Bye-bye SMS Text messaging, hello RCS messaging - Changing debt recovery for Local Authorities

Sending SMS text messages became a common way to communicate from 1998 when the capability became popular on low-cost mobile handsets. It was a simple process to create a quick message on your chunky Nokia 5110 mobile phone.

Text messaging caught on and usage exploded as everyone quickly used mobiles to chat or remind friends and family of events. Commercial businesses and organisations quickly jumped onboard with marketing messages and service notifications, including messages for payment reminders to customers.

There were limitations to early SMS text messages and still are, but not a lot has changed to the process other than how you created the message, evolving from pressing a little rubber/plastic key to touch screens!

What is happening to SMS and why care for income recovery? 

For those with Android handsets* which is basically anything but Apple mobile phones, users will start to see the emergence of RCS or Rich Communication Services messages. This is a long overdue evolution from basic SMS text messages.

*(Android handsets make up most of the UK mobile phone market)

Rich Communication Services have been around for a few years on Android handsets, but its only now with the widespread role out of the 5G mobile network and the mobile networks are backing this technology heavily in 2021, that it will become familiar.

If you are not familiar with 4G or 5G, your mobile phone handset will already be 4G capable and using the 4G mobile networks. These networks are being upgraded due to new technologies & 5G. This new standard has several benefits over your current 4G: higher speeds, less latency, less interference and better efficiency.

Besides the boring network technical details, your basic SMS text message will jump from a plain text message with URL links, to a far more interactive experience for customers. What you see below is an example of a familiar SMS message on the left-hand side, and on the right is an RCS message as it is delivered, completely different and fully interactive!

Why has this Rich Communication Service come about?

Organisations have known for a long time that trying to get customers to install ‘Apps’ or applications on their smart phones to manage services or debts has proved disappointing for many and a forlorn hope.

The goal is to give the customer the experience of an App without the need for them to install anything or visit a website to complete an interaction.

From my own experience, I have a smart phone cluttered with Apps. A few I use daily, but the majority are only used a handful of times, or once and then never again. Apps are awfully expensive to build, maintain and range from clunky and fiddly rubbish to the few quality App services that often rely on advertising to pay for their upkeep.   

What businesses do know and what customers want, is a way to interact with an organisation or complete a transaction with the simplicity of an App, but without the hassle of installing anything or logging in via a portal website. 

RCS messages do exactly this with a secure interactive user experience with options and intelligence branded to each local authority. It is what they call an ‘immersive experience’ with nothing to download or hyperlinks to a website. The most important aspect is security and that RCS messages cannot be copied by fraudsters attempting to represent a local authority!  

For all local authorities and especially revenues teams who manage the debt recovery, RCS will change everything as it will make services far easier for customers to access and complete transactions.

Why not stick with SMS messaging?

SMS is not dying off but finally evolving from a basic message that we are all familiar with, to a rich experience.  

Recent evidence shows that basic SMS text messages on their own are now less effective, and the recent rise in fraudulent fake messages is making some customers skeptical of messages asking for payments.

Case management modules for sending basic SMS text messages for local authorities have severe limitations and the reporting on message delivery is hopeless to non-existent. Nothing is learnt or gained about the customer and their propensity to pay. Shot gun blasting of these simple SMS messages with truncated content, to lists of customers asking them to pay never worked well and never will.

RCS is not about colourful messages and buttons to payment engines, it is all about messages that incorporate Chatbot process automations and intelligence.

In more recent times many local authorities have invested greatly to improve ‘Customer Portals’. Like Apps, redeveloping websites to encompass all local authority services is expensive to do well and maintain. Like an App, there is the problem of getting the customers to register and use it.

Because customers are pointed to websites from SMS Text Messages, many find the site on arrival too complex, with too many options and so they abandon the process. 

It was reported that each failed transaction can cost the council at least ￡2.83 in call centre costs. Source: Socitm (Goss) https://www.gossinteractive.com/article/3500/Overcoming-the-5-points-of-local-authority-channel-shift-failure

When a customer cannot find what they want on the website, they will call the authority, creating higher call volumes which is commonly reported by authorities. It is not just local authorities that have this problem, but it is the number 1 reason why the customer is calling and keep calling until they speak to someone.

RCS Messages are designed with automations to keep the transaction within the message and not always require a link to a website.

With that in mind, for customers in debt, you need to make the service as simple as possible to have a better chance of them making a payment. Installing Apps, linking to a website or registering, are all barriers to better outcomes. We all make decisions on a visual basis, so if it is not clear - then expect delays or high abandonment.

Physical letter deficiencies

SMS text messages were the early digital alternative to postage, but their simplicity lacked nearly as much as mailed letters. Neither method indicates any customer interaction, readership or give any indication of propensity to pay or vulnerability.  

RCS messages bring a new level of reporting that guide all these areas. They will directly give insight for revenue teams on next action decisioning.

Everything we do online leaves a footprint or mark, and yet this reporting insight is underused to make decisions on what actions to take with a customer. RCS Messages incorporate process and automation, and reporting shows customers that may need more support.

Breaking down customers into segments has been the key to improving results and helping those cases usually referred to enforcement. Reporting from RCS makes this process so simple. 

2020 was not just unprecedented for its effect on all of us, but it also made a seismic shift in terms of the public’s habits & how we all complete transactions. 

Offices closed and staff moved to work from home for the foreseeable future! That should mean local authorities need to look for ways of enhancing our recovery processes and importantly understanding a customer’s financial ability to pay!

Physical lettering, like SMS, is no longer as effective as it was, and the postage costs are climbing. Unless processes adapt to how the customers behave, recovery rates will continue to fall. This is not the end of mailed lettering yet or for some time, but incorporating new RCS digital elements and reversing the contact cycle to digital first strategy will help.

Over 50% of consumers today say they prefer a self-service approach to dealing with debt, where they are in control of their own interactions, at their own pace and at a time that best suits them, using whatever method they choose. (Evenings and weekends)

These same customers, however, still want easy and instant access to documentation or to information and help 24/7. Only this technology can really guide a customer through this process.

To summarise the benefits of RCS.

RCS is a game changer with higher customer interaction rates than existing service delivery tools such as SMS. It is making services easy to access and you will see more and more RCS come into use this year, as services are migrated over to this format. With the expected avalanche of debt cases expected this year, this could be a technology worth exploring for a new long term approach.

How do you set-up RCS? There is a design and set-up process, but this is about building a workflow process into the message which forms the Chatbot that the customer can interact with. RCS services for each user, requires a registration process which is exactly why fraudulent messages are frozen out as the providers determine genuine users and access.   

From the simulation screenshot shown here you can see a simple part of a process to manage direct debit cancellations. The options and opportunities are endless for RCS.

If your authority is still dwelling on the use of basic SMS messages, then it may be the time to leapfrog from the 90’s technology into the 21st century with a service that will help the customer and not just inform them of an outstanding matter.

By Daniel Pearce - Director of Business Development - Telsolutions Ltd