The outbreak of COVID-19 resulted in all but non-essential businesses closing to reduce the spread of the virus. Over 2.1 million people applied for Universal Credit in April and more than 10 million people supported by Government schemes. 

With family budgets under significant pressure, Government schemes have provided some short-term funding but with the furlough scheme finishing at the end of October, many face a financial cliff-edge without the prospect of a job. 

As a result, the debt industry is expecting to see a significant rise in defaults, particularly as the most vulnerable in society struggle to pay their debts.  

This puts considerable pressure on creditors and insolvency practitioners to turn cases around as quickly as possible whilst maintaining strict compliance and allowing over-credited consumers to find a sustainable way to pay back debts. 

Alok Sharma, Secretary of State for Business, Energy and Industrial Strategy has stated that several changes to the insolvency regime in England and Wales will be announced. Updates have been focussed on safeguarding businesses, however changes to both corporate and personal insolvency are expected.  

Below, we explore six ways that technology can support creditors, insolvency practitioners and in doing so, support consumers with the best possible service and a swift resolution. 

1 – Workflow processes  

Process automation can be used in a wide variety of ways to deliver productivity and utilise digital workstreams. 

  • Automation tools can eliminate tedious, but high-importance, manual administration tasks such as conducting research and reviewing documents. 
  • Live chatbots and automated outbound calling can reduce creditor response time to customer queries.  
  • Employees can engage in higher value tasks, productivity and accuracy rates increase, while operating expenses are reduced. 

2 – Communication channels 

  • Creditors typically contact consumers directly by phone or by writing to them at home. Since many people ignore calls from phone numbers they do not recognise, traditional forms of communication have limited success.  
  • Multi-channel communication systems can transform the way in which creditors contact consumers. A variety of digital channels, such as social media, SMS, email and robocalls are available to increase communication.  
  • Using channels that consumers are familiar with, creditors not only improve the customer experience, but are also far more likely to gain a response and see consistent collection results. 

3 – Messaging 

  • Advances in big data analytics and artificial intelligence can provide creditor organisations with the opportunity to create messaging which is personalised to the individual consumer.  
  • Wording and tone of messages can be adapted, as well as the frequency of contact, the best time of day to initiate contact and the voice type that a particular individual would most likely be receptive to.  
  • New processes can help creditors engage with consumers in the most effective way resulting in more productive debt collection calls and increased recovery rates. 

4 – Compliance 

  • Many complaints raised against creditors and debt collection agencies are based around their failure to follow industry regulations 
  • With the advent of intelligent rules engines, all communication between stakeholders can be easily recorded and analysed.  
  • Creditor organisations can guarantee compliance by ensuring that all interactions are done during the appropriate time window, as well as ensuring that the correct language and tone are being used with consumers.  

5 – Payment options 

  • Balance transfers conducted over the phone or web are popular methods of consumer repayment.  
  • Creditors and collection agencies can now use payment apps alongside these older phone and web-based methods to allow for simpler, faster and more secure collections.  
  • By making repayments easier, consumers are more willing to work out payment plans, meaning creditor organisations are more likely to experience increased recovery rates 

6 – Decision-making 

  • Due to the volume of unstructured data and variety of formats in which information is delivered, predictive data and analytics in the debt industry has previously been limited. Greater importance is now being placed on innovative data analysis tools e.g. data mining, AI, machine learning and statistical modelling tools and real-time analysis. 
  • Technology can provide creditor organisations with highly accurate recovery forecasts, also allowing creditors to see patterns in consumer repayment behaviour. 
  • As a result, creditors can adopt improved collection strategies and make data-driven decisions that allow them to get ahead of potential issues to reach the best possible outcome. 

Championing new technologies 

As advanced technologies continue to transform the debt industry, creditor organisations must keep up with the pace of change.  

At Cerebreon, our aim is to help all our customers champion change and experience the full potential of cutting-edge technologies.  

To find out more about how we can help you, visit our Creditor Solutions.