Congratulations to Johnston Carmichael26-Nov-12
Making the business case for customer service investments13-Nov-12
Those of us engaged in business change know that making a business case for investment in customer service improvement can sometimes be tricky.
Kate Leggett of Forrester blogs some ideas here.
With the emerging greater focus on customer retention and care both in collections and wider operations such ideas, whilst not necessarily revolutionary, are however useful reminders.
Evolving communication channels02-Nov-12
Traditional contact methods (letter, telephone), are being overtaken by the evolving range of different types of communication media. The recent past launched the web and email, new technologies (Smart phones, iPads, iPhones) and social media groups (Facebook, Twitter) – all are now in the mix.
The technological revolution is modifying customer’s media preference and usage. An individual customer can have unique preferences which vary from their ‘peer’ group - customers don’t all act and respond the same. This is particularly true where customers have debt and may also have emotional factors affecting their contact preference.
According to the Call Centre Helper, some industry future predictions include: customers expect a more personalised communication service and will be increasingly ‘promiscuous’ in their channel usage; social media and Skype will be used more but email won’t last much longer; call centres will increase integration with mobile apps and speech analytics.
Businesses need to keep up to speed with these changes so that the ‘best’ method and type of contact is targeted at the individual customer level. Technological enhancements can aid in reducing contact costs by improving both the efficiency and effectiveness of the communication strategy, if deployed.
No to Yes21-Mar-12
The OFT has again shown its’ commitment to acting decisively to ‘tackle businesses that fail to treat people properly’ this week.
Regardless of whether a breach has been caused intentionally or through unclear communication, and even when businesses implement changes to their business practices as a result of investigations and discussions with the OFT, a penalty may still be invoked.
In the case of Yes Loans Limited, recent business changes have been insufficient to prevent the OFT from now revoking their Consumer Credit Licence, subject to appeal, along with two associated businesses: Blue Sky Personal Finance Limited and Money Worries Limited.
Yes are one of the UK’s largest personal loan brokers, offering clients ‘suitable loans’ on a no fee basis sourced from a panel of lenders of various loan types, the majority of which are either payday or guarantor loans.
Their website shows a representative APR of 3359%, which smacks of pre-Consumer Credit Act days.
It also indicates that clients will tend to be from the most vulnerable and financially depressed sections of the population and who are particularly on the OFT’s radar in these challenging economic times. A number of other businesses in the same arena who have, or will soon, cease credit brokerage include No Worries Loans Limited and 141 Loans Limited, with a number of others who currently advertise on TV being rather concerned.
This is good news for consumer rights and protection and also gives out a strong message to the financial markets.
While Yes’s problems were primarily related to sales practices, failing to issue refunds in a timely manner was also identified as ‘poor treatment’ of its’ customers.
That poor treatment rating provides a cautionary shot across the bows to businesses to ensure that their processes and procedures are robust and that they really ‘get it’ that treating customers fairly is a fundamental business practice which must be interpreted, translated and delivered across all businesses processes to ensure compliance - or else!
The changing face of consumer collections28-Feb-12
The Central Bank of Ireland issued their revised Code of Conduct for Mortgage Arrears for all regulated mortgage lenders in January 2011.
The new measures are designed to protect people in arrears by ensuring lenders apply a fair and more consistent approach in the collection of arrears or customers facing the possibility of arrears. It also recognises the importance of lenders working with borrowers to meet their mortgage obligations and for borrowers, who co-operate and engage with their lender, to be protected when they are trying to address their situation.
Under the CCMA, lenders must operate a Mortgage Arrears Resolution Process (MARP) when dealing with arrears and pre-arrears customers. This defines a process for handling communication with the customer, financial information and assessment, resolution options in terms of alternative repayment arrangements, appeals and repossessions.
Within arrears management, organisational compliance with the code can be achieved through manual case management, but this has a direct impact on collections efficiencies and associated costs. An automated solution can deliver significant benefits to the collections operation without compromising compliance; however, data quality plays an important factor in accomplishing that. Data quality extends across many different areas including the means to identify customers, contacting customers accurately, measuring product holdings, measuring contact history and outcomes from collections systems and interfaces. Will data integrity become a focal point for lenders looking to develop a robust cost efficient solution?
Will introducing a 3 contact rule per customer per calendar month mean that it is more important than ever for lenders to segment, score and profile customers and to maximise effective contact, whilst operating within the boundaries of the code.
The more recent revision to the Consumer Protection Code (January 2012) sees enhancements including additional protections for vulnerable consumers and stricter rules to prevent borrowers in arrears from being harassed. It introduces protections similar to those for mortgage arrears which are already covered by the Code of Conduct on Mortgage Arrears and could present collections operations with further challenges when conducting arrears management with borrowers.
Regulations designed to protect borrowers in difficulty will undoubtedly affect current practices and system capabilities in credit management. “The customer is king” was an old cliché used in customer service domains; now it seems the customer is more powerful than ever which will inevitably have ramifications on the way the industry perceives the word “collections”.
It remains to be seen if regulators in the UK will introduce similar approaches governing credit lending organisations.
To reduce the likelihood of an all encompassing change programme to meet requirements if it did happen there are many things your business can do by implementing and maintaining a robust, efficient, future proofed credit management operation.
Neil Mclean and Matt Riddall
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