Why Do I Need a Self-Service Collections Solution?

People want to help themselves. That’s why debt collection organizations should seriously consider implementing a self-service collections tool.

A self-service collections tool is a web-based portal that allows customers to find information on their various debt obligations with your organization, and propose settlements to those obligations. In many cases, a self-service option is the best option, not collector outreach.

Why Is Self-Service a Better Option?

A self-service tool is a better option than collector outreach because it maps more closely to how consumers behave online:

• They want 24/7 convenience.
• They want to receive all information and options at their fingertips, in a format that gives them total control.
• And they don’t want to engage with company representatives until they’re ready.

Unfortunately, many firms respond to outstanding debt obligations with behavior that directly contradicts these preferences, such as: 

• Interruptive contact via phone or mail produces few results.
• High-pressure tactics push for settlements while alienating customers.
• Providing few mobile and web options to customers who want to resolve their obligations.

A self-service collection solution comes standard with features that cater to evolved consumer needs. The result is improved collections success and better bottom-line business results. Here are four reasons your organization needs to consider implementing self-service.

1. Self-Service Aligns With How Consumers Behave 

There has been a sea change in how consumers behave thanks to the popularity and ubiquity of the internet. Today, consumers expect seamless, frictionless, and fast access to products and services online, 24/7, across any device. This is what they’ve received from the world’s most popular tech companies—and it’s what they now demand from financial institutions, telecoms, and utility providers. 

Fail to provide this experience and watch your collectors fail to perform, your customers run into competitors’ arms and your bottom line plummet.

That’s where self-service comes in. A self-service collections tool offers consumers the option to learn more about their debt obligations and self-cure them using any device at any time, all without the tedious involvement of collections staff (unless customers say they won't help). 

This is better for customers, and it’s better for your business: it’s not only a more successful approach but one that’s easier to maintain and scale.

2. Self-Service Scales in Ways That Other Solutions Don’t

Growing debt obligations may be outside your control. After all, companies struggle globally with this phenomenon. But your response to those growing debts doesn’t have to be.

Personnel costs are one of the collections department’s biggest expenses. That makes it costly to scale your staff when more debt obligations crop up. Combine that with the changing consumer preferences mentioned above, and you have a recipe for disaster. Your organization will pay for more staff, but receive only marginal returns as the traditional collections approach fail to perform.

A self-service solution, on the other hand, scales quickly and cost-effectively by providing self-cure options to more customers without incurring higher costs. The best solutions have no limit to the number and size of customer segmentation that they can handle.

3. Self-Service Improves Transparency, Which Improves Business Outcomes

The best self-service solutions offer customers the following information when they login to their portal:

• Summary of their entire debt situation.
• Detailed information per delinquent loan or account, including current balance, overdue amount, days past due, last payment, and minimum amount for profile improvement. 

Having reviewed their financial status, the debtor can then perform a range of actions for each delinquent case, such as:

• Enter a Promise-to-Pay (PTP).
• Choose a range of tailored debt settlement options.
• Pay through a credit card or bank account.
• Provide evidence for the inability to repay.
• Contact a collection agent to discuss the case further.

This type of transparency throughout the entire process raises self-cure rates and kept promise ratios since customers have all the information needed to make decisions and can assess options at their own pace.

4. Self-Service Is a Private, Always-On Solution That’s Legally Compliant

Privacy is important to your customers. When you call them and attempt to force a settlement, they rarely want to be interrupted. And they definitely don’t want to talk about their debts while in public or with family and friends. 

Self-service solutions let them resolve their obligations privately when they want to resolve them. This is better for customers, and it keeps you legally compliant.

Many countries place legal limitations on when collectors can call customers, shrinking your windows of opportunity to get in touch with debtors. Self-service, however, ensures that when customers act on their obligations or reach out to you, they want to do it and it’s legal to do so.