Category: Product and Technology

How TrueAccord Embraces Machine Learning to Create Positive Consumer Experiences in Debt Collections

By on December 23rd, 2021 in Industry Insights, Machine Learning, Product and Technology
TrueAccord Blog

By Laura Marino

TrueAccord’s Chief Product Officer, Laura Marino, was recently featured in the New Standard in Debt Collection panel as part of the Beyond Digital: The Next Era in Collections summit. As a civil engineer turned product management executive, Laura has a unique viewpoint on the evolution of machine learning in software across a variety of industries. In this blog post, Laura shares her perspective on machine learning at TrueAccord and in collections, in general.

At TrueAccord, we know that consumers prefer digital channels and self-service. We also know that just providing the digital channels is not enough. To truly engage with consumers we need to help them throughout the journey. This is where machine learning comes in.

What is machine learning?

Machine learning is an application of artificial intelligence (AI) that provides systems the ability to automatically learn and improve from experience without being explicitly programmed. In the context of collections, and specifically in the context of our consumer-centric approach to collections, machine learning is a wonderful tool to personalize the experience for each consumer, effectively engage with each of them, and ultimately help resolve their debt.

There has been so much hype around machine learning, but often companies that claim to do ML are really using fixed rules or heuristics (if a consumer does X, then do Y) without including any of the automatic learning and improvement. Or they may be using ML for a very specific, very limited scope – like automating some consumer support responses. The reason that leveraging ML is so difficult for something as complex as collections and recovery is that it requires a lot of expertise in data science and behavioral science, it requires a lot of user research, and it requires a lot of data.  This is not something that a company can decide to start doing overnight as an add-on.

How does TrueAccord apply machine learning to debt collection?

TrueAccord is leveraging machine learning and behavioral science throughout the entire journey, from initial engagement all the way to resolution. We were built specifically around the hypothesis that focusing on machine learning-driven, digital-first experiences was the way to transform debt collections. We have been doing this since 2013, and we have orders of magnitude more data than anyone else. Just to give you an idea: we send millions of emails per day, and hundreds of thousands of text messages per week and our ML engine learns from every open, every click, every action on our website, and every interaction with our call center agents. Because of all of this, we have something that is very hard for anyone to imitate.

Unlike traditional collections, we do not use demographic data like age, zip code, or creditworthiness to personalize the experience. Instead, we use engagement data about how the consumer responds at every step in the process.  

We have handled debts for over 24 million consumers and we have collected data about each individual interaction with those consumers. That wealth of data, combined with our ongoing user research is behind the ability of Heartbeat (our fully automated and reactive decision engine) to personalize the experience for each consumer.  We’ve seen this data-driven machine learning customer-centric approach lead to increased customer satisfaction, better repayment rates, and lower complaint rates.

Machine learning is used to personalize and optimize every step of the customer journey. The first thing we need to do is to effectively engage with the consumer.  For that we have several models: 

  • Cadence optimizer: determines the right cadence to communicate with each consumer about their debt. Specifically, it determines which day to send the next communication. We don’t have a fixed rule that says “send an email every x days.” Our decision engine decides it dynamically based on the type of debt, the consumer behavior, and where they are in the process. 
  • Send time optimizer: determines when during that day, communication should go out. A working mother who is busy with her kids in the morning and in the evening is more likely to check her messages in the middle of the day during her lunch break. A construction worker has a very early start to their day, may prefer to check messages at the end of the day.  We want our consumers to receive our communications during their preferred times so that they are at the top of their inbox and not buried under 50 other emails. Reaching people at the right time of day has a big impact. Due to our send time optimizer, we saw a 23% increase in liquidation for certain types of debts. 
  • Email content rater: we also want to make sure that the tone of our communication is one that will best resonate with a specific consumer. For each piece of content we send out, our content team has created multiple versions with different voices, ranging from very empathetic to more ‘to the point’ because different people respond to different styles. Heartbeat chooses which one to send based on what it has learned from the behavior of each consumer. 

After engaging the consumer with the right cadence, timing, and content we want to make sure that they commit to a payment plan and stick to it until their debt is resolved. For that, we have machine learning models that determine the best combination of discount and length of payment plans to offer to each consumer. The options that the consumer sees when they get to the payment plan page are tailored to them based on what Heartbeat believes will work best. The consumers can build their own plan but, if we can proactively offer options that work, we make it easier.

We also have a ‘payment plan breakage model’ that helps us identify consumers who are at risk of not making a payment so that we can proactively reach out to them and give them options. With this we were able to increase the resolution rate among customers at risk by 35%.

What do customers think about TrueAccord’s model?

We have a lot of very positive feedback from our consumers which I attribute very much to our machine learning capabilities. It is one of the things that I think is so exciting for everybody who works at TrueAccord. We consistently get messages saying, “Thank you for making it so easy. Thank you for allowing me to do it via digital channels without having to talk to anybody.” And then when people call with questions, our call center knows that they’re there to help. People definitely respond very positively to the approach we’re taking to collections.

This content originally appeared as part of the Beyond Digital: The Next Era in Collections summit. Watch the entire summit here. 

Building a Digital-First, Third-Party Collections Solution with Snap Finance

By on August 13th, 2021 in Industry Insights, Machine Learning, Product and Technology

In 2019, Todd Johnsen, Snap Finance’s Senior Manager of Collections Vendors, was charged with doing something that had never been done at Snap before: developing a third-party collections program. According to Johnsen, “At that time, the only recovery program for charge-off accounts was a call-and-collect settlement at tax season. I knew we could do better, but we’d have to start from scratch.” Johnsen also found a large amount of backlog accounts that had never been worked by a collections agency, as well as the need for a forward flow third-party recovery program.

Johnsen and team surveyed their options: they looked at both traditional agencies (predominantly making outbound calls) and digital-first collections solution providers, like TrueAccord. Johnsen was particularly interested in how digital-first providers like TrueAccord used machine learning to optimize their relationships with consumers via digital channels like email, SMS, and push notifications. 

“My thought process was — we work with subprime consumers who may have bad associations with debt collection,” said Johnsen. “This audience may have already had experiences with incessant collection phone calls, and they are used to avoiding them. I wanted to find an agency that was doing things differently. I knew that TrueAccord was using technology and digital channels in a way that other providers weren’t.”

While Johnsen was curious about working with a digital-first agency like TrueAccord, he wasn’t ready to go all-in immediately. The Snap Finance team decided to engage both a traditional agency and TrueAccord and compare the results. In evaluating the competing partners, key considerations included liquidation rate performance, security and compliance, and optimization efficiency. The result? TrueAccord delivered better results across all measured parameters.

“The reality of the results really knocked me out,” said Johnsen. “What we saw was almost 25-35% better performance on the accounts that we placed with TrueAccord, compared to the accounts we placed with traditional agencies. It was a real eye-opener. In fact, TrueAccord is number one in every tier I have them in. We’ve seen nothing but huge benefits as a result of that individual, digital-first interaction that TrueAccord tailors to each consumer.”

To learn more about TrueAccord’s work with Snap Finance, read the full case study.

TrueAccord Offers Buy Now, Pay Later Clients the Opportunity to Improve Repayment Success

By on July 6th, 2021 in Industry Insights, Product and Technology
TrueAccord Blog

If you aren’t familiar with Buy Now, Pay Later (BNPL) yet, it’s a safe bet that you will be soon. The service, which allows consumers to split a purchase into several payments over a set period of time, has been popular in other countries and has been gaining traction in the U.S. 

To quantify the growth in BNPL use, a February 2021 survey conducted by The Strawhecker Group (TSG) of more than 1,500 U.S. consumers found that nearly two in five (39%) had used a BNPL service and predicted that BNPL volume will double by 2025. A separate March 2021 survey by The Ascent found that 56% of U.S. consumers have used a BNPL service, a nearly 50% increase from July 2020. 

This type of payment plan, offered by BNPL companies, has clearly caught on with consumers, leading to rapid growth (in some cases 200% or more year-over-year in 2020) for the main players.

So why do consumers love this offering? The question should be, why wouldn’t they? 

  1. The service performs like a short-term credit card, with generally no interest or fees due, unless the consumer misses or is late on a payment. 
  2. It’s simple and convenient to use when shopping online, with payment offers prominently displayed at checkout. 

It’s easy to see why consumers would opt for a more flexible, pay-over-time purchase option. After trying BNPL, users tend to like it and become repeat customers – TSG’s research found that nine out of ten people who have used BNPL found it reliable and that 85% of consumers plan to continue using it. TSG’s research also confirmed that the option to buy now and pay later tends to make people spend more than they would otherwise, potentially outside of their budget. BNPL will continue to be an attractive payment option for consumers, especially if it’s eventually integrated into in-person retail transactions, and the need for consumer education will grow. 

As a digital debt collection company, TrueAccord helps clients collect on unpaid debts, but is equally committed to helping consumers achieve long-term financial fitness and stability. TrueAccord works with many BNPL customers who for one reason or another did not meet the terms of the payment plan and ended up in collections by helping them understand their debt, offering flexible repayment options and educating on smart borrowing and spending. TrueAccord aims to usher BNPL consumers through and out of debt while delivering the best possible experience, and it’s that collaboration that will lead to better business for BNPL providers and better financial outcomes for consumers.

If you’re interested in learning about BNPL service providers and our work, check out our recent webinars co-hosted with Klarna and Affirm.

Klarna’s Digital Debt Collection Journey: Outsourcing Without Sacrificing the Consumer Experience

By on June 15th, 2021 in Product and Technology

Klarna, the highest-valued private fintech in Europe, is on a mission to make shopping simple, safe and smooth, for both consumers and retailers, through its suite of payment products and services. From its inception in 2005, Klarna has not compromised on providing a seamless consumer experience — even when it comes to consumers in collection. 

With a high standard for customer experience and in an effort to integrate collections seamlessly with their product, Klarna initially opted to keep collections in-house. For five years the company had great results with in-house collections, but as Klarna expanded to new markets and added new products, scaling in-house collections while maintaining a best-in-class customer experience strained the company’s resources and became less feasible. 

This led Klarna to begin considering a third-party collection partner. By this time, the collections industry had evolved. New players like TrueAccord were building digital-first collection solutions that vastly improved the customer experience via personalized outreach, flexible payment plans, and a self-optimizing, machine learning-driven performance engine.

It’s easy to underestimate the expertise involved in building an effective, compliant digital debt collection engine, and partnering with the right collection solutions provider would free up valuable internal resources. Klarna’s priority was to focus on their core business and engage an expert partner who would be able to build a world-class collection operation for them — one that would only enhance their consumer experience while not sacrificing brand image. 

“We look at collections partners the same way we look at hiring team members: we only want to work with the absolute best. We wanted to partner with a company that truly takes care of consumers,” said Jan Hansson, VP Debt Collection, Klarna. 

Other key considerations to moving away from in-house collection included, data science expertise, engineering talent, compliance resourcing and industry knowledge. After doing their due diligence, Klarna decided to partner with TrueAccord as a collection solution provider. TrueAccord stood out from competitors in two important ways: customer centricity and digital and multichannel capabilities.

By partnering with TrueAccord, Klarna was able to increase liquidation rates and achieve better holistic results, with retention rate a key indicator. Moving to a partnership with TrueAccord from in-house collection also allowed Klarna to free up valuable internal resources and refocus on their key business functions. Klarna is now expanding their engagement with TrueAccord to include more accounts and looks forward to growing the partnership even more in the future. 

“We are so proud to work with TrueAccord,” said Sebastian Siemiatkowski, co-founder and CEO, Klarna. “Putting technology to use for the people instead of against the people is the next generation of tech.

To learn more about TrueAccord’s work with Klarna, read the full case study or check out our recent webinar, “Digital Debt Collections 101 with Klarna”.

Pitfalls on the Path to Digital Debt Collection

By on August 25th, 2020 in Industry Insights, Machine Learning, Product and Technology, User Experience

Banks are accelerating their adoption of new digital debt collection tools in anticipation of a “tidal wave of consumer debt issues” when government stimulus programs end and financial institutions stop offering forbearance and loan deferral options.

That’s the premise of a new article in American Banker highlighting a variety of technology-powered strategies banks are using to make debt resolution more automated, conversational, and empathetic. These approaches range from the convenient (more flexible self-service payment options) to the high-tech (robotic process automation). 

The American Banker article highlights promising signs of progress, particularly for industry players that have not always been known for digital adoption. KeyBank, for example, is in the process of rolling out a self-service digital payment portal designed to offer banking customers privacy and flexibility in resolving payments. And Alabama-based Regions is implementing digital messaging and intelligent interactive voice response (IVR).

At the same time, the article shines a light on the massive challenges facing any financial institution looking to implement intelligent digital debt collection at scale. Here are three common hurdles on the path to digital debt collection maturity – and why they matter:

Challenge #1: “One-size-fits-all” approaches

The challenge: In its overview of Regions, the article makes reference to a single conciliatory messaging tone used in all outreach to delinquent customers. 

Why it matters: Consumers differ vastly in their preferences and responsiveness to digital touchpoints. For example, one consumer might respond to a friendly message delivered by SMS, while another might respond best to a straightforward message delivered by email. As a result, a one-size fits all approach falls short of realizing the potential – in both performance uplift and customer experience – of true one-to-one personalization.  

The TrueAccord approach: HeartBeat, TrueAccord’s patented machine learning platform, mines through tens of millions of data points to optimize digital outreach on the individual level within a programmed set of compliance rules  – and continues learning the more data it analyzes.  

Challenge #2: Narrow, channel-specific use of machine learning 

The challenge: Another challenge that banks face in scaling their use of intelligence – including artificial intelligence (AI) – is the limited deployment of algorithms and optimization within a single kind of channel, such as in a call center environment. The article profiles a collections and business process outsourcing company, for example, that developed an AI-based virtual assistant that can handle most inbound phone calls.

Why it matters: Machine learning and artificial intelligence (AI) are powerful tools for restoring intimacy and relevance to customer relationships at scale. At their most useful, these tools should be deployed to personalize the customer’s full experience with a bank – not just the limited interaction on one channel. 

TrueAccord’s Approach: HeartBeat captures a continuous data feedback loop and optimizes for each customer touchpoint across a variety of digital channels, ensuring that each customer is being reached on the channel that is most relevant for her.  

Challenge #3: Building a truly comprehensive and flexible self-serve portal

The challenge: Constructing a digital portal that drives consumer adoption and usage takes major work. To truly match the convenience of online banking, digital tools must also allow consumers to adjust the length and installment amount on a payment plan, defer a payment, dispute all or a portion of their debt, apply for a hardship pause on their debt, and much more.

Why it matters: Research suggests that customers want to be able to self-serve. But doing so requires the full, flexible range of interaction options that would be available to them through traditional analog channels.

TrueAccord’s Approach: Through a robust and flexible digital platform, TrueAccord offers  a best-in-class self-serve experience: over 95% of users resolve their accounts without ever directly communicating with an agent. 

Ultimately, digital debt collection technologies offer banks the ability to build lasting relationships with their customers. As Kimberly Snipes, consumer chief information officer at KeyBank puts it in the American Banker article: “We want our customers to say, I hate that I had that situation, but I felt like my bank was working with me, not against me.”

Being aware of the challenges on the path to digital debt collection – and having a plan in place to address them proactively – can help financial institutions ensure that they’re set up for long-term success. 

About TrueAccord

TrueAccord is reinventing the relationship between creditors and lenders with a machine learning-driven, digital approach to debt collection. Our technology personalizes outreach to each customer across digital channels, continuously optimizing for performance while delivering a customer experience that builds long-term brand loyalty. Schedule a demo today to learn more. 

How to offer better products in collections: An interview with Parker Lyons

By on June 17th, 2020 in Industry Interviews, Product and Technology
people drawing a plan on a whiteboard

New products in debt collection seek to solve decades-old problems with traditional collection strategies. Products and services seek to improve the collections process and aim to improve contact rates, liquidation rates, brand perception, and ease of access.

When you combine agile product development with its application in collections, you’ll see new solutions to old problems. I recently spoke with Parker Lyons, TrueAccord’s Product Director, about his personal product philosophy, how he and his team are approaching product development, and the challenges faced by new product offerings in the space.

Profile photo of Parker Lyons
Parker Lyons, Product Director

Hi Parker! Thanks for joining me. I wanted to kick us off with an introduction. You’re fairly new to the collections industry. Can you walk me through what brought you to product development in debt collection?

Sure! When I finished college I started out in advertising for consumer packaged goods. I was living in Colorado at the time, so I was working on some ads for Coors Light and Polaris snowmobiles. I spent a few more years in advertising, but I ended up taking an interest in energy and renewables. I saw companies in the space with really impactful missions and the growth potential, so I went to school to get my Master’s [Degree] in Environmental Studies. 

I ended up making my way out to California and started in solar. I met some people at Spruce Finance who are now working at TrueAccord, and had the chance to see the work TrueAccord is doing. I always had a very “Tony Soprano” view of debt collectors, but TrueAccord is something different. It’s a different type of mission, and we’re really helping people get back on their feet. 

We’re happy to have you! How do you translate your product experience over from such a different industry?

Most recently I was with a company called BlueWave Solar that was a community solar business. Our product allowed consumers to subscribe to a percentage of a solar farm and apply the savings generated from that farm to their utility bill. 

So we really were a servicing company. We had clients who were big banks and energy companies whose assets might differ from debt collectors managing portfolios, but the goal was the same: they wanted to keep accounts and cash flow moving.

And as you’ve started to consider meeting that goal for clients in debt collection, what are some things you’ve learned about the industry? Do you see consistent issues that you think need to be addressed?

Traditional debt collection platforms are using reliable systems. Call-and-collect methods have worked for a long time, but performance is waning and people aren’t picking up the phone anymore. A lot of the appeal though is that it’s a relatively simple model to get moving. You hire agents, you train them, and they start calling. 

On the other side of that, we see some resistance to new technology, and I think that people are worried about it being too complex. So that falls on us. We have to meet clients where they are and focus on making integration easy. We have to maintain simplicity even though machine learning and digital tools can be very complex. 

How do you go about making your product more easily digestible then? Where do you start when you’re trying to solve that problem? 

It starts with knowing your user. Who are they? What’s their problem? You have to have a deep understanding of what makes them tick and their pain points because you then have to ask yourself “How do we solve that problem for them in a way that no one else can, or cheaper than someone else can?” In product management, we say that you’re responsible for creating a product that is valuable, usable, feasible, and viable. With those things in mind, you can turn your potential client’s issues into your value proposition and the capabilities of your company.

In product management, we say that you’re responsible for creating a product that is valuable, usable, feasible, and viable. With those things in mind, you can turn your potential client’s issues into your value proposition and the capabilities of your company.

As an example, we’re expanding with TrueAccord Retain, our product for first-party pre-charge-off solutions. We’ve scaled our capabilities with artificial intelligence and machine learning in late-stage collections, and early-stage is a natural extension of our growth and service value. In the age of COVID though, we’re seeing an increasing need for early-stage.

The major pain point we’ve seen is that it’s expensive to spin up and scale massive call centers quickly. We have a proven tech stack that can address the need to start quickly. Now it’s a matter of evaluating and understanding the unique challenges of collecting early-stage debts.

Are there projects outside of Retain that we’re currently working on that you’re allowed to share?

Our team is constantly asking “How do we bake all of our learnings into best practices?” One of our biggest projects right now is improving our own internal efficiencies. Everything that we’ve built so far has worked, but we need to—with higher account volume and higher growth rates—automate more of our own processes and move away from manual practices.

If you’re looking for more details on TrueAccord’s growing technology, here’s a conversation with our CEO, Ohad Samet all about our evolving offerings.

Another important piece of that is ensuring that processes are thoroughly documented. These growing pains are expected when an organization is growing quickly, and the more we grow, the more diverse our client base will get. We have to build on a foundation now that can accommodate that diversity consistently.

I’m also reflecting on what we know about our current users. We have to figure out the changes we hope to deliver for existing and future clients. Building a clear roadmap for that is huge which is why we’re working so closely on improving our internal organization. Improving our internal planning directly improves our product offering and client performance. 

That’s really exciting to hear. I know how much the startup world prides itself on its ability to pivot quickly, but creating a more defined system makes that system scalable. We’re all incredibly excited to see what comes next!

Are you ready to start scaling your collections solution quickly? Talk to our team and get up and running fast!

Code-driven compliance is the future of debt collection

By on June 12th, 2020 in Compliance, Product and Technology

Compliance regulations in the debt collection industry are built to protect consumers in debt from potentially predatory practices and ensure an equitable collections experience. For debt collection agencies, this often requires building out entire departments dedicated to keeping the agency in line with ever-changing debt collection laws and regulations. These teams are committed to reducing risk wherever possible.

One risk that is built into traditional debt collection practices is the potential for human error in a contact center environment. Digital debt collection platforms, however, offer code-driven compliance solutions that range from supporting existing agents to operating largely without the need for agent intervention.

Digital compliance solutions

Agent support

Operations managers throughout the collections industry cite high turnover rates in contact centers as a major challenge. While the exact number changes drastically depending on who you ask, contact centers may see annual agent turnover rates as high as 100%, but properly training contact center agents takes time (at TrueAccord our training process spans a full six weeks). High turnover in a space that requires thorough training means that newer agents may make mistakes when navigating important and complex regulations.

Some of this concern can be alleviated through the introduction of a curated content management system that provides prompts. These systems can be built with pre-written responses that adhere to compliance guidelines that improve agent compliance performance. While this may help to reduce the risk, the consumer experience is less than ideal.

Code-driven digital-first debt collection 

Digital-first debt collection agencies and other debt collection software tools provide systems that allow for close control over what actions are taken and what messages are sent to consumers. These messages are carefully crafted by a dedicated content team, reviewed by a team of legal and compliance experts, and are easily accessible for auditing purposes. They are also then managed by the digital system once they are implemented. 

Most importantly, these messages are then integrated into a digital, consumer-driven payment experience. More advanced systems use artificial intelligence and machine learning to customize a unique customer experience that is optimized for engagement and liquidation.

Compliant content creation

Pre-approved consumer-facing content

Building a digital debt collection system starts with creating compliant and adaptable content. Every email, text message, and landing page in a digital ecosystem is created by a team of dedicated content writers who draft and experiment with different approaches to encourage customer engagement. The guidelines used to draft these messages are shaped by collections laws, policies, and regulations. 

Are you interested in learning more about the content creation process? Here’s an interview with one of our content managers all about engaging with empathy.

Teams can also draft content that meets the needs of individual clients with specific brand considerations. Once the content is drafted, it is processed and reviewed by a team of compliance experts prior to being added to a content repository that the digital system can draw from.

Scalable compliance review process

The next step is to have a team of legal and compliance experts from within the debt collection agency review the content to ensure its adherence to the same regulations. Based on the client’s preferred level of involvement and resources, such a review process may also include a compliance team within the client’s organization. This process lays the foundation for compliant communication down the line.

Easily audited communication history

The content auditing process comes further down the line, but it is important to build that foundation early for the same reason stated above. Traditional call-and-collect debt collection agencies may record voice calls and even provide automated transcriptions of these calls. Unfortunately, these processes are not perfect because auditing activities can only review sample cases. Digital systems are able to accommodate a full audit-specific interface.

At TrueAccord, 96% of consumers resolve their accounts without communicating with an agent, so the vast majority of communications that exist are entirely automated and recorded. Compliance staff can easily search for individual accounts to review and evaluate all collections activity across multiple channels. Digital systems overall offer improved data retention and tracking to provide a clear picture of performance. 

Because the system saves this data, it’s easy to investigate how it responded to a particular message, as well as why it made a specific decision. When these communications are controlled by code, decisions are easy to trace and replicate.

How do these steps lay the foundation for a scalable digital compliance system?

Once content is in place, and there is an established process for reviewing it, digital debt collection platforms can connect to consumers. At TrueAccord, our machine learning engine, Heartbeat, is able to draw from our content library and improve communications with a consumer over time. Digital systems reach out to consumers when and how they prefer and these communication decisions are driven by data, not by individual agent decisions or potential biases.

Digital systems reach out to consumers when and how they prefer and these communication decisions are driven by data, not by individual agent decisions or potential biases.

Digital debt collection systems rooted in machine learning are dynamic. The content they choose to use for an individual consumer is determined not only by historical data but how a consumer responded (or did not respond) to previous communications. Every single message in the system is vetted to meet compliance standards, and the review process is always ongoing to maintain those same standards.

At any point in the customer lifecycle, a consumer can opt-out of communications by replying to a text message or by clicking a link in an email that lets them easily unsubscribe from future communications using that channel. Each email and payment page also provides a link for consumers to request debt verification via a few simple online steps.

Coded compliance continues to scale

As the system scales and communicates with more consumers in this way, it’s able to continually enforce compliance without needing to be retrained because it is built to be compliant from the ground up. Built-in compliance checkers can prevent the use of contact methods that the consumer has unsubscribed from or ensure they do not receive a payment offer that the creditor has not approved. 

Any compliance updates—such as new rules from the Consumer Financial Protection Bureau’s proposed rules—can be implemented securely and quickly at a company-wide scale rather than retraining on an agent by agent basis. 

An improved, more secure consumer experience

Collections regulations and laws are largely driven by a need to protect consumers from bad actors in the industry. Digital debt collection empowers consumers to manage their accounts at their own pace and communicate using their preferred communication channels.

By evaluating content before it is ever sent and programming a platform that delivers unambiguous content you can reduce confusion and improve the user experience. Clear, compliant messaging enables consumers to resolve their accounts through self-service without added support. This leads to a dramatic reduction in consumer complaints, and in TrueAccord’s case, many positive online reviews. 

A code-driven future for debt collection

Code-driven compliance offers predictable, pre-approved, and consistent collections methods. Coupling digital platforms with machine learning creates a system that improves over time and optimizes for a better user experience, guided by consumer preferences and shaped by compliance guidelines. This minimizes the need for agents to manage an account from start to finish and instead allows them to focus on more complex customer cases.

New technology is often seen as a risky investment, but digital debt collection systems offer more compliance security and more transparency—for consumers and creditors—than traditional debt collection agencies. Digital debt collection solutions not only evolve to meet consumer needs, but they can also continually adapt to changing regulations and quickly meet compliance requirements. 

Do you want to see the power of a code-driven compliance platform in action? Reach out to our team today to see what this looks like at TrueAccord.

TrueAccord Q&A with Ohad Samet

By on May 15th, 2020 in Product and Technology, Webinars

The age of digital communication has led to a dramatic shift in the way companies do business and in the way that people communicate generally. The collections industry is not exempt from this change. On April 22, TrueAccord’s CEO, Ohad Samet, spoke on how TrueAccord is pioneering a radical transformation for consumers and collectors alike, especially in the wake of the COVID-19 pandemic. This is a summary of the webinar. 

Stop by our YouTube channel if you’d rather watch or listen to an abridged version!

COVID-19 & challenges to the call center model

Attempting to reach consumers in debt is becoming increasingly challenging. Reaching these same consumers during a rapidly evolving recession, when tens of millions of people in the US are filing for unemployment, is only making it more difficult. Beyond this, social distancing practices are limiting the ability of traditional call-and-collect based agencies. 

There has been some progress made on improving work-from-home opportunities in collections, but 78% of TrueAccord’s clients are experiencing severe disruption of their 1st- and 3rd-party call center operations. This includes some collections partners shutting down entirely.

High agent turnover rates are a common issue for collections agencies due to the difficult nature of the work. Agencies typically expect turnover rates of more than 70%, and these numbers are climbing in the midst of the pandemic. All of these factors have largely left the collections industry in a holding pattern as we wait and see what changes may come, but what else can we do today to make change?

Finding the solution today

TrueAccord is focused on building sustainable, consumer experience-focused collections systems and tools. Our machine learning algorithm, Heartbeat, is a patented, scalable, tool that personalizes the collections experience with empathy-driven content for consumers. The multi-armed bandit algorithm learns from customer interaction and optimizes based on these behaviors. 

Multi-armed bandit algorithms go beyond traditional decision trees or A/B testing. They optimize and learn as they grow! 

What’s the difference between machine learning optimization and demographic segmentation?

Demographic segmentation is dividing a group of individuals based on demographic information such as age, gender, race, marital status, etc. when deploying a process or function. Machine learning optimization is teaching a computer model to evaluate the choices individuals make to improve a process or function. For example, in the credit and collections space, debt collectors typically approach customers during tax season to discuss using any tax refund to pay existing debts.

Our Heartbeat system learned that consumers do not like these suggestions—consumers who received content without the phrase “tax refund” paid their debt during tax season (likely with their tax refund) more than those consumers who received content with the words “tax refund.”

Samet explained, millions of consumers have completed payments and established payment plans using TrueAccord’s platform (through Heartbeat). The options employed by Heartbeat are based on its historical data learned through continued experimentation without access to an individual’s demographic information. Based on the millions of users that came before them, we can depend on Heartbeat to function as a complete virtual agent with built-in years of experience.  

Customizable communication offers a personalized experience

While email is TrueAccord’s primary communication channel, Heartbeat is a multi-channel solution that includes but is not limited to, SMS (with consent), push notifications (with an opt-in), and a self-serve interactive platform. Other digital services segment channels to test with different audiences, or may specialize in one, requiring creditors to work with separate vendors. TrueAccord uses a multi-channel approach to reach consumers how they prefer.

In fact, more than 95% of users on our platform resolve their accounts without ever communicating directly with an agent. 80% of the consumers that do reach out to our team are able to resolve their accounts via email. Our dedicated team of agents is available to speak on the phone, but our digital tools allow each agent to service more than 80,000 accounts (and that number continues to grow). Some agencies are gradually scaling digital strategies, they still account for less than 30% of their overall operations.

In fact, more than 95% of users on our platform resolve their accounts without ever communicating directly with an agent.

While Heartbeat operates as the frontline of our digital strategy, TrueAccord’s phone number is always readily available. We firmly believe in using only one phone number, (866) 611-2731. This creates brand familiarity, drives engagement, and is consumer friendly. 97% of consumers ignore calls from unknown numbers because many companies buy phone numbers in all area codes. Their goal is to appear as if they are calling from the same area code as the consumer.

TrueAccord does not want to trick the consumer into answering an unknown call.  We want to make it easy for consumers to search for our number online, do their own research about TrueAccord, and respond on their time. When consumers do reach out to our team, TrueAccord agents are trained to focus on customer care and on helping consumers to build the right financial plan to meet their needs. 

Combining this approach to customer care with our machine learning algorithms allow us to expand our offerings to include new tools like a detailed self-service portal for payment plan adjustments. Consumers can customize payment plans that work for them, and this has led to a spike in plan creation and higher successful plan completion rates. 

This includes payments related to sudden surges in income like stimulus checks. Here’s what our data shows us.

TrueAccord doesn’t want to pressure consumers to make payment amounts they cannot afford and make deadlines they can’t meet. Instead, we enable the consumer to fully personalize the repayment experience into a plan that meets the consumer’s ability and time frame. “We sell the experience of being debt free.” Samet says.

A different approach to collections

Traditional call-and-collect agencies are built on foundations similar to telemarketing: high agent turnover rates result from low-base, high-commission pay rates. These collectors are incentivized to collect and meet call minimums and payment quotas that lead to a rapid rise in complaints toward the end of pay periods as deadlines loom. 

Machine learning algorithms don’t have the same stresses. The bounds of payment plans are defined by clients in advance. Heartbeat leans on historical customer data, consumer engagement behavior, and chooses content to inform consumers about the stress free experience of repaying debt using customizable on-line repayment tools. If the customer has any questions, they can always check in with our team by phone or email!

Changing the industry

TrueAccord’s changes are continuing beyond our technology. Our leadership team works directly with the Consumer Financial Protection Bureau (CFPB) to understand evolving best practices and remain at the forefront of regulatory change. Members of our legal team also work with the Receivables Management Association (RMAi), the Consumer Relation Consortium, and Association of Credit and Collection Professionals ACA International boards to keep up with trends in collections. 

We submitted our own comments to the CFPB’s Notice of Proposed Rulemaking. You can read the full letter here!

These experiences all point in a similar direction: legislators want to see fewer phone calls, more reliance on technology, and more consumer choice in the collections space. Building compliance adherence into TrueAccord’s system drives brings these changes together in one place.

How does TrueAccord fit into existing collections strategies?

TrueAccord is able to service at any stage in the debt cycle (early, late, warehoused, etc.), across segments, with competitive results. Our platform is built to accommodate your team’s needs, and we recognize that not every collections agency works perfectly in every segment. 

We can easily increase or decrease the use of specific channels and optimize in whichever segments you see fit. While larger placement volumes provide more data and by extension clearer automated decision making, we fit into your strategy at any stage. 

Pre-charge off

The same tech that supports TrueAccord’s post-charge-off product also offers new advantages and easy onboarding within a few short weeks for early stage delinquencies. Heartbeat can  supplement your existing call center strategy. We’re also equipped to provide different levels of service in different phases. 

This can be a small change to your normal business practices: uploading a traditional “dialer file” to our system. We can email payment reminder content driving your customers to your existing teams, tools, and webpages, while maintaining your branding. This can also involve full outsourcing  through the use of our online self-service individualized payment portal as well as use of digital channels to drive engagement. 

The next steps

We continue to scale and develop new tools for consumers to self-identify their current financial needs and provide new ways to work with them to adjust payment plans. We know that demanding payments isn’t nearly as effective as empowering consumers, and finding the right middle ground helps all parties involved. 

Getting started with TrueAccord is easy with inbound file receipt or APIs and standardized, out-of-the-box reporting. It can be as simple as a .CSV upload to our secure dashboard or as complex as a long-term integration period designed to align our systems, policies, and procedures to your own.

Ready to join the future of debt collection? Do you still have questions about how TrueAccord can help your team? Get in touch with us today!

How do you correct (or prevent) email deliverability issues?

By on May 4th, 2020 in Product and Technology

Email is only one of many powerful digital channels at your disposal when it comes to connecting with consumers. Regardless of which of these channels you decide to use to reach those consumers, you also have to decide how to measure the effectiveness of your new digital tools. 

We’ve discussed email deliverability and what it means to collections, but once you have the proper email infrastructure in place, your team’s focus should shift toward both measuring the impact of those email efforts and understanding what declining performance can mean to your collections process. Here are a few things to keep in mind so that you can minimize the impact of deliverability issues and optimize your contact rates.

Build a baseline

The first step in effectively correcting email deliverability problems is to start with a baseline that you can compare to. Measuring the impact of issues on your digital collections strategy requires your team to establish what “normal” looks like for your business. Some engagement-related metrics that matter most to email-based digital debt collection typically include:

  1. Open rates
  2. Click rates
  3. Conversion rates

For email marketers, conversion rates signal when users take a desired action after engaging with marketing material. These actions often involve making a purchase or signing up for a product demo. In collections, conversion rates are measured by a combination of email engagement metrics and the more traditional liquidation rates. The desired action your collections team is looking for is a promise to pay or a completed payment.

With a baseline set for your digital performance, you can compare your average conversion rate to any fluctuations you see in your deliverability. Tracking this data over time then helps you to clearly measure how your deliverability rates impact collections and how specific deliverability issues (send volume, send time, content, etc.) impact your bottom line.

Identify and monitor engagement with deliverability

Email deliverability rates directly reflect whether or not you are reaching consumers’ inboxes, but your engagement shows you whether or not your consumers are taking action. Tracking deliverability in tandem with engagement metrics can provide insight into what changes need to be made to accommodate potentially shrinking inboxing rates. Here are two important correlations to keep an eye on.

Stable open rates and decreased deliverability

If you notice a decline in deliverability, but consistent open rates, there is a strong chance that your email list is out of date or a newly imported list contains incorrect contact information for your consumers. Consumers in your system that are listed correctly are continuing to engage at the same rate, but you have a higher number of bounces or failed sends.

Email validation is an important step in limiting the chances of a situation like this happening as this process confirms whether or not email addresses are legitimate. Large lists may contain small typos or transpositions that would turn an otherwise valid email address into a useless string of characters.

Decreased open rates and decreased deliverability

In the event that there is a decrease in both open rates and deliverability, it is likely that your send domains (the part of an email address after the @ sign) are being blocked or blacklisted. Fewer recipients are actually receiving your emails and even fewer are opening them.

There are a number of steps an organization can take to prevent this downtrend including using multiple domains and carefully scaling an email strategy before attempting to reach thousands of consumers. Attempting to remedy these issues after they have happened may prove to be too late.

Recognize the scope of an issue

Sending collections emails at scale can mean trying to reach thousands of consumers per day. It’s difficult to imagine a process of that scale without some sent emails not bouncing or simply being ignored.

TrueAccord successfully delivered millions of emails. Want to learn how we do it? Check-in with our team today.

As we mentioned earlier, a massive downturn in deliverability can lead to email domains being blacklisted which means those messages will be relegated to spam folders across ISPs (internet service providers). TrueAccord’s in-house Head of Email Operations, Raja Datta, has some extra advice (which was also contributed to a segment for Kickbox) for those looking to prevent these issues from causing further damage.

Attempting to recover your domain authority (proving to ISPs like Google or Yahoo that you aren’t a spammer) at that stage is remarkably difficult, but if you recognize a downtrend in click-rates, you can make relatively minor changes to the content of an email (phrasing on a call to action, different subject lines, etc.) to improve engagement. 

The scale of your deliverability issue will dictate how urgently you have to respond to it and how many resources must be put toward its resolution. Tracking these potential problems early and often can lead to intercepting them before your email strategy is significantly weakened and send domains are entirely blacklisted; update your subject line now and avoid getting blocked later.

Getting to the root of deliverability issues will ensure your email strategy is sustainable for years to come. As right-party contact rates continue to fall and digital channels take priority over phone calls, starting to track your email performance now and understanding how to measure your digital strategy’s success will get your team ahead of the collections curve. 

Does this all seem a bit daunting? We get it. Talk to our team today to see how we can help perfect your digital collections strategy.

Debt collection software vs. digital collections agency

By on April 30th, 2020 in Product and Technology

Traditional call and collect strategies are becoming increasingly difficult to maintain. High agent turnover rates, plummeting right party contact rates, and ever-evolving legislation are driving companies to abandon long-standing practices and seek new solutions.

The two driving options for bringing collections strategies into the digital world are integrating digital collections software into an existing plan or partnering with a 3rd-party, digital debt collection agency. What are the key differences and which one will work for you? Let’s take a look at the pros and cons of each to help your team make a decision.

Debt Collection Software

Collections software can help existing teams build new, digital infrastructure. They cover a wide range of services including:

  • Customizable self-service portals
  • A/B testing for communication
  • Engagement reporting
  • SMS and email automation
  • Chatbots
  • Pay by text tools

These tools offer the ability to engage consumers based on their preferences for time and digital channels. They also bridge the gap between traditional collections methods and consumers that prefer emails and online portals over phone calls.

Compliance support

Software as a service (SaaS) companies in the collections space also boast built-in compliance adherence and aim to decrease the risk of agent-driven call centers.

Cons

Debt collections software solutions can offer incredibly extensive performance evaluation and automation tools, but the volume of tools available can easily become overwhelming for teams new to a digital experience. This can lead to underuse and turn a powerful tool into a wasted resource.

There is also a struggle at the industry level to help transition collections into a digital space. Call and collect strategies continue to be the norm for collections, and the voices seeking to shift the industry in a new direction are met with the Innovator’s Dilemma: “the very decision-making and resource allocation processes that are key to the success of established companies are the very processes that reject disruptive technologies…”

This caution is multiplied by the fact that these software platforms may not be all-in-one answers to a collection team’s problems. The process of integrating a single tool can be costly (in terms of both money and resources), and suddenly needing to integrate another one because the first solution did not offer a specific SMS-based tool, can mean a team starts to look more like they’re putting together technology tech stacks than a collection strategy.

Lastly, traditional call and collect teams that do integrate new technologies may rewire them to drive inbound phone calls rather than focusing on the possible growth of primarily digital approaches. 

Digital debt collection agencies

Full-service digital debt collection agencies offer many of the same benefits provided by SaaS platforms, but they also provide the expanded assistance of an expert team and end-to-end service. Software companies provide account support and insight into product performance, but digital-first agencies not only have full teams and systems dedicated to product optimization, they also have agents that are trained to work in tandem with the digital tools.

Fully integrated teams also mean that agencies can offer simple, accelerated onboarding. In contrast, software platforms vary in how easily they can be integrated into an existing strategy, but successfully maximizing their performance still requires committed internal resources. 

Third-party team support

Digital debt collection agencies support their efforts with dedicated teams:

Product development

Product teams continually develop new strategies for improved digital performance including optimization of onboarding, enabling new digital tools, and continually improving the consumer user experience. 

Deliverability experts

Email deliverability teams optimize contact rates across digital channels. Deliverability metrics such as open rates and click rates become essential for evaluating the success of digital campaigns when compared to traditional call-to-collect solutions.

Building a scalable email infrastructure is incredibly challenging. Companies cannot simply start sending hundreds or thousands of emails overnight. Check out this article on how to build scalable email infrastructure.

Legal teams

Dedicated agencies require licensing and must adhere to the same regulations and laws that traditional debt collectors do. This means that digital-first agencies rely on in-house legal support and compliance to keep them up to date with evolving industry legislation. 

Account executives/success specialists

Account executives serve as liaisons between the creditor and the digital agency in a similar way they would for a SaaS platform. 

Cons

Digital-first debt collection agencies are not the norm. The biggest challenge to working with a digital agency is trying to understand a completely new approach to debt collection. When traditional call center metrics are no longer useful and your agency partner is ready to discuss open, click, and deliverability rates, there’s a hurdle that must be overcome to viewing collections through a new lens.

The industry is gradually realizing the effectiveness of digital debt collection agencies, but their naturalization will only come after existing agencies recognize the impact of using debt collection software and encountering the challenges that come with it first-hand. 

Whether your team integrates a powerful new software platform to support your internal collections efforts or brings on a third-party digital-first partner, digital debt collection is rapidly changing the collections landscape and redefining how collectors interact with consumers.  

Ready to learn more about what it means to partner with a digital-first agency? We’re happy to help. Schedule some time with our team to show you what more an agency can offer!