The collections function of the future: Where collections performance meets customer-centricity
Transforming the collections function
Leading lenders are transforming their collections functions and embracing a holistic view of how collections can improve overall business performance and portfolio economics. Improving collections effectiveness will remain a key performance measure, but the collections function of the future will be evaluated in the context of much broader objectives. Optimizing collections will be focused beyond reducing losses and will be closely integrated into decisions across the loan lifecycle, from adjusting the buy box in credit underwriting to prioritizing customers for loyalty and retention strategies.
Enhancements to collections should be rooted in a thorough understanding of your customers
Collections leaders must shift their mindset, recognizing that measuring risk at the account level is far more complex than prioritizing the delinquent balance and number of days past due. In our opinion, the most successful collections functions will be those who appropriately assess risk because this will allow them to prioritize collections more effectively. Understanding the customers communication preferences, responsiveness to contact and ability to pay will enable collectors to make better decisions about what actions will result in the highest likelihood of payment.
