LexisNexis Risk Solutions has released its first ever report on the state of collections within the first-party credit market. In developing its report, LexisNexis Risk Solutions spoke with 20 different first-party collectors, including 16 different financial institutions and four credit unions.
The company is holding a webinar this month to discuss the findings in the report. Registration for the webinar is available by clicking here.
The most significant paint point for first-party collectors is likely something that third-party collectors are dealing with as well — data hygiene and contacting and locating individuals.
While considered “old school,” traditional phone calls are the most effective method for receiving payments, even with younger individuals, according to the report. Most individuals are accustomed to receiving collection phone calls and are comfortable paying collectors over the phone, compared with doing so via mail, email, and text messaging. But getting people to answer the phone remains a key pain point for this communication channel.
Millennials and members of Generation Z are more likely to respond to a text message collection inquiry, according to the report, but a text message precludes first-party collectors from being too specific about the details of an account, which can keep people from replying.
“If collection inquiries are rising in what currently seems like a steady economy, how will the industry fare if a recession hits?” said Sean Britt, senior director, collections and investigations, LexisNexis Risk Solutions. “With both the broader US economy and the collections industry in a state of flux, it’s never been more important for collectors to prioritize the customer experience, which means ensuring that collectors have the proper technologies and methodologies in place to adequately reach those customers. Through our discussions with bank and credit union executives who are charged with leading the collections portfolio, our report provides a holistic picture of the challenges first party collectors face, how they overcome them and where they think the industry is headed.”
