Author: Dale Eastham
Online collection software isn’t just about making the collections process more efficient and effective; it can also identify people at risk of getting into debt and help them regain control of their finances. Let’s explore how.Minimise the impact of missed payments with online collections software Click To Tweet
Could you imagine a world where delinquency was a thing of the past? Where people no longer got into difficulties? Where vulnerable people were guided away from getting into debt?
While you might think my vision is idealistic, online collection software can certainly start us on a journey towards that utopia. It can help spot problem loans early enough to do something about them.
Identifying those at risk
Imagine Jane. Her car loan payments have been a couple of days late for the last three months, and this month the payment is already a week overdue. And, rather than paying her credit card bill in full, she’s only been paying the minimum payment on it for the past few months and now, for the first time, she missed this month’s payment.
Jane is starting to get herself into arrears.
By automatically recognising that Jane needs help, and flagging her plight with her financial services provider, online collection software can ensure Jane receives the help she needs before her finances get too out of hand.
A helping hand
Now aware of Jane’s situation, the provider can leverage their debt collection solution to reach out and give her a helping hand. After all, at times like this people often become overwhelmed and don’t know where to start. An offer of help can be a real relief.
The provider could use the software to send her a report on her income and outgoings, arrange a meeting with her to plan a way to keep her finances on track, or even analyse her spending habits and make some suggestions on how she could save some money – e.g.:
“Have you looked into switching your energy provider? By combining gas and electricity payments, you could save around £8 a month.”
“You’re spending a lot on gas. Did you know you could save £27 a year for each degree you turn your heating down?”
“A smart water meter could halve your water bill.”
“Why not look at a single provider for your telephone, broadband and TV? Putting these facilities into a single package could save you around £35 a month.”
Soon, the software might even be able to analyse Jane’s finances and make suggestions itself – automatically.
Keeping finances fit
But could Jane have steered herself away from trouble before she even started to get into arrears? If her debt collection solution had incorporated a continual financial health check, Jane might have acted earlier.
Subtle messages and signs that her finances were starting to suffer might have made her think twice about her spending habit. If her mobile banking app had had a highly visible infographic comparing income with outgoings over the past month, for instance, she might have changed her spending patterns earlier to avoid missing payments.
Equally, when things are going well, a financial health check could help her prepare for those rainy days. If that infographic were to show her that her income far exceeded her outgoings, her mobile banking app might suggest she opens a savings account to put some money aside.
“Why not save a few pounds this month? A savings account would give you more interest and make sure you have some money put by just in case.”
Online collection software is critical not only for helping financial services providers minimise the impact of missed payments; it’s also critical for helping providers reduce the number of payments their customers miss – by putting customers back in control and helping them to keep their finances fit and healthy.