We’re entering a precarious financial era, with some experts suggesting that the near future will be marked by increasing inequality and soaring levels of debt. This massive uplift in global debt—compounded by the economic impact of coronavirus—means that existing frailties within the global financial system may well lead to a full-scale debt crisis.
This is especially apparent in Europe. Consider the fact that European Union household debt accounted for a massive 53.2% of the Euro area’s nominal GDP in September 2020.
Growing concern over the rising number of non-performing loans (NPLs) means that European banks and financial institutions are turning towards new and novel collections strategies. As a result, the European debt collection software market is set to increase at a compound annual growth rate (CAGR) of 11.1% between now and 2027.
Beyond software alone, collections departments need to find ways to make their job easier, more efficient, and more effective. They need to ensure they’re actually able to get in touch with past-due customers, reducing wasted efforts to a minimum (such as sending out emails that consistently bounce).
They need to stay on top of the latest trends, leveraging developments in consumer psychology to create consumer-friendly dunning strategies that will maximise their chances of success. And of course, they need to ensure they’re armed with the right daily tools to keep them focused on the figures and metrics that truly matter.
This post will list 4 free debt collection resources to transform your collections success, empowering agents to be as effective as possible.
1. Free email verification/skiptracing
If you work in collections, you likely engage in skiptracing on a regular basis (i.e trying to locate a past-due customer based on the information they provided when applying for credit). It can be immensely frustrating spending all day, every day searching for individuals who seem to have just disappeared into thin air.
You might, for example, find that your emails consistently bounce. It’s therefore crucial that you use an email verification service during the sign-up process to ensure that the email addresses customers provide are genuine. With anywhere from 41% to 60% of consumers habitually providing companies with incorrect details, this is more important than you might think.
Fortunately, there are some handy online tools (with free verification credits before needing a paid version) that can help you out with this. Check out the following three to see which one you like best:
2. General wisdom
Collections is changing with each passing year. New technologies are transforming the way consumers buy, borrow, and repay. Consequently, collections agencies are increasingly leveraging these new channels themselves in a bid to make collections as consumer-friendly as possible.
Scientific developments are also unearthing how consumer psychology impacts collections success, allowing collections departments to craft dunning strategies that resonate with each individual consumer.
The main takeaway here is that collections agencies need to move with the times. What worked well last year might not work well this year. Collections is an ongoing dance between financial institutions and their past-due customers, requiring constant reevaluation and reinvention.
To stay ahead of the latest industry trends, check out these trusted free debt collection resources:
- The seven pillars of collections wisdom: This piece from McKinsey, one of the world’s leading consultancies, distils 7 must-know, future-proofed collections concepts. An invaluable resource.
- The Financial Brand: This financial publication is bursting at the seams with innovative ideas and insights to make financial marketers as effective as possible.
- RSS Reader Chrome plugin: Easily keep track of your favourite blogs, whitepapers, and more. The best collections agencies are constantly on the lookout for ways to improve. With the RSS Reader Chrome Plugin, you now have a way to easily collate all the best resources together in one easily accessible hub.
- Investopedia: With its massive glossary of definitions, free tools, and more, Investopedia is an unparalleled free resource.
- receeve’s 2021 Guide to Next-Generation Enterprise Collections: If you want to cut right to the chase, download our 2021 Guide to Next-Generation Enterprise Collections. It’s jam-packed with unmissable insights to help you future-proof your collections strategies.
Calculators are essential weapons in a collections department’s armoury. For instance, by knowing and tracking your average days sales outstanding (DSO) month-over-month, you can directly connect outreach efforts and other process-related changes in your department to improvements in collections results. Our free Days Sales Outstanding calculator makes this process a breeze. Simply download the spreadsheet, plug in your numbers, and you’re good to go.
You might alternatively want to calculate the Net Present Value (NPV) of what you’re owed—in other words, how much your money will be worth when it’s repaid by your past-due customers. To calculate your NPV, simply head to Financial Mentor’s free online calculator.
4. Collections messaging templates
Last but not least, check out our wide range of collections outreach templates. Quit writing endless outreach emails from scratch. Instead, use our templates to quickly fire off carefully curated messages that expertly target each of your different segments. If you need to tweak something, go ahead—alternatively, feel free to use them just as they are.
Take your collections strategies to the next level with these free debt collection resources
It’s never too late to improve your collections strategies. By taking full advantage of the trusted collections resources listed above, you’ll drastically cut down the amount of time you spend on skiptracing, calculate complex financial figures with ease, stay in-the-know at all times, and have a ready-made set of outreach templates to rely upon at all times.
Want to find out more about how to future-proof your collections strategy? If so, check out our Future of Collections in Banking white paper.