What is digital debt collection and why it works

To generate meaningful contact with today’s consumers, traditional-one-size-fits-all methods like making multiple calls to customers are no longer as effective.

Customer expectations have undergone dramatic shifts over the past decade, especially around how they prefer to communicate. And when it comes to debt collection, the same applies – customers expect a more human experience. 

Enter, digital debt collection. This includes channels such as email, SMS, and webchat - ultimately, using more convenient, modern methods of engaging customers with their overdue accounts.

Let’s unpack digital debt collection at its core. We’ll go into how it works, the benefits of a digital-first approach, and why it’s a vital step forward for the collections industry to keep up with customer expectations.

Digital debt collection defined

In its most basic form, digital debt collection involves using digital channels such as email and SMS to communicate with customers, often directing them to an online portal to make a payment.

But let’s dig deeper into how the skilled application of digital collections can really move the needle.

Integrating multiple digital channels such as webchat, email and SMS into your collections strategy to create an omnichannel experience.

> This should provide a connected experience where customers can seamlessly pick up on their last conversation, regardless of which channel they use to get in touch

Self-serve online portals provide an autonomous experience, enabling customers to login securely and manage their account without intervention.

> This should include the ability to set up and change payment plans, access any discount settlement offers, or pay in full - with a variety of payment options from direct debit to Apple Pay

With digital channels also comes deeper layers of insights and data into how customers engage with their accounts.

> This should be monitored by channel, with close attention to key metrics such as open rates, payment conversions, and self-serve portal logins

A personalised, customer-centric approach

By meeting modern consumer preferences, organisations using digital channels can reach all new peaks of customer engagement.

• Empowerment: Customers can manage their debt through the channel and time that suits them best. It puts the power back on their hands, rather than forcing them on to an often uncomfortable phone call. 4 in 5 customers who resolve their debt with InDebted manage their account entirely independently using our customer portal, without reaching out to our Customer Service team.
• Convenience: Meeting customers where they are means providing them with easy access to the information they need, when they need it. This means a friendly Customer Experience team that’s available across all digital channels - webchat, email, SMS and of course, voice. On average, for every 24 customers who engage with our Customer Experience team digitally (through webchat, email or SMS), one picks up the phone.
• Flexible payment options: An online portal enables customers to make a payment in full if it’s affordable, or set up a fully customisable payment plan with a start date, frequency and instalment amount of their preference. 
• Flexible payment methods: Sophisticated collections providers offer a wide variety of payment methods, even Google or Apple Pay. This mirrors a modern payment experience and gives customers the ultimate ease. Customers referred to InDebted choosing Apple Pay have the highest conversion rate of 93% compared to all other payment types. 
• Experience: A seamless digital journey that matches all the above, alongside a compassionate and specialist Customer Experience team creates the ultimate collections experience.

How positive experiences are a win-win

A recent study on the rise of digital channels in debt collection showed that across all risk categories and balances, email was the preferred engagement channel by consumers. SMS came in second, with phone calls and letters trailing behind. Meanwhile in 2022, Transunion found that over 90% of collections agencies still use manual dialling (telephone) and letters as their primary communication methods.

With increased ease and faster availability of agents, digital is also more accessible to provide real time support to customers. This is increasingly important as macro-economic impacts continue to drive more and more customers into collections. When 44% of consumers say that convenience is their reason for switching brands, if your collections provider can’t provide a quick response and resolution, your customer retention and lifetime value may suffer. 

Placing customers front of mind is central to digital debt collection agencies, and the way we incentivise our team at InDebted is core to this. While most traditional debt collection agencies motivate and compensate their agents based on how much debt they recover, our Customer Experience team is rewarded on the number of 5 Star Google Reviews left by customers they supported.

What’s next after digital? 

Now in 2024, you might be thinking: surely the collections industry can be more advanced than being able to respond to a customer via email? And yes, it absolutely can. That’s where we come in.

We’re all about intelligent debt collection. This means using machine learning and AI to create a personalised collections experience for every customer, based on their preferences, engagement and behaviour. 

Synonymous with our product Collect, collections intelligence is a step beyond digital, backed by:

• AI and machine learning: The industry’s most effective, compliant and skilled application of machine learning and AI. Our internally-built machine learning & AI technology is backed by elite software development standards and our proprietary insights database of over 600 million events. 
• Infinite scalability: We have unmatched capacity to support customers across multiple global markets including the United States, Canada, Australia, New Zealand, and the United Kingdom. We offer API integrations, and real time scalability to support infinite volumes of customer referrals.
• 5-star customer experience: Omnichannel communication across voice and digital, our self-serve customer portal, and flexible and intuitive payment options provide a frictionless customer experience. Over 2,300 customers rate their experience as 5-stars on Google, making InDebted the world’s highest rated debt collector.
• Compliance at the core: Collections and consumer protection laws are built into our product’s code, ensuring total compliance across all our key markets. Our data security and infrastructure is also certified to the highest global standards, enabling trusted and reliable collections. 

If organisations want to retain their customers as well as their brand image, then engaging a digital-first debt collection agency is the only – and wisest – option. 

With our predictive machine learning and AI, intelligent debt collection takes this a step further to outperform traditional collections by up to 40%. This creates the industry’s best customer experience enabling businesses to retain loyal, happy customers and increase their lifetime value. Our intelligent debt collection is scalable in real time, and compliant across multiple global markets with multilingual capabilities.