Where next for collections management in a digital-first world?

The use of data and analytics, such as AI and Open Banking, in the end-to-end collections journey was the focus of a recent virtual roundtable hosted by Open Banking Expo, in partnership with CRIF.

Participants representing UK and European banks and lenders, including HSBC, Revolut, Secure Trust Bank, Allica Bank, BBVA and Shawbrook Bank, took part in the roundtable on 7 December, titled ‘Effective collections management in a digital-first world’.

Opening the roundtable, Daniel Skiba, senior manager at CRIF, pointed to the cost-of-living crisis, which is putting mounting pressure on organisations’ collections processes.

According to the CRIF Banking on Banks 2023 report, 20% of consumers believe the cost-of-living crisis is resulting in late payments and 30% of those aged 18 to 34-years-old will rely on credit and borrow more money to get by.

Participants discussed the use of customers’ transaction data in early warning systems and the increasing use of self-service platforms or channels by banks and lenders.

The discussion moved onto the use of AI and large language models specifically, in the creation of targeted and more informed communications.

Those taking part in the roundtable revealed their respective approaches to placing the financial wellbeing of customers at the centre of the collections process to deliver good customer outcomes.

Participants also identified the biggest pain points they face as part of the collections journey, including encouraging individuals with complex needs to self-serve and automating collections in the SME market, which has historically required more manual touchpoints and a bespoke approach.

Finally, representatives from banks and lenders offered their predictions about the prospects for the collections industry in the next five to 10 years, including the lasting changes brought about by Covid-19 and how to go about engaging the next generation in the collections process.