Collections Receivables

How Can Organizations Manage their Collections Efficiently

Companies in India face a number of organizational challenges that get in the way of effectively managing their collections receivables.

Because many of these processes are still being developed and fine-tuned, there are many challenges to work through, which include a lack of efficient infrastructure, limited capital, and outdated technology. Not surprisingly, these challenges also get in the way of overall operations and result in a disturbed cash flow.

Small and Medium Enterprises (SMEs) are also impacted by these challenges; the ambient environment for SMEs can also be prohibitive to their growth, especially because loans and approvals are not easy to come by.

When SMEs turn to private lenders, they’re often faced with high interest rates, making the payback process critical and cumbersome in the face of outstanding receivables.

It’s easy for this to become a vicious cycle for organizations of all sizes.

Common Collections Mistakes made by SMEs

Let’s say we have a database of 100 clients with payments due. Of these 100 clients, 70 always make payments on time. 20 of these clients might be habitually late with payments and 10 of these have gone into deep lapse, i.e. a customer base that has become completely unresponsive with significant payment delays (90 days or more).

“A very important concept to understand is that all customers are not cut from the same cloth” says Aditya Bhushan, Managing Director at ATS. “If the loyalists are approached with the same tactics as the stragglers, you risk delaying your payments even further. In 17 years, we’ve seen this occur many times.”

A delayed payment loop is definitely not the outcome we need. But there is a way to manage the collections process more efficiently, and it’s rooted in understanding your customer’s payment behaviour patterns, dispute resolution procedures, efficient follow-up and escalation, proper monitoring.

Can a Collections Receivable Backlog be Prevented?

With a combination of intelligent segmentation, analytics, and timely outreach, collections receivables backlogs can be prevented.

  1. Segment Your Data
    Segmenting and correctly labeling your data is a crucial first step. If 70% of your customers pay on time with minimal reminders – even better if they’re on autopay! – then we recommend you don’t disturb them with repetitive or unnecessary messaging.
     
  2. Identify Risk

    Strong analytics and experience are important for identifying risk. Once you have a window into an established payment or behaviour pattern – e.g. some people avoid calls from collectors – you can determine the risk of non-payment.

    This is the point where we typically step in for our clients and recommend next steps. When we identify the segment perpetually in deep lapse, our experts look into each case selectively and approach towards a negotiated settlement.

  3. Prioritize Human Intervention

    A phone call or an automated message? An email or a text? One message or a series of reminders until the payment comes in? Once you’ve segmented your target audience and identified the risk, you can prioritize how much human intervention a particular customer will need.

    In the example we’ve mentioned above, 80% of the clients make timely or slightly overdue payments. In our experience, these clients do not require special intervention for payment reminders. Moreover, the time and effort saved here can be invested into tougher accounts in order to improve the overall collections efficacy.

  4. Implement Digital Outreach

    Once you’ve decided your mode of communication (text, email, phone call), you must automate and digitize your outreach process. We’ve built processes and software for our clients that allow CRMs to integrate with emails and diallers to initiate payback. Most often, a full human resource is not required for this outreach.  

A digitized and analytics-based follow-up isn’t just the way forward; it’s the most efficient and economical way forward. Talk to us about how we can set up this process for you.

Debt Collection India

From Muscle Men to Massive Tech – How Indian Debt Collection Is Evolving

The Millennial Generation in India is growing up in a debt-laden environment. It’s a generation that has access to credit cards, car loans, home loans, and even student and travel loans. Consequently, it’s also a generation that is rapidly growing familiar with debt collection calls from agencies because of late payments or defaulted debt.

What’s changed along with the growing debt landscape are debt collection methods. There was a time when debt collectors would show up at the door demanding repayment. Later, these debt collectors turned into incessant and repetitive callers who caused debtors significant amounts of anxiety.

Now, ATS Services is part of the change that’s making the debt collection scenario a lot less intimidating to engage with, especially in the Indian market.  

“We use technology and data as primary drivers to deliver a superlative customer experience” says Aditya Bhushan, Managing Director at ATS. “The technology meets customers where they are and gives them a message that resonates with them. This change is necessary because the old ways just weren’t working.”

How Technology Changed Debt Collection – What’s Different?

One of the primary factors driving the change – especially within ATS – is that we’re moving away from Human-to-Human (H2H) interactions. “More and more, we’re engaging the Human-to-Machine model with web interfaces that make the customer engagement process a lot smoother” .

Additionally, data gathered from debt collection efforts is also supported by human insights, making for a less abrasive process, especially for the end customer.

Here’s how debt collection’s muscle men have metamorphosed into massive, more intelligent technology.

  1. Debt collection is a lot more intelligent

    Big data analytics are here to stay. Some of us who play with big data every day would probably even call big data analytics a lot of fun. Driven by data and analytics, the debt collection landscape is more intelligent now.

    For instance, Indian debt collection agencies ramp up their debt collection calls for the US market in tandem with tax rebate season. “The ability to pay back a long-standing debt looks a lot more feasible after receiving a $1500 cheque from the government” says Aditya.

    Debt Collection in India

    It’s what we’re doing at ATS as well. Because we closely monitor customer data, we’re able to have a more granular customer segmentation, apply sophisticated tracking measures like sentiment analysis, and deliver customized messaging to the audience base that is timely and relevant.

    We’ve got a great track record on improving collection metrics because we’re driven by data. We’d love to have a conversation with you about it.

  2. Better listening and speaking skills

    Remember the archaic intimidation tactics we mentioned in the beginning of our blog post?

    When companies realized intimidation tactics weren’t working in increasing repayments, they brought in soft skill trainers to train their staff to have better conversations.

    Now, debt collection has gone the extra mile and trained their staff to exercise empathy.

    “A debt collection call can cause a lot of anxiety for people” says Aditya. “We’ve trained our staff to listen to the people they call and acknowledge the stress they might be in. We’re working with the assumption that no one wants debt piling up, so the inability to pay could be linked with life circumstances.”

  3.  Emotion and speech analysis

    The other side of the coin, vis-a-vis empathy, is speech analysis using advanced technology, which is given serious consideration by organizations wanting to ensure a smooth customer experience.

    “Massive tech is about harvesting and employing data for the customer’s advantage” continues Aditya. “You could have a COPC-certified call center; you could have a sophisticated and expensive dialler being used at your call center. But the people who call may not be very different from the earlier debt-collecting muscle who cause a lot of anxiety.”

    Massive tech steps in where muscle men don’t. The job of the technology is to make repayments a positive – even pleasant – experience. With sentiment and emotional analysis, we’re able to determine the real-time state of the customer and deliver the right message accordingly.

    Sentiment and emotion analysis is also a dimension that we can leverage at ATS for our clients’ needs.

  4. Outsourcing collections efforts

    Because of the high number of defaulted loans in the Indian economy and an infrastructure that is still building itself and the required resources, banks and credit agencies find it far easier to outsource their debt collection efforts to agencies.

    Agencies like ATS offer non-invasive and non-threatening communication and outreach to the customer base. We take it a step further by engaging with the customer on preferred mediums of communication at times that work best for them.

In an economy driven by data, digital connections, and multiple electronic devices, it makes no sense to still follow archaic methods of debt collection or customer engagement. We speak from the vantage point of 17 years of experience and a well-proven track record.

Talk to ATS Services about how we can help streamline your debt collection efforts.

Digital Payments

Digital Payments in Tier 1 & Tier 2 Cities: The New Way to Pay

The suburban and rural landscape in India is rapidly adopting digital payment mechanisms.

The wave started with the increasing penetration of micro-finance companies, large scale Aadhar enrolment, Jan Dhan accounts and direct credit of subsidies into bank accounts by the government.  

Additionally, a second wind of increasing adoption on online payments across the Indian landscape is being driven by some key factors such as:

  • E-commerce platforms in India now get a significant number of sellers from Tier 2 & 3 cities doing high volume transactions.
  • The demonitization move forced some level of unwilling adoption – though the cash economy is back with a bang, this move did expose people to transacting without cash for some time
  • Increasing penetration of smartphones with access to payment gateways
  • Significant reduction in cost of data on mobile devices

Digital Payments 2

Since this environment creates compelling factors that deserve attention, the implications for traditional companies in the BFSI space are too important to ignore.

Implications of Digital Access on the Payment Landscape

So how does all of this affect the payments and collections landscape?

Whether approached through the e-commerce lens or in terms of collections, the impracticability of ignoring Tier 2 & Tier 3 cities is well-established. For the payment collections landscape, the advantages of focusing on this segment works in favour of companies and their customers, equally.

Firstly, principals who are after timely payments can now get them with reduced efforts. Since digital payments are tagged directly to accounts, they also do away with reconciliation efforts.

For customers, the advantages lie in reduced culpability because of unnecessary delays arising from human errors like misspelled or inadequately verified cheques and signatures.

Additionally, secure payment gateways also go a long way in building trust and reducing anxiety levels.

New Payment Methods

ATS Services works with companies in the financial services the insurance and well as retail finance portfolios where significant contributions are from populations in smaller cities and towns. Online payments currently contribute to 3-4% of total payments collected.

These are however are growing and the movement in this space even from a year ago is significant.

Clearly, the question at this point is not whether these developments will impact the payments and collections landscape. The question is how that impact will be affected and steps companies in the BFSI space take in order to prepare themselves for it.

Digital affinity and access is on the steady rise within Tier 2 & Tier 3 Indian cities with a whole new generation of users ready to jump into fray. Companies need to enable effortless payments for consumers in smaller cities and towns.

Unless a comprehensive strategy on going digital in customer engagements with an emphasis on payment collections is done companies may find themselves left behind with a unsatisfied customer base and low customer retention.

This is an area we’ve built considerable expertise for over the past few years. Contact us if you’d like to learn more about how we can help your organisation get started.

Customer Service

4 Ways to Get Customers to Pay Policy Premiums on Time

Insurance companies often struggle with unresponsive or reluctant customers when the time for policy premiums rolls around. Making a timely payment – or even a payment at all – can be seen as an unpleasant experience.

But often, the unpleasantness does not arise from the actual requirement of making a payment.

Often times, the reluctance to pay is rooted in a negative experience that a customer has had with the company. In our interactions, we’ve found that some customers who are unwilling to pay could have felt ignored by the company.

Additionally, they could also have had trouble reaching a company representative in a timely manner or they couldn’t navigate their way through an online payment gateway.

Regardless, an unaddressed negative experience doesn’t bode well when it’s time to renew a policy, which then results in delayed or defaulting payments.

We know that each payment is a solidifying step for a long-lasting relationship with a customer. To that end, the relationship must be nurtured long before the first signs of trouble show up, making the final goal, i.e. on-time (and preferably online) policy renewal payment, a positive experience.

Here are 4 simple, easy, and actionable steps organizations can take to get customers to pay on time.

Maximize Timely Payments

  • Have a Flawless On-Boarding Process

    Your client servicing efforts will begin as soon as you’ve acquired your customer. At this stage, having a flawless on-boarding process is crucial because it will go a long way in building trust and reducing anxiety for your customers. 

    Taking care of granular details is extremely important at this stage.

    For instance, your application forms and KYCs should be thoroughly checked and verified with the client. Train your representatives to answer questions and clear concerns as they arise.

    A digital process to welcome customers can also go a long way to address any remaining gaps in the acquisition process. Many companies – especially in the finance vertical – are known to set up a welcome series of emails to address universal concerns right away.

  • Build a Strong Customer Experience

    To build a strong customer experience, build frequent engagement within your nurturing processes. While your process will be fine-tuned after implementation and data analysis, the frequent check-ins will allow you to gauge the frame of mind they’re in.

    This is where you can do early interventions with issues, and not just with the intention of renewing a premium at the end of the year.

    You’ll build a strong experience when you:-

    A) Address negative issues as early as possible,
    B) When your customers genuinely feel taken care of, and
    C) Engage with customers on a consistent basis and not just for specific situations – such as renewals.

  • Make Payments Easy

    Too many of us have been on the receiving end of a long and complicated payment process, so there’s no denying how tiresome they feel.

    A little usability testing goes a long way in paving a smooth road for your customers vis-a-vis payments, e.g. building in features like two-step payments and auto-fill forms for smoother payments.

  • Fit the Medium of Engagement to the Customer

    Some people just don’t check their emails. Others don’t answer phone calls from unknown numbers. Still others prefer hearing a human voice and knowing they can reach an actual person if they have an issue.

    Whatever your medium of engagement is, it must fit your customer’s needs and preferences. ATS Services works with companies to create digital engagement opportunities; these further lead to the creation of a knowledge bank about customer behaviors and preferences.

    This knowledge bank can be harnessed to create positive customer experiences that go a long way in building strong relationships.

We applaud organizations that have these checks and balances in place before a policy renewal. However, sometimes customers face issues at the time of renewal because they’ve been misguided or because of gaps in the process.

These are important reminders to keep the full customer engagement process clean, simple, and, easily accessible.

Every portfolio is bound to have a certain number of people who simply do not want to engage any longer. But for most others, feeling acknowledged by having their questions and concerns addressed is the first step towards a long-term relationship.