FinTech debt collection startups are transforming a dated industry that was relying on archaic methods of practice. The industry disruptors are seeing dramatically increased recovery rates while offering a more pleasant experience for both debtor and creditor.
So how are they doing it? Let’s take a look…
1) Communication modernization
Humans are communicating with each other on unprecedented levels, but forms of communication have evolved. People aren’t picking up the phone to each other anymore, instead they text, email or use social media. Did you know, for example, that up to 68% of customers will open an email? So why do traditional debt collection agencies stick to those dying forms of communication? Digital communications, such as email and SMS, are the industry’s link to those people who have ditched the phone. This modern, omni-channel approach helps to increase long-term engagement with the client and drives up recovery rates.
2) Customer interaction analysis
FinTech debt collection startups, such as TrueAccord, know that they can learn from every interaction with their client. That’s why digital debt collection agencies use powerful AI to analyze their communications and work out the response with the best chance of success. This data-driven method is highly effective with follow-up emails based on user behavior performing almost three times better than the traditional method.
3) Communication development
By using modern forms of communication, FinTech debt collection startups have a huge advantage over the legacy agencies. Every piece of communication can be analyzed, altered and improved by state-of-the-art AI. TrueAccord is constantly evaluating their communications with customers and making improvements to drive up engagement and, ultimately, recovery rates. For example, it’s possible to analyze the effectiveness of one call-to-action button in an email compared to another. We can also work out which email subject lines are better at convincing people to open their emails. Our machine-learning engine can then help us create content that has the best chance of engaging with the customer.
It’s very difficult for legacy agencies to scale their operations. New manual debt collectors need to be hired and then subjected to extensive training. Once they’re on the job, they often receive low, commissioned-based wages, which can lead to low-morale and a lack of motivation. FinTech debt collection startups have removed these issues by implementing a highly-scalable communication process. More than 90% of TrueAccord’s interactions with customers are automated, which means each care agent can handle 10,000 cases compared to the industry average of just 800. The sheer number of accounts each person can handle naturally increases recovery rates. The automation of the communication process also has the benefit of reducing compliance risks. Every email sent to our customers has been pre-written by talented content creators and approved by a team of lawyers.
5) Personalized payment plans
Customers fall into debt for a number of different reasons. They may be in-between jobs or had an accident that cost them financially. FinTech debt collection startups understand this and, more importantly, have the means to do something about it. TrueAccord’s hi-tech AI analyzes millions of previous interactions to work out the best course of action for an individual. If a customer needs a longer time to pay off their debt, our data-driven system can recognize that and offer a highly personalized payment plan to cater to the customer’s needs. Where many legacy agencies once worked against the customer, TrueAccord works with them to help them out of financial difficulties. This sympathetic approach helps to increase engagement and drive up liquidity percentages.
As you have seen from the above examples, FinTech debt collection startups really are changing an out-dated industry. A machine learning and data-driven approach is providing a much more sympathetic service which produces outstanding recovery rates.