Banks that apply a digital layer across their debt treatment strategies will be able to deal with more customers, quickly and effectively.
4. Data: the power of knowing your customer
Banks that make better use of data to understand each customer’s situation can apply this knowledge to a set of pre-approved, personalized debt solutions. The closer banks get to Q1 2021, the more certainty they will need about which customers are going to default or who will need their loans modified. To prepare for this as best they can, banks will need to expand their data sources – from legal and employment sources to credit and financial records – along with predictive and behavioral analytics, to better ascertain the customer situation.
Banks already have a substantial amount of customer data at their disposal, but they must begin to use and apply it in a more effective way. This will benefit an inbound collections model by not only building a more satisfactory, personalized customer experience but also boosting the likelihood of recovery returns. Banks have the ability to really drive their level of data intelligence now, to personalize the solutions they are offering in the months and years to come.
5. The next-generation customer engagement model
An inbound model has the potential to create a powerful effect on the banking sector’s next-generation customer engagement model. Investing in a proactive approach that treats customers uniquely and fairly holds promise for greater customer retention and increased customer satisfaction.
The closer banks get to a period in which defaults are likely, the more they will know about which customers are going to need additional support. An inbound model emphasizes the need for each institution to demonstrate a higher level of understanding of their customers’ needs and particular situation.
In practice, this means approaching customers in a compassionate, personalized way, seeking to understand their personal circumstances and how financial lenders can help. Banks must apply predictive analytics to assess likely customer behavior and profile their customer base accordingly. As a result, this will grant banks greater insight into real-time customer behavior in the marketplace – which will give them the confidence to pre-approve treatment strategies where appropriate.
Banks have a duty of care to help their customers – and an inbound collections model will help them manage customers in a more compassionate way. If banks fail to prepare now for the wave of defaults that are likely to hit in the months ahead, they risk regulatory penalties, a significant increase in costs, and reputational risk.
Santrauka
To transform the collections model from an outbound to an inbound approach, banks must dedicate greater time and investment on improving their technological capabilities to incentivize customers to reach out to them proactively.