The Quanta marketing team sat down with our Strategic Advisors, Scott Barton and Dave Wasik, to gather insights on the major trends hitting the collections industry in 2024. Scott and Dave lead 2nd Order Solutions, a credit risk advisory firm that has a large Collections consulting practice. Here’s some of the key points from our conversation:
Delinquencies
As the new year approaches, the story of collections is this: delinquencies are rising. Delinquencies rose significantly in Q3 2023, leading many lenders to reexamine their collections operations. The question is, can collections professionals adjust their operations to be able to accommodate for this rise in delinquencies?
There are three main answers:
1. Invest heavily in digital solutions:
- Email, SMS, MMS, and Push Notifications
- Digital communications reduce operational costs and have been proven more effective than phone strategies alone
- Coordinate outbound digital communications with outbound calling strategies
- The industry is in a major transitional period, and a digital strategy is becoming table stakes for collections operations
2. Adopt long-term refinement strategies:
- Ongoing creative and contact strategy testing
- Nurturing of digital solutions long-term
- Consultation with third party providers, like Quanta, to reduce the operational costs associated with long-term testing and refinement
3. Expand into 2-way email and SMS:
- Cost-reductive
- Lower friction
- Overall improved customer experience
As organizations become more aware of operational costs, it is becoming clearer than ever that digital solutions are the way forward for the collections industry.
These days Collections leaders are expected to reduce delinquencies and credit losses while also keeping operating expenses low. Well-designed digital Collections strategies provide a “best of both worlds” solution that reduces roll rates while substituting inexpensive digital communications in for expensive outbound phone calls.
