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.
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!