant testing tools to develop complex champion challenger tests, constantly testing every aspect of each communication from verbiage, to color, to logo placement and even designing dynamic messaging down to the recipients preferred email provider or device model. This begins to look like marketing at this point instead or collections.
Testing will become a science in and of its self with complex champion challenger tests designed to squeeze the maximum number of basis points of liquidation from every file. The collection manager of 2020 will be data scientist first, and collection specialist second, with a strong background in direct to consumer marketing functions. The collection managers of tomorrow must be focused on the science of consumer engagement first in order to compete with the constant barrage of messaging and communications consumers will be presented with in multiple channels.
The Connected Society of 2020
Credit bureaus will be forced to become more responsive, leading to the requirement to add and delete records in 24 hours or possibly in real time. Credit applications will be originated using electronic applications or device based apps, virtually eliminating the need for paper applications. Consumer communications will be almost exclusively electronic as society moves to a near 100% connected status.
Durable goods and large ticket items will be enabled with GPS communications and location tracking systems that allow remote diagnostic and servicing as well as lockout and disable functionality in the event of non-payment or default. Retail brick and mortar establishments will continue to suffer as consumers make more purchases through online outlets and rely on retail locations for same day Pick Up convenience or showroom services.
In the connected society of 2020, hard currency will become almost non-existent with biometrically protected mobile wallet applications replacing the need to carry currency or credit and debit cards. Barriers of language that exist today will be gone in 2020 and reading anything in another language will be as simple as snapping a photo on a cell phone or looking through the viewfinder on a camera.
Massive personal databases housing all types of information on millions of Americans will become connected and consolidated, aggregating personal, financial, medical history, genomic/DNA, lifestyle and behavior data that will be accessible by the government, employers, insurance providers and financial services companies under the auspices of protecting consumers and the nation. A medical diagnosis or treatment immediately updated in this database may automatically trigger a search for DNA or other genomic information to treat the condition or simply implement an abatement of collection activity against a person with an outstanding debt.
As communication changes from personal to electronic over the next few years, the few agencies and law firms that embrace that technology will be the big players in 2020, the ones that shun technology as a collection tool will fade away. If you’re interested in learning which of these tools now exists and how you can get on board call Phillip W. Duff CEO of Lighthouse Consulting today at 904-687-1687.