Collections & Recoveries

 Arum Staying Ahead of the Game

 Arum Staying Ahead of the Game


As a thought leader in the collections industry, Arum is hungry to stay on top of innovation in Collections and Recoveries. Working with many organisations on large transformation projects exposes us to new technologies and new ways of thinking, but we know that when working on a project, the technology stack can be predetermined at the start and the scope for introducing innovation can be constrained by complex legacy environments.

For the last twelve months Arum has been running a vendor webinar series which is not constrained by legacy environments, sector or track record. Through our network we invite at least two vendors a month to present to our team of experts. The vendors value the feedback from our experts and we are able to use the knowledge gained to talk to our clients about solutions that will best fit their needs – it is a win-win situation that allows both sides to benefit by staying ahead of the game.

Over the course of the year we have heard from many companies and covered interesting topics from across the market. This is the first edition of three in a blog series that will look at some of the key trends and solutions available in the Collections and Recoveries industry. We will cover a range of topics including Collections and Recoveries Platforms, Data Solutions, Robotics, Analytics, Communications Platforms, Digital and Self-Serve, Speech Analytics, Payment Processing, Document Management and Artificial Intelligence.

In this edition, we discuss Collection and Recovery Platforms, Analytics and Communication Platforms

Collection and Recovery Platforms

Arum categorises the Collections and Recoveries platforms into Tier 1, 2 and 3 based on a range of factors including breadth of functionality, cost, track record, delivery capability, support network and roadmap. The diagram below shows how this is split on a cost v functionality scale.

Tiers

Tier 1 (Estimated £4m – £8m Implementation)

Functionality in this category is deep and broad and it is great to see that some of the power house providers are investing and continuing to develop the latest versions of their offerings. Some functionality upgrades that have stood out include:

  • New ways to link customers and get as close to the holy grail of a single customer view as possible.
  • In-built decisioning with user friendly interfaces to open up segmentation to non-analytical users.
  • Customer journey tracking for strategy, compliance and auditing.
  • Allowing third party HTML5 applications to be presented and integrated on-screen reducing the number of agent screens.
  • Integrated flexible repayment options available through various channels.

It must be noted that we have come across providers that have not moved at the same pace as others in the race for innovation despite having very stable and reliable solutions.

Tier 2 (Estimated £2m – £5m Implementation)

In this playing field these new and innovative solutions are functionally rich and can compete with the Tier 1 vendors in this area. All-in-one systems can deliver flexible workflow and analytics, omni-channel communications, I&E capture, self-service capability and placements functionality.

Many of these solutions are more recent entries onto the market and therefore can lack the proven track record, implementation experience and support network that is typical of a Tier 1 provider. The flexible, agile and scalable nature of the Tier 2 vendor systems does mean, however, that there are some great deals to be negotiated for early adopters — as long as you keep in mind that a great deal comes with associated risks and you need to take care to ensure that these are mitigated.

Tier 3 (Estimated <£2m)

As you’d expect, the low cost and modest functionality provided by a Tier 3 vendor cannot compete with the Tier 1s and 2s when it comes to high volume retail banking, utility, telco and government clients. They are, however, perfectly suited to some smaller businesses and can deliver a large benefit, particularly when introduced to more manual or start-up organisations. They can also offer an interim solution pending future business growth, so should not be ruled out where the balance between cost and functionality is a key consideration.

Collections and Recoveries Analytics

Common question – ‘Do we need a decision engine if we buy this platform?’

Our clients are aware of the importance of using internal and external data to understand the profile of a particular customer. Whether the purpose is to identify a vulnerable customer or to select customers who are best suited for a legal strategy, the interpretation of this data is key to a successful collections operation.

To answer the question, Arum first needs to understand the internal capabilities and target operating model.

If an organisation has a team of PhD data scientists on board that are currently twiddling their thumbs and they plan to keep such team to build the sophisticated models to drive Collections and Recoveries that is leading practice, then no, a decision engine is not needed.

But if an organisation wants to control segmentation and strategy through an operational team, then a tool which is easy to use and does the hard work for you may be the best option.

The desired outcome should be the same with both models, to derive insight from data allowing you to better understand your customer and increase your probability of contact, allowing you to help them to resolve their situation of debt. The models that derive this insight should be continuously improving by the addition of more recent data, keeping in mind that a customer’s profile is transient … ‘a state and not a trait’.

We have heard from boutique consultancies that offer bespoke modelling services with proven results and also seen decision engines that have impressive interfaces making it a relatively simple task to drive segmentation.

So, there are lots of options in this space, but for the best outcome it’s vital to select the best option that can be executed operationally.

Collections and Recoveries Communication Platforms

Arum has experts in Ofcom compliance, so we are yet to have a dialler or IVM provider that hasn’t been challenged with the question, ‘Are you compliant?’. While the answers can vary, in 90% of the cases the answer is, ‘The platform is entirely configurable and it is up to the client how they interpret the regulation’.

What we have seen is that the vendors in this space have had to be innovative to provide value to their client over and above spin rate and file penetration. We have seen some fantastic SMS and web self-serve options, best-time-to-call functionality and payment processing.

If you have a collections operation and you are looking to introduce new technology then please get in touch, we will be able to guide you through your options.

Arum would like to thank all of the participants that have made this webinar series so informative and successful over the last year. Some specific thanks to:

Intelligent Environments | CMC | TalkingTech | Callminer | Qualco | Rostrvm Solutions | Telrock | Revive Management | Hito | Paythru | Experian | GBG | TCN | Pega | DDI Software | HelloSoda | FICO | CGI | Opra Solutions | Appian | Nuxida

In the second blog post of this series of three about staying ahead of the game we’ll be looking at Robotics, Digital and Self-Serve and Artificial Intelligence.

We would ask that if any vendors think that their technology or solutions could help organisations drive better outcomes for customers in debt then we want to hear from you.

Matt Riddall – Lead Consultant