Numerous radical changes have occurred since the economy was stricken by the 2008 financial crisis. Regulations have significantly altered compliance with UK consumers that have, on average, seen a decline in their disposable incomes. Such changes have created a challenge for DCAs and creditors assigned the task of retrieving debts in arrears and the need to make innovative adjustments in order to boost faltering attempts based on past methods.
When the mortgage bubble burst in 2008, unsecured portfolio holders saw their settlement rates plunge across the board, save for a few examples. One example was Wescot, which made rapid adjustments to their contact and compliance procedures. The company’s fast thinking and innovative problem-solving efforts have paid off by showing marked improvements in recovery activity, running from benchmark figures in 2006 to performance figures gleaned at the end of 2013.
So, what are the driving factors that are leading to extremely high collection rates even though the economy continues to struggle? Of course, banks have been forced to radically improve their lending procedures which have played a key role. However, debt collection improvements are also a large part of the successful formula.
Performance Rises as 3-Month Break-ins Decline
Figures have revealed a steady trend in the debt collections environment in the past several years, despite other economic fluctuations. Within a 12 month period concluding at the end of 2013, Wescot found that a decline occurred in their break-in collections delivery with a slight recovery experienced in the final 6-month period.
However, while 3-month break-ins were in decline, figures also showed that collection performance improvements after stock payouts increased by nearly 20%. The entire scenario averaged out to more than a 15% increase in overall collections performance for the year.
The reasons for the decline in debt collection break-ins lie in short-term adjustments that eventually lead to long-term stability.
Contact Rates – The number of contacts made directly relate to collection delivery success. With constant changes and errors being made, data has to be constantly cleansed in order to make more contacts, properly tailor communications towards the customer and deliver those messages through the best means of communication.
Contact Conversion – In order to boost repayment conversion rates, steps need to be taken to tailor plans according to their circumstances. As this effort is made and accommodating options are supplied, customers tend to fulfil their agreements. However, more man-hours are required to speak with customers longer. Again, the initial investment is costly, but it produces long-term benefits for all involved.
Wescot has heavily invested in the fields of technology and data analysis resulting in debt delivery success. The company’s innovative approach to debt collection has made it an industry leader that big financial names recognise. See Experian signs deal with Wescot for a good example.