The latest AI in Banking podcast features our CEO Ohad Samet as he talks about personalized messaging, collection forecasting, as well as his thoughts on branding and customer retention.

https://soundcloud.com/aiinbanking/machine-learning-for-debt

Establishing a consumer-facing business involves a wide range of steps, which include creating products and services that customers need. There are also essential “behind the scenes” decisions you need to ensure solid financial management of your company.

#1: Establish Payment Options

There are many ways you can allow your customers to pay you. However, you need to set up accounts to allow you to accept most transactions. Think beyond the basics here. For example, do you wish to offer our customers a way to use automated payments? Perhaps you would like to set up tap and go type payments. Research your potential customers and their preferred payment methods, whether that’s online and/or in person.

#2: Get Taxes in Line Now

Establish a method for collecting and managing your business’s taxes. Do not overlook the importance of having an experienced professional managing the books, so hire an accountant and a bookkeeper to manage your financials for you. A professional can help you navigate through and stay up to date on the complexities of state-specific and federal tax regulations.

#3: Establish Payment Requirements

In most business to consumer situations, you’ll require payment at the time of service. However, many companies give  credit both in-house and through third party providers. It is important for you to establish any payment requirements, such as how much is due, when it is due, and what happens if nonpayment occurs.

#4: Make Payment Easy

Having a web portal or an app to properly manage the payment process is a critical factor for most business owners. If you do not have a way for customers to make payments on their account online, you are missing out on a large portion of buyers. Vendors like Square, Stripe and Klarna make it easy for you to accept credit card payments online, and some, including Square and Klarna, as well as Afterpay and Affirm, allow consumers to pay installments over time.  

#5: Establish a Collections Plan

Although you may not want to think about it, this is a common situation and need in today’s business world. Define what this needs to be—who will handle it, what type of collections activity you will use, and when accounts go into collections. You also want to facilitate a way for your customers to pay for their fees, if applicable. This doesn’t have to be resource-intensive nor hard to do with the right partner. That’s why at TrueAccord, our debt collection platform empowers businesses to easily place their accounts with us and recoup charged off losses.

It’s not easy to make customers happy when you are trying to collect a debt from them, but customer satisfaction is an important component when servicing consumers, even in debt collection. Low customer satisfaction reduces collection rates, increases complaints, and adds to legal exposure. The old days of hitting consumers over the head, metaphorically, with aggressive phone calls is over. There are a few key ways you can turn around customer satisfaction in your collections business to see better results.

Why Is Consumer Satisfaction So Low?

Within the collections industry, most consumers are angry, frustrated, and even downright unhappy with the service they get from collections companies. Initially, this can seem that these individuals just do not want to pay the bill. Yet, more than often, it is the result of being unable to communicate their needs. Or, they feel as though the person on the other line isn’t listening to them. Sometimes, repetitive phone calls or a lack of information between two parties calling the customer leads to this type of turmoil. Pitting collectors with aggressive quotas against consumers in debt isn’t helping, either – and evidently, most compliance violations and complaints come in at the end of the month, when collectors are most stressed out.

First, Consider What’s Happening Around Them

You cannot make excuses for your customers. You cannot look the other way because they are having a financially tough month. However, it is important to understand what is happening around the customer that could be making hardship difficult. For example, are they struggling due to economic factors in their community or the country as a whole? Understanding why they are where they are can be valuable in helping you to offer a solution that fits their situation.

Improve Your Platform

Are you using the latest technology and resources to help you connect and remain connected with your customers? It is very common to find yourself unable to provide for the needs of the consumer if you have not done this. And, this can help to improve not just how satisfied your customers are, but also the company’s bottom line.

For example, are you able to offer a customized collection process that fits the needs and the behaviors of your clients? Do you need to update your solutions so you can allow your customers more flexibility, more insight, or even the ability to make a payment online? Does your system limit the amount of information that can be shared between parties, making it hard for you to meet your customer’s goals of being able to speak to someone who understands their situation every time? What could more data do to help improve your business and give your team better insight into your customers?

Take the time to consider what changes could help improve customer satisfaction within your organization. In many situations, making a change in the way you empathize with your customers as well as understand their needs, can help to improve the experiences you are having.

Learn more about the options and opportunities available to you today. When you do, you are sure to find a wide range of opportunities available to make small improvements that can create a better outcome for every customer.

Has your organization made the move to digital? It’s one of the most important transitions you can make today within any business and any industry. In the collections industry, digitalizing your company means a lot of change in the way you do things, but also in the tools, you can provide.

You may understand what digital collections mean for your business – it means more data and more managed control over your operations. What does it mean for your customers, then?

Your Customers Want a Digital Collection Agency

Be realistic here. How much money do you spend having people call and speak to voicemail? How many frustrating conversations happen that could be resolved with just a bit of a better method to improve communication? One of the things today’s consumers want is the ability to be reached digitally. How many of your customers appreciate threatening phone calls? Even if you consider how valuable this type of conversation can be, you know it doesn’t always lead to results.

Now, think about your consumer a bit closer. You have a large and growing base of millennials, in most cases. This group of people uses phones for anything they can handle online. Imagine, for a moment, the millennial. With money in his pocket, he is able to make a payment. Then he finds out he needs to write a check and mail it. Or, the person on the phone wants routing numbers and account numbers. Most millennials don’t have these on hand to simply offer. That person simply doesn’t make the payment because making the payment isn’t easy to do.

What Does This Mean for Your Organization?

In short, by making a few key changes, you can learn to communicate more fully with your customer base. First, allow them to have numerous ways to connect with your company. This includes making payments online, but may also mean using chatbots as well as text messaging for communication. You also want them to be able to handle all of these transactions and needs on their mobile phone – do not rely on them to make time while they are on their phone.

Also, consider the importance of building more empathy into your collections efforts. Having an empathy-based collection outreach program ensures you are providing your customers with respect and dignity. Many customers do not respect threats. They do not respond well to them, especially millennials. However, they are more willing to have a short conversation, talk about themselves and their needs, and to produce results for you. This type of approach benefits your customer but also your business.

It does not have to be difficult to make the switch to a digital collections system. Rather, simply invest the time in learning more about the ways you can improve the methods of communication you offer to your customer base. You may also want to consider the opportunities you have for creating an outreach program that helps to ensure your collections business is working for your customer.

TrueAccord is featured this week on Bank On It. Here’s what the host had to say:

Every week the show host John Siracusa talks with impressive fintech leaders and entrepreneurs, through conversation uncovers the remarkable stories behind them, their creations and the most important topics in fintech.

You can subscribe to this podcast and stay up to date on all the stories here on iTunes, Google Play, Stitcher, Spotify and iHeartRadio

In this episode the host John Siracusa chats with Ohad Samet, Co-founder and the CEO at TrueAccord.  TrueAccord is a different way of debt collection for companies that need debt collection services. Trueaccord is playing in a wide open space which hasn’t been innovated in decades, the model of TrueAccord is fully different and is an example of the types of business models laid out in the books, ‘Blue Ocean Strategy’ and ‘Zero to One’.

Click here to listen to the podcast.

We use machine learning in many ways – to automate our contact strategy, to optimize our offer strategy, and to automate processes. In this podcast, our senior data scientist Aviv Peretz and senior manager of data Sophie Benbenek talk about one example: an algorithm that uses a combination of debt and semantic features to classify and respond to emails we get from consumers.

Business owners and CEOs live and die by top-line growth. Acquiring customers, hitting scale and paying attention to unit economics are all actions that lead to positive cash flow and sustainable business growth. On the other hand, focusing obsessively on your top line and acquisition, while often correct, can leave a lot to be desired on the back end.

Read more from TrueAccord on Entrepreneur.com.

Our CEO, Ohad Samet, spoke to Tearsheet’s Zack Miller about our origin, differentiation, and our priorities for 2019 and beyond. You can listen to the interview on Soundcloud.

A new report from Hiya, a call blocking app, is out and it is grim.

The company says:

As our phones continue to be inundated by robocalls, many people no longer want to pick up the phone at all. Unfortunately, this has led to important calls being missed, such as those from your doctor, your child’s school, the bank, and others. In Hiya’s first State of the Call report, we provide insight into how Americans use their mobile phones on a monthly basis given the rise in robocalls. For example, we discovered that only 52 percent of calls Americans receive on their phones are picked up, which also means that almost half of calls are unanswered. Key findings from the analysis, include phone call behavior, call pick-up rates, call duration, and top business industries calling mobile phones.

The report, which can be found here, goes on to elaborate:

• 70% of calls that are “saved in contacts” are picked up
• 53% of calls identified as a business are picked up
• 38% of calls that are “not saved to contacts” are picked up
• 24% of calls that are not identified are picked up
• 9% of calls identified as spam are picked up

What do these numbers mean for your call and collect strategy? Our clients are calling it a “crisis”. What does your data say?

This is a second post in a series from our in house counsel, Adam Gottlieb.

A couple weeks ago I posted about the three main themes I heard in the public comment forum from consumer advocates, businesses, and trade groups on the new California Consumer Privacy Act (CCPA). I heard from a number of ARM compliance professionals that the themes highlighted provoked discussion on how this law might impact our industry in particular. Today I want to take the discussion further and talk a bit about some of my concerns for how this law will likely add significant complications to your compliance platform.

The California Attorney General’s Office has been hosting a number of public comment forums around the state to hear from consumer advocates, business, and trade groups about the new California Consumer Privacy Act. The Act will require that businesses inventory and map personal data, provide consumers rights to see what data a business has collected, and allow consumers to opt out of data selling or transmission.  If you have a website and interact with any consumers in California, you need to be concerned about the potential impacts of the CCPA to your business.

This law conflicts with state licensing requirements or industry best practices.

Section 1798.105 requires companies to delete a consumer’s information upon request.  In the ARM space collections agencies have both data provided by their clients on consumer accounts placed for collection and data they collect throughout the collections process.  Businesses in the consumer finance space, for example, need to keep this information to demonstrate how they handled the consumer’s account, to prove they followed the various laws regulating the industry, maintain accurate records for their finance departments, and to improve the collections process for consumers and clients.   There is a list of exceptions to the requirement to delete a consumer’s information upon request, in section 1798.105(d). Subsection (d)(7) says you may keep information “To enable solely internal uses that are reasonably aligned with the expectations of the consumer based on the consumer’s relationship with the business” and Subsection (d)(8) says you may keep information to “Comply with a legal obligation.” These provisions are extremely broad and ambiguous. What might be “reasonably aligned” with how a collection agency would use consumer information will result in differences of opinion.  Would a consumer expect an agency to keep a record for state or federal regulators? What about being able to provide a receipt for the consumer months or years later to prove payment on an account? Would a consumer, or even California regulators, agree that another state’s licensing rules that require an agency to keep that consumer’s records for a period of time trump the consumer’s request to delete that information? Without reliable guidance, definitions, or safe harbors this provision will result in disharmony, divergent expectations and likely legal battles.

A new opportunity for bad actors and for corporate espionage

Section 1798.140(c) states that the law applies to any business who 1) Has annual gross revenues in excess of $25,000,000, or 2) Alone or in combination, annually buys, receives for the business’ commercial purposes, sells, or shares for commercial purposes, alone or in combination, the personal information of 50,000 or more consumers, households, or devices, or 3) Derives 50 percent or more of its annual revenues from selling consumers’ personal information.  This provision alarms information security officers in large and small businesses alike.  On nearly every website, each time you visit a site and browse around your IP address is logged by the administrative system for the web page. As written, merely collecting an IP address could count towards the 50,000 threshold to trigger compliance with this law.

A Distributed Denial of Service attack (“DDOS”) is an increasingly common method for bad actors to try and hack into a business database by bombarding the company’s website with hundreds of thousands of web site visits, overwhelming the system and causing it to crash and distracting the company’s administrators and allowing the hacker to get easy access. This creates a scenario where any hacker going after valuable consumer records can add the headache of complying with CCPA. Another unpleasant possibility would be for an unhappy consumer or a competing business to launch a DDOS attack and then sending dozens or hundreds of information requests under the CCPA. Simply search online for “how to do a DDOS attack” and you will find dozens of articles and videos that explain just how easy it is for the average person with minimal technical knowledge to start their own DDOS attack. If your company does any business in California and any IP addresses used in this attack are from a California resident, your company will have to comply with the CCPA for all of your California consumers. These albeit too common scenarios are yet unaddressed in the law.

Client information? Agency information? Who is responsible for what?

Collection agencies must keep detailed records of how and when we communicate with consumers. Whether agents are calling, responding to letters, emailing, or texting, we must know the details of what we discuss to meet our federal and state compliance regulations, improve our chances of collecting on outstanding balances and to inform our clients on the status of their accounts. It is unclear in the CCPA whether an agency would be required to delete this valuable information at the request of a consumer. As written, the results of skip tracing could be considered personal information and if an agency is required to delete current addresses or respect an opt-out for using this information it is impossible to provide legally required disclosures to consumers. A likely unintended consequence may be more creditors choosing to sue clients than facing the legal uncertainty posed by the CCPA.

An issue raised by the CCPA particular to collections is there is no clear delineation between whether the client or the collection agency bears the responsibility for honoring a consumer request to opt out or to delete information. It is common for a consumer to communicate with both the creditor and the agency where the account is placed while the account is in collections. If a consumer tells the creditor that they are opting out and want their information deleted, does the creditor have to respect that request even if it makes the account unworkable? Will the creditor need to relay this request to the agency working the account and require them to delete consumer information? The law is unclear as to how the creditor or the collection agency can reasonably comply with consumer wishes without making the account potentially uncollectable.

These issues can be resolved before the law goes into effect.

The CA DOJ must build in a safe harbor provision to addresses these concerns that go beyond the consumer finance space into all forms of businesses interacting with consumers (think hospitals). We need to raise these issues with the regulators and ensure that there is no ambiguity around what information must be deleted or provided to a consumer upon request, the specific exceptions to this provision,  how to transmit that information to consumers securely, and to protect businesses and consumers from bad actors. If you are a business who interacts with consumers, you need to either attend the next public comment forum nearest to you or provide critical feedback to the regulators and to follow up with a formal written response. You can find information on the public forum schedule, along with an email address and postal address to send your feedback below.

Upcoming events: https://oag.ca.gov/privacy/ccpa

Email to provide feedback directly to regulators: privacyregulations@doj.ca.gov

Postal mail address to provide feedback:

CA-DOJ, ATTN: Privacy Regulations Coordinator

300 S. Spring St.

Los Angeles, CA 90013

ACA International members should consider participating in the meetings to learn more about the CCPA or submitting comments and share their experiences with ACA by emailing our Communications Department at comm@acainternational.org Attn: Katy Zillmer.