For over 25 years, we’ve been transforming collections and recoveries across the world and helping to deliver better customer and client outcomes. We’ve worked with organisations of all sizes, from huge multinationals and large domestics with mature collections operations, to growing companies often with nascent ones.
I love supporting organisations with their growth, and this article is the first in a series where we will delve into how you can effectively scale your collections and recoveries as you expand.
What issues are growing organisations facing in collections?
Your focus has probably been on customer acquisition and growth to this point. However, as your portfolio matures, there is a natural need to focus on collections as the credit lifecycle plays out.
Doing so is necessary as customer bases, regulatory obligations, and operational complexities all increase, especially with the backdrop of more customers falling into default as cost-of-living and COVID buffers are depleted. From our work with clients in this position, we’re also seeing collections increasingly becoming a lever to improve the bottom line, ensure long-term sustainability and deliver better outcomes.
One of the challenges you may be facing is how to handle these changes effectively without an expert team or the bandwidth.
What should you focus on?
In my experience, the best approach involves a combination of strategic planning alongside investment in people, processes, and technology.
Here’s an overview of the key areas to look at (we will dive into each of these in more detail over the coming weeks):
1. Review your collections operation as a whole
Take a look at all areas of your operation (strategy, technology, operational effectiveness, governance and staff) to see where you can be more efficient or make improvements in line with industry best practice. How will your operation change as your organisation grows and what do you need to put in place to maintain KPIs, service levels and take advantage of economies of scale?
2. Invest in collections technology
Whether you’re looking to build your own system or buy an existing one, it’s important that you understand market best practice, how emerging capability can add value and have the right roadmap in place to take advantage of functionality and leverage the technology to set you up for future success.
3. Ensure ethical customer treatment
It’s essential that you build tailored collections and contact strategies to help your customers resolve problem debt or provide vulnerable customers or those in financial difficulty with the relevant support. This involves looking closely at segmentation, potential product crossover, contact channels, and much more. This will not only help to build good customer relationships, enhance your customer experience and achieve better outcomes, but it’s also compulsory from a regulatory point of view (including Consumer Duty, Breathing Space, and CONC).
4. Optimise use of data and analytics
One of the best ways to improve your collections performance and bottom line is to ensure that you’re leveraging both internal and external data sources and using advanced data analytics to better segment your customers and select the right treatment paths.
5. Consider flexible resourcing
There are many reasons why even large organisations bring in external partners for help with specialist areas of collections, but it’s especially key for teams where you don’t have the resource in-house and it doesn’t make sense to hire for short-term needs. You may consider utilising flexible resourcing for things like reviewing your target operating model, debt sale, making technology improvements, or regulatory reviews, for example.
Taking these steps will ensure that your organisation is better equipped to handle growth, improve customer outcomes, and reduce operational risks.
Not sure where to start?
Arum has a global team of specialists in collections and recoveries that can assist you with your growth journey in any of these areas.
If you’re not sure where to start, we’d love to offer you a free one-day review workshop that looks at your entire collections operation, followed by a report of our findings and recommendations. This will help you to identify and prioritise areas to focus on as you scale.
Register for your free workshop and report
About the author
Forid Meah
Head of Advisory Services
Arum
Forid joined Arum in 2019 as a senior consultant and is now our Head of Advisory Services. He has over 25 years’ experience delivering transformational change and performance improvement in both small and complex organisations, across multiple industries and geographies. Forid draws upon the full range of Arum’s skills and capabilities to support organisations in improving every aspect of their collections and recoveries.