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The Future of Collections

Experian
Experian

We live in a digital world, but has business' debt collections practices embraced this new medium? Discover the latest trends in the collections space - from mobile to virtual agents.

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The future of collections
Digital collections and the consumer
©Experian2
“The future has already
arrived.
It's just not evenly
distributed yet.”
— William Gibson
5/25/2017 Experian Public
©Experian3
Consumer debt
5/25/2017 Experian Public
85.3
77.8
44.9
31.8
28.1
26.3 25.5
29.3
2009 2010 2011 2012 2013 2014 2015 2016
Totalcreditcardcharge-offdollars,$Billions
15%↑
Regulatory trends
• Regulatory uncertainty and pressure
• CFPB limits call attempts
• FCC ruling “one and done”
• Vendors are an extension of FI
Client trends
• Banks keep debt in-house
• 3rd Party consolidation
• Subprime credit card lending is up
• Sub prime auto lending is up
©Experian4
The seismic-shift to digital has changed how consumers
interact with their providers
• Consumers are hyper-connected and have numerous
preferred channels
• Multiple touch-points lead to a purchasing decision
• A personalized, consistent experience across channels
is the new standard
“Multi-channel customers
are increasingly the most
sophisticated, demanding
and time-starved
customers; ….”
— Deloitte Consulting
Demand for frictionless
and seamless customer
experience
5/25/2017 Experian Public
©Experian5
The takeover of the Millennials
0
10
20
30
40
50
60
70
80
90
2014 x xx 2050
Millennials Gen X Baby Boomer Silent
Millions
5/25/2017 Experian Public
©Experian6
Generational Financial profiles
5/25/2017 Experian Public
Average
VantageScore®
Average
debt
Average debt
excluding mortgage
Estimated
average income
Bank card
balances
Bank card
utilization
Millennials 625 $52,120 $26,485 $34,430 $3,403 43%
Generation X 650 $125,000 $26,670 $50,400 $6,752 41%
Baby Boomers
& Silent
709 $87,438 $19,217 $46,340 $5,603 25%
National
average
667 $88,313 $23,089 $46,790 $5,340 34%

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The Future of Collections

  • 1. The future of collections Digital collections and the consumer
  • 2. ©Experian2 “The future has already arrived. It's just not evenly distributed yet.” — William Gibson 5/25/2017 Experian Public
  • 3. ©Experian3 Consumer debt 5/25/2017 Experian Public 85.3 77.8 44.9 31.8 28.1 26.3 25.5 29.3 2009 2010 2011 2012 2013 2014 2015 2016 Totalcreditcardcharge-offdollars,$Billions 15%↑ Regulatory trends • Regulatory uncertainty and pressure • CFPB limits call attempts • FCC ruling “one and done” • Vendors are an extension of FI Client trends • Banks keep debt in-house • 3rd Party consolidation • Subprime credit card lending is up • Sub prime auto lending is up
  • 4. ©Experian4 The seismic-shift to digital has changed how consumers interact with their providers • Consumers are hyper-connected and have numerous preferred channels • Multiple touch-points lead to a purchasing decision • A personalized, consistent experience across channels is the new standard “Multi-channel customers are increasingly the most sophisticated, demanding and time-starved customers; ….” — Deloitte Consulting Demand for frictionless and seamless customer experience 5/25/2017 Experian Public
  • 5. ©Experian5 The takeover of the Millennials 0 10 20 30 40 50 60 70 80 90 2014 x xx 2050 Millennials Gen X Baby Boomer Silent Millions 5/25/2017 Experian Public
  • 6. ©Experian6 Generational Financial profiles 5/25/2017 Experian Public Average VantageScore® Average debt Average debt excluding mortgage Estimated average income Bank card balances Bank card utilization Millennials 625 $52,120 $26,485 $34,430 $3,403 43% Generation X 650 $125,000 $26,670 $50,400 $6,752 41% Baby Boomers & Silent 709 $87,438 $19,217 $46,340 $5,603 25% National average 667 $88,313 $23,089 $46,790 $5,340 34%
  • 7. ©Experian7 Connecting with the digital consumer 5/25/2017 Experian Public
  • 8. ©Experian8 Elevate collections into the digital age 5/25/2017 eResolve™ gives your clients a digital communication channel Manual collections practices Consumer in the digital world # No Caller ID eResolve™ Frictionless consumer experience • Digital (mobile and web) • Non-threatening • Resolution-driven • At the convenience of the consumer’s place and time • Self serve / cost effective
  • 9. ©Experian9 eResolve process Debt resolution options 5/25/2017 Experian Confidential Invite consumer • Email link • Web site • Text link Get started • View debt details Pay in full • Cure Options (Pre C/O) • Pay in full in 1 payment • Pay in full over time • Defer payment up to 14 days Negotiate to pay less • Settle in 1 payment • Settle over time • Defer payment up to 14 days Counter offer • Multiple options to resolve • Several attempts to negotiate Offer accepted Consumer has already accepted the payment plan Payment set-up • Client-consumer agreement • Regulation E disclosure • E-signature • Payment portal Summary • Debt details • Debt resolution details • Payment schedule • Client-consumer agreement Consumer logs in
  • 10. ©Experian10 5/25/2017 Experian Confidential 999 2017$75.00$300.00 4111111111111111 May 2020 adam@sample.com Adam K Fellow
  • 11. ©Experian11 • Consumer preference has changed to digital • To maintain performance a digital strategy must be employed • Engage the consumer in the digital medium they prefer: – Text – Avatar – Email Conclusion 5/25/2017 Experian Public