Contact Center

Call Center Coaching Can Now Help Fintech Companies Struggling With Debt Collection

Mayank Dixit
October 4, 2022
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Last modified on

October 4, 2022
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Rampant developments in technology and customer expectation have caused a disruption in traditional modes of payments. 

When was the last time you paid for something in cash? Paper money is slowly moving out of fashion…it’s the time for digital currency to rise to the occasion. 

There have been visible changes in the trends across spectrums of the fintech industry- namely the way debt collections are made. 

As per a report, the evaluation of the debt collection market showed a positive uptick of almost 3% between 2017-2022. 

In recent years, customers expect a great deal of transparency when it comes to their finances. This is one of the major areas debt collection agencies are lacking. 

They aren’t able to educate customers about their collection strategies which leads to lower collection rates. 

Hence there is no question that structural changes such as the adoption of call center coaching should lead the path. 

The solution becomes all the more potent in the current scenario where total outstanding debt of non-financial organizations has almost touched $18 billion!!! 

Astounding, isn’t it? We promise that today’s article is going to be an honest, no holds barred take on the fintech industry’s bond with debt collection and how call center training programs might hold the key. 

We’ll be covering -

  1. Different categories of debt
  2. Top sources of debt
  3. Some prominent debt collection industry trends to watch out for
  4. Entry of the heavyweights- machine learning and artificial intelligence

Different Categories of Debt

Debt collection categories

As an institution or individual, you might have a tête-à-tête with some form of debt. This can either be a certain amount of money borrowed from your friend or a large loan taken from a financial institution. 

Right off the bat, we’d like to acknowledge that good debt does exist. Not all individuals have the capacity to purchase a commodity without borrowing capital. 

A good debt, in such a scenario, would be the debt that improves your net worth and helps you to build your income. 

There are several other kinds of debt such as

  1. Secured Debt

In such debts, the borrower places an asset as collateral for obtaining debt. Before lending the money, the lender might undertake a credit check to ensure the recovery of their amount. 

If the borrower is unable to pay,  lenders have the option to seize the asset. A car loan is a prime example of secured debt.

  1. Unsecured Debt

Contrary to secured debt, an unsecured debt doesn’t entail putting up an asset for collateral. The lender provides the borrower with capital with trust and the belief that they will pay the installments on time. 

In case the borrower defaults, lenders might have to take the legal route to get their money back. A prime example of unsecured debt is credit cards.

Top Sources of Debt

  1. Credit Card Debt

As per a report, the total credit card debt amounted to $841 billion in the first quarter of 2022. The seriousness of the figure can be understood from the fact that the credit card debt was $71 billion less in the first quarter of 2021.

  1. Educational Loans

In recent times, higher education has been entailing increased costs. In America alone, the value of student loan debt by 2022 has reached a shocking $1.768 trillion. 

In 2020, when the pandemic was raging across the world, more than 50% of students were pursuing their graduation with a student loan. By the time they passed out, they had a debt of close to $30,000 on their head.

  1. Healthcare

Private healthcare is another top area of debt creation. More than 40% of adults are under some form of healthcare debt. Out of these, 12% have an astounding debt of $10,000 or more.

Some Prominent Debt Collection Industry Trends to Watch Out For

debt collection industry trends

We saw in the previous section that the debt amount in major industries has already reached a significant level. 

If we go by some reports, the CFPB received more than 80,000 complaints against debt collectors in 2020. It was shocking to know that around half of such complaints were about the perusal of debt that was already paid. 

The writing is clear on the wall for the fintech industry- they need to make debt collection strategies more customer-centric. And there is no better tool than call center coaching software to make your operations more transparent. 

Here we list some of the top debt collection trends that would surely help while you sit down to select an appropriate call center agent coaching program.

  1. Establish An Omnichannel Presence

An omnichannel presence ensures that debt collectors agencies reach out to customers through the channel most convenient to them. 

This can include calls, mail, texts etc. The major benefit of an omnichannel service is that you get to know the quality of service across multiple channels. In case of lag at any point, you can adopt call center coaching to strengthen your customer service. 

Multiple channels also help you to initiate meaningful interactions with customers.

  1. Increase in Number of Accounts with Less Balance

The Fintech industry has expanded to provide customers with a variety of payment options, in addition to the classic credit card mode.  

Customers are not expected to straight up pay out of their pockets. As a result, there is not a dire need to maintain a certain balance. 

A word of caution though. Such practice should generally be avoided as you can encounter an economic emergency at any time. Moreover, if you still depend on the classic credit card mode of payment, you’d like to maintain a stipulated balance for a good CIBIL score.

  1. Debt Forgiveness

Debt forgiveness is the process by which an entire loan or a part of it can be forgiven. This means that the borrower is excused from paying any further installments.

Loan forgiveness is usually extended in case of student loans. However, all student loans can’t be forgiven and are usually extended to personnel involved in public services and similar occupations.

Entry of the heavyweights- Machine Learning and Artificial Intelligence

Most call center coaching tools use AI and machine learning to empower the customers, call center agents and managers. 

Such technology is your first line of defense for providing personalized service to customers. Platforms that make use of AI can help you analyze customer calls for certain words and phrases to know what impression they form of your business. 

With software like Convin, you are also able to get a 360-degree view of your customer’s financial behavior. At the same time, you can also target an improved security framework so that customer privacy is not compromised. 

Financial organizations can really upend customer experience management by tweaking their debt collection strategies. As more and more customers believe that you truly provide something unique to them, the loyalty and retention rates would improve significantly. 

For this to happen you have to invest in your employees and help them acquire all requisite skills. This is where a call center coaching software comes for your help. A platform like Convin helps you grade your agent’s performance and then put them up for coaching. 

You can also use a call center training program for the targeted skill development of an agent. This can be done with help of roleplays, flashcards etc.

To know how you can make a call center coaching program work for you, sign up here.

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