COVID-19 caused significant economic disruption, resulting in financial struggles for most people globally. Average wages, according to the International Labor Organization, significantly decreased when the pandemic hit – falling wages were seen in European countries, Japan, and South Africa. A survey by Pew Research Center showed that most households in the United States that went through job or wage loss see long-term financial impact, making it harder for them to achieve financial goals.
As the changing consumer behavior and the economic impact (e.g., business shutdowns, layoffs, salary cuts, and reduced consumer spending due to dwindling resources) continue to be felt, the scale of unemployment will prove to be the biggest driver of customers’ ability to pay.
Current state of debt collection
It can be said that governments are doing their roles to combat the pandemic’s effect on the economy. Yet, businesses are still struggling to preserve liquidity and endure substantial financial losses. To secure business interests and to funnel much-needed cash flow, intelligent debt collection should be a business priority.
There will always be challenges that need addressing and action. Lenders are still operating at a limited capacity as a result of being short-staffed. Then, the contact centers providing customer service are having difficulties in supplying their employees with the right technology and hardware to do their respective jobs. Furthermore, some lenders still aren’t relying on digital channels and don’t possess the right infrastructure to function remotely.
When credit facilities and customer service channels are limited, contact rates continue to decline, while account handling requirements in debt management remain operationally challenged. There are high abandonment rates, inadequate outbound coverage given the limited staff resources, and low penetration given that the strategy is primary driven by outbound calls alone. When customers are not serviced in a timely and appropriate manner, the revenue line is negatively impacted. As customers attrite, accounts hit charge-off and negatively impact revenues and profit and loss.
Addressing the ongoing challenges
Regulatory rules, changing consumer needs and behavior, the rampant rise in collections activity, and the almost-mandatory shift to digital communications are making it difficult for businesses to enforce claims. As debt increases, Teleperformance remains committed to helping clients refine and improve their collections strategy by leveraging the right technologies.
Increase collection rates and optimize resources through TP Recommender. Blending the best of technology using data analytics and predictive modeling with the power of the human touch, Teleperformance can help companies optimize operations by:
- Increasing first contact resolution (FCR)
- Improving process and cost efficiencies
- Reaching customers anytime, anywhere, on their preferred channels
- Understanding customer needs
- Empowering skilled collections associates
We continuously help major providers all over the world in managing risks, reducing expenses, and enhancing collection processes in a changing digital landscape. Through the use of TP Recommender, our clients achieved immediate results.
Learn more about TP Recommender by reading our infographic!