No one could have anticipated the year we’ve all been through. From transitioning to working from home and e-learning, to ordering groceries online and having family gatherings over Zoom, the COVID-19 pandemic has affected nearly every facet of our lives. Perhaps the most remarkable aspect of living through such unprecedented disruptions is the fact that we’ve managed to adjust to all of the upheavals. Armed with digital technology, we’ve been able to battle a global pandemic while largely carrying on with our lives. In short, we’ve adapted to living in a post-coronavirus world.
Like previous generations that have experienced societal hardship, living through 2020 has profoundly altered our lives and has cultivated certain characteristics that we will likely carry with us long after the vaccine is distributed. One of those characteristics is our collective comfort using digital platforms to interact with the world.
Even the most reluctant adopters of digital technology are now competently using video messaging platforms, mobile apps, and web services to tend to daily tasks. Our children may be the digital native generation, but COVID-19 has created an entire society of digital warriors. In this article, we’ll discuss strategies for improving your collections efforts by meeting the expectations of the new generation of tech and internet savvy consumers.
Incorporate Texting into Your Collections Communication Strategy
With the advent of the smart phone, texting has become ubiquitous. Even before COVID-19 transformed communication by limiting face-to-face interactions, we were used to texting friends and family to chat throughout the day. Americans have also become more reliant on using text messages in professional transactions and communication, as it allows us to tend to business quickly and efficiently.
For credit unions, incorporating texting into your communication strategy for members who are past due on payments is a smart way to improve your collections efforts while still providing exemplary member service to retain and grow your member base. Here are a few reasons to include texting in your collections communication strategy:
- Texting is often perceived as less demanding.
Most past-due borrowers are well aware that they are in arrears. Rather than talk to a collector, they want to determine the simplest and most direct way to repay their debt—on their schedule, often from their cell phone. Texting is often a more convenient option, and it makes you more accessible to your borrower.
- Texting enables automated two-way communication.
Because borrowers who are behind on their payments often ignore collections calls, they may be missing out on helpful information about their repayment options. Enabling automated two-way texting can address some common FAQ’s asked by members in this situation. The more automated text messages can address member questions, the less likely the member will need to contact your credit union.
- Texting saves your credit union time and money.
Texting is less expensive than traditional collection methods, such as sending a letter or making a phone call. Directing information to your members’ phone allows them to seamlessly make a payment from the same device, which helps encourage prompt payment. Texting is also faster—you can send far more texts in the time it takes to send a letter or make one phone call!
The Value of Omnichannel Communication in Collections
Developing an omnichannel experience for your members allows them to begin interacting with your credit union on one channel and continue it in another while having a seamless experience across the board. As technology creates more contact options between you and your members, it’s important to keep pace with their communication preferences. Phone calls, emails, interactive voice response (IVR), and text messages are all expected options for the digital warrior generation.
Offering an omnichannel experience is a big value-add for credit union members. However, it’s not just the members who benefit from this approach. An omnichannel communication strategy will help your credit union improve performance, make more meaningful connections with your members, and empower them to make better-informed decisions that help you drive growth and improve service.
Consider Outsourcing Your Collections Efforts
Collecting on past-due accounts is a massive task that requires a substantial investment in personnel, technology, and compliance expertise. Outsourcing your collections efforts can help your credit union effectively manage delinquency and reduce the cost of your collections program.
To learn how SWBC can help you decrease delinquency while improving your members’ experience, click here.