Life is change Collections Systems are no exception

"The people who are crazy enough to think they can change the world are the ones who do." - Steve Jobs

As the financial landscape undergoes rapid transformations, the collections industry faces the pressing need for modern, adaptable technology. Legacy collections systems, while functional, often come with inherent limitations that hinder growth and innovation. Core banking technology has seen disruption from modern flexible and composable technology like Thought Machine, Pismo and 10X. Similar technology is now driving innovation and change within collections, putting control in the hands of collections managers and their teams.

This article delves into the transformative potential of modern collections technology, highlighting its core advantages over traditional legacy systems. By understanding the distinct benefits of next-generation solutions, businesses can gain a competitive edge and achieve enhanced operational efficiency.

Flex, innovate, change and learn - Can you afford not to?

“There are far better things ahead than any we leave behind.” - C.S. Lewis

Modern collections technology, with its composable, event-driven architecture, provides unparalleled flexibility. Unlike rigid legacy systems, modern solutions enable real-time responsiveness to market changes and customer needs as composable technology allows businesses to create custom software applications quickly and easily. This is achieved by using pre-built components that can be easily combined to rapidly create highly customised applications without having to start from scratch, utilising the building blocks, configuration tools and implementation accelerators that form the heart of a composable platform.

Looking from the outside it can be hard to understand the differences, afterall, many legacy solutions offer configurable agent screens and options to change elements with drag and drop functionality. However, the real test of flexibility lies in the ability to leverage any data source (outside of what is offered as a standard part of the legacy architecture) and easily create data models which relate precisely to the way you do business, visualisations of the way you use the system, and use that data within decisions with a simple process to make deep changes to the underlying data structure.

Legacy systems simply do not offer this level of flexibility due to the fact the data model and underlying infrastructure are much more rigid and prescriptive, with many changes of this nature requiring change requests to your supplier and further development, often paying the vendor to make the relevant changes due to the level of complexity and coding required.

The benefits to collections practitioners of this flexibility cannot be overstated. Collections teams can make timely decisions and adjust strategies, interactions can be tailored to individual customer preferences and circumstances, which leads to more meaningful customer experiences and improved debt recovery rates. The most important benefit is that collections teams can swiftly adapt, introduce innovative ways of working, and refine approaches without the need for extensive coding or complex and costly change requests. This makes it simple to explore new ideas, embrace new opportunities, and incorporate emerging trends without being limited by technology constraints. It allows collections to be a driver of innovation and change rather than a back office function.

Everything, Everywhere, All at Once - the Power of One

A key distinguishing factor of modern collections technology is the provision of a single unified platform that encompasses all aspects of the end-to-end collections process. Unlike many legacy systems that require fragmented integration, arising from the use of different technologies that address different stages of the end-to-end process (e.g., digital self-service and recoveries), modern composable technology offers a cohesive and unified solution. The single platform approach seamlessly converges all aspects of the end-to-end process, providing digital self-service capabilities, agent screens, worklists, DCA allocation, litigation management, customer service, and complaints handling within a single platform. By using the same workflows, decision engines, data sources, and a single immutable audit trail, this platform approach ensures that every stage of the collections and recoveries process operates on the same flexible and composable platform, with a unified and real-time view of data across all aspects of collections and recoveries.

This single platform approach provides a huge advantage for collections managers and their teams. Agents benefit from working within one comprehensive solution, removing manual processes and eliminating the need to navigate between various systems. Clear insights into the next steps and available actions are available, accompanied by guidance notes and user-friendly dashboards, empowering agents to make informed decisions during customer interactions. This leads to improved agent satisfaction and retention, whilst simplifying training for new team members. With real-time insight of the end-to-end process, agents can seamlessly pick up where customers left off on any digital self service journey as it is one single solution driving the same processes and outcomes regardless of how the customer chooses to interact. With a single platform comes a single and immutable audit trail across the entire end-to-end process, there is no hidden data and it is easy to evidence that you have provided the appropriate outcomes. Throughout the entire collections and recoveries process, from pre-delinquency to DCA allocation and litigation, the single platform approach leverages automation and data insights, providing full support to collections teams, facilitating efficient debt recovery, and fostering successful outcomes.

The benefits of a powerful, evolving, Cloud-Native ecosystem

“Roads? Where we’re going we don’t need roads.” - Doc Emmett Brown

Modern composable collections platforms are cloud-native microservices-based applications, in contrast to monolithic legacy systems. Although many legacy systems have moved to the cloud, the underlying technology is not born in the cloud or based on microservices technology and therefore requires manual upgrades that can cause disruption and shutdown the application. Modern collections platforms are based on microservices that have an autonomous lifecycle and can evolve independently and be deployed frequently, without the need to wait for upgrades to access new features or security patches. It is easy to innovate and update a single aspect of the collections process without causing any downtime or disrupting the entire system. Furthermore, cloud native solutions are inherently connectable and much easier to integrate than legacy solutions, simplifying connections with existing applications, systems, devices and 3rd party data sources on a real-time basis via APIs.

This high level of connectability allows collections managers and analysts to leverage all the available data to drive new ideas and embrace new technologies, such as open banking and machine learning. The flexible nature of the data structures enables any event or data source to be fully utilised within collections strategies and drive decisioning and workflow. This allows forward thinking collections teams to continually improve processes and strive for better outcomes for their customers, whilst increasing working capital for the business. It cannot be underestimated how future proof cloud native micro services based technology are. It allows continuous improvement and updates to the platform without requiring any downtime or upgrades. It prevents the need to migrate solutions in the future and reduces the risk of technology becoming outdated or legacy.

We all deserve the right tools to enable us to do the best possible job.

“A good tool improves the way you work. A great tool improves the way you think.” ~ Jeff Duntemann

“Technology and tools are useful and powerful when they are your servant and not your master.” ~ Stephen Covey

To summarise, while legacy systems and modern platforms may appear similar at first glance, their true differentiation lies in their adaptability and capacity for innovation. Modern collections solutions put the power in the hands of collections teams, allowing control over, and seamless updates to, all aspects of the end-to-end process. From agent screens to communication templates, these platforms are composable and easily customised enabling teams to embrace new technologies, easily conduct A/B testing, and leverage comprehensive data for advanced automation and digitisation of the appropriate customer cases. The game-changing ability of modern collections technology empowers collections managers to swiftly respond to market changes, enhance customer satisfaction, and drive meaningful results, positioning their operations for success in a dynamic collections landscape. We all know that putting the right tools in the hands of skilled and experienced operational experts delivers exceptional results.

Written by Sean Mallen - [email protected]