The importance of collections has been saved
The importance of collections
Is your collections function fit for tomorrow?
With the recent spate of economic, regulatory and health crises and the increasing pressure to manage credit risk, the need to elevate and invest in collections has never been so important.
For decades, the collections and recoveries function has delivered exactly its expected outcome: collect and recover bad debts and protect shareholders from financial loss.
Following the rise in customer and regulatory expectations for financial institutions due to recent events, a shift in the mission of collections has already begun.
While the vocabulary around this critical and strategic banking capability has changed – from ‘collections’ to ‘assistance’, ‘recoveries’ to ‘solutions’, and ‘hardship’ to ‘supporting many forms of vulnerability’ — it is simply not enough.
The people, processes, policies and technologies within the collections and recoveries function all need to evolve and scale to be fit for the future.
With credit risk increasing across the industry, bad debt will still require management, and this will need to be balanced alongside opportunities for improved efficiency and consistently rebuilding trust by offering a range of support to customers where it is needed.
Financial institutions that respond to today’s challenges flexibly, and that serve their customers with imagination and distinction, will be the financial institutions that customers remember when they next require financial assistance.
Are you ready to be that financial institution? Get in touch to understand how Deloitte can help your organisation embrace this change for your collections function.
Explore our collections article series below to help you prepare for the future:
Collections is dead, long live collections
Recent events have highlighted the importance of collections and the need to elevate and invest in this critical capability. The mission, people, processes, and technology within the collection function all need to evolve and scale to be fit for the future.
Is there too much empathy in collections?
Collections is responsible for assisting customers who are experiencing difficult circumstances or vulnerability and showing empathy towards their customers experiencing troubling times. However, is it possible that too much empathy is preventing fair and consistent customer outcomes?
Coaching your staff for challenging conversations
As vulnerability will continue to be a focus of the collections department post COVID-19 recovery, agents must be coached to ensure they can operate sustainably in the long term while maintaining fair customer outcomes.
Published: August 2021