Reflecting on 20 years in the collections industry and embracing a new chapter

For almost 20 years, I’ve worked in every aspect of collections and thought I’d seen it all. In my first year of University I started on the phones as a part-time collector, managing 1st and 2nd payment default on auto loans in the US. I fell in love with the speed of Operations and how quickly things happened. If you’ve ever worked on the phones, you’ll know there’s nothing quite like the energy of a buzzing call centre!

Smile and Dial

Fast forward a few years, and I was building some of the top performing call centres in the US for Fortune 500 companies pre the GFC. For anyone who remembers these days, our approach was largely: dial, dial and dial some more. In practice, applying this meant working with analysts who segmented customers based on risk scoring. The result? Linear strategies, such as calls on day 3 then another on day 5 for entire customer segments. This level of detail was advanced for the time, as it opened the door to adjusting the intensity of communication based on particular variables - yet it meant that millions were receiving carbon copies of the same customer journey.

While we were willing to explore new strategies, when it came to digital channels we feared the unknown. We were comfortable with our dialling routine, and with the GFC came increased regulatory pressure and scrutiny. I simply couldn’t see how digital would outperform my best agents. To add to the apprehension, layers of compliance and regulation requirements meant that most collectors simply couldn’t understand how to use email or SMS in a way that was both compliant and cost effective. Inevitably this brought us back to our comfort zone, voice collections. By the time I left the US in 2016, I still hadn’t stepped into the realm of using digital, let alone intelligent collections.

Stepping into the unknown

Like most major moves, a new role brought my family and I to Australia. A new country, a new company and an entirely new attitude to recoveries. At Westpac, one of the largest banks in Australia, I was challenged to think differently, to embrace new channels and learn how they could be used to improve collections. This was unfamiliar but necessary territory to enter, as while consumer expectations had moved on, collections hadn’t. We had to do better, and digital channels proved to be the stepping stone.

It wasn’t easy, but it worked. Higher engagement rates and increased conversions, all from making the effort to meet people where they needed us. What really hit me was how out of touch collections practices were with the average customer. Granted the strategy was still linear, but at least it expanded to include additional channels. When consumers could apply for, be approved and manage their credit online without talking to anyone, why did that experience have to end when they miss a payment?

This is when I became fascinated with InDebted. Machine learning? Product-led? Self-serve? Concepts that were so far away from what I had experienced in my 20 years in the industry. Sceptical? Yes. Intrigued? Even more. In 2019 when I moved to Latitude Financial Services, we brought InDebted on as our recoveries partner and I experienced intelligent collections first-hand. From the get-go they were different. There was no cookie cutter strategy, no risk scoring, no outbound calls. Instead they were obsessed with data, but not just the numbers. Their product used machine learning models to determine how data points were connected and how a customer wants to engage with their debt, on an individual level. My curiosity skyrocketed.

Accelerating beyond digital

Having led financial operations teams during the GFC and COVID-19, I’ve learnt that innovation can be born out of crisis. In 2008, I worked for a mortgage backed securities provider in the United States, leading campaigns and working with the regulators to design programs to keep customers in their homes - a time I’ll never forget. We had to think creatively, pitch in together, and keep customers front and centre of everything we delivered. That same thinking got my team through the pandemic years later, and kept our feet on the ground with both our customers and teams supported. What’s different about InDebted is they didn’t need a crisis in order to innovate or focus on improving customer outcomes. It’s part of their DNA.

InDebted’s philosophy to the practice of collecting debt is revolutionising the sector. We have the biggest collections data warehouse in the world, and our machine learning models use it to determine the best channel, communication type and time to engage with every single customer. Perhaps what’s more impressive is how the models learn based on how each customer responds, and adjusts its decision-making to constantly improve their experience. In an industry that’s taken decades to integrate emails while the rest of the world is exploring AI, that’s pretty special.

The last two years have been especially transformative for collections as a whole. With the implementation of Reg F, we’ve seen US agencies move away from calling at inconvenient times, multiple times a week, and instead build digital strategies and integrate new communication methods. We’re seeing the industry move closer towards considering customer preferences, but it’s still far from true personalisation. Whether it’s fear of the unknown or a desire to play it safe, we still see traditional agencies send the same communications to huge customer lists based on their probability to default and their risk grade, instead of based on who they are as an individual and how they want to engage with their debt.

In a real full circle moment, I joined the InDebted team as their VP of Client Success in February 2023. Being a part of this company, I’ve seen firsthand what it takes to progress an antiquated industry and erase the stigma of debt. Every single team member is committed to providing a better way for customers to get back on track with the most frictionless experience possible. Our customer service team is the highest rated in the world with over 2,000 5-star Google reviews, and we’re the only global collections agency that operates across five geographies. In just seven years, InDebted has achieved more than what many industry incumbents are yet to achieve with decades behind them, and we aren’t slowing down! So the future of debt collection? It’s emotionally intelligent, digitally intelligent and above all, embraces innovation.

By Tracy Glen - Chief Client Officer