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DEBT RECOVERY: IMPROVE YOUR COLLECTION SUCCESS RATE BY ADOPTING A FAIRER PROCESS

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Amy Robinson, Senior Brand Development Manager at telecommunications provider, Esendex

 

There’s no denying the severity and impact of the Covid-19 outbreak on the British population. Coronavirus is first and foremost a health pandemic, but due to the lockdown restrictions, closure of many high street stores, increasing levels of unemployment and a nationwide furlough scheme, the economic impact of the virus is becoming increasingly significant.

At the height of lockdown, people were given a grace period whereby they weren’t allowed to be chased for debt repayments or overdue bills. In fact, many households benefited from a Coronavirus-related payment holiday to support the population as a whole to navigate this challenging economic period. Nationwide schemes offering payment holidays for mortgages, household bills and credit card repayments were launched offering the public some much-needed breathing space.

 

Ethical debt collection given the green light

As many of the most extreme restrictions have begun to be lifted, this period of grace is slowly coming to an end and Ofgem has announced that companies are once again able to reach out to their customers and start collecting any monies owed. However, there is a significant caveat in that businesses are only allowed to reignite their debt collection processes if they act in an ethical and fair manner. Businesses must consider both the financial instability of many households as well as the psychological implications of chasing people for money at such a challenging time.

Amy Robinson

When faced with such a daunting economic situation, it can be easy for businesses to forget that many people have sadly lost loved ones and will be in a very vulnerable place. There are also those who have lost jobs and are in a far more unstable financial situation than ever before. However, for a business to survive and continue to pay its own employees, it must still try to recoup any losses and collect monies owed.

 

Traditional communication channels

Consequently, it has never been more important to treat each and every customer as an individual. For a business to successfully collect debt it needs to improve and increase the level of communication with each customer. By understanding individual situations, businesses will be able to create a more suitable payment plan and ensure that all money is collected on time.

However, it’s all well and good approaching your debt collection on an individual basis, but phoning each customer and talking through their situation could become costly. It is also likely to delay the process, as 90% of customers will not answer the phone to an unknown number.

Another option would be to send a letter to each customer detailing their debts owed and asking them to get in contact should they be struggling financially and are unable to make payments. However, sending letters through the postal service can be costly, time-consuming and doesn’t often ignite a quick and effective response from the customer. During Covid-19 people are also less keen on receiving physical letters due to the number of people that the letter will come into contact with on its journey to their front door.

 

The role of digital communication

This paves the way for a more digital approach. Often emails are the first port of call for many businesses wanting to contact customers en-masse, however, due to the popularity of this channel, it’s no surprise to learn that during the pandemic 44% more emails have been sent to customers than pre-lockdown. Consequently, the likelihood of a message being read and responded to, in such a crowded space is increasingly low.

This is where a channel such as SMS can help. According to Statista, 95% of the UK population have a mobile phone, with the average person checking their phone every 12 minutes. Companies using SMS as part of their communication strategy are reaping the benefits and experiencing marked improvements in customer engagement. In fact, energy provider Vaillant increased their customer service feedback from 3% to 47% by introducing SMS into their communication strategy.

There are several ways that SMS can be used to improve the efficiency of a business’ debt collection process. In its most basic form, it can be used as a gentle reminder that a payment is due and provide a phone number to call should the customer be experiencing financial difficulties. A step further would be sending the SMS message with a link through to a payment portal where the customer can quickly and easily make their payment. Finally, a more sophisticated mobile journey could be implemented.

A mobile journey is, in essence, a combination of communication channels including SMS, email and outbound voice. A decision engine determines the best channel and message to send to each customer based on available contact details and the amount owed. The system will then send a communication message to the customer using their preferred and most effective channel, if that doesn’t elicit a response then a second message is triggered using their second most preferred channel. This is something that energy provider npower has used to great effect, increasing debt repayments from 4% to 19% while also lowering the cost of chasing the payments.

 

Importance of the right channel and the right message

During a time of financial uncertainty for both businesses and individuals, the most effective way to engage customers is to understand their individual circumstances, communicate with them using their preferred channel and ensure that the message used is both empathetic and clear.

By ensuring that the message being sent out is economically viable for your business and most importantly, an effective means to collect debt, a business should be able to successfully recoup any monies owed while also improving their brand perception as an innovative and ethical debt collector.

 

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Business

HOW CAN BUSINESSES BREAK INTO MARKETS BEYOND THE EU?

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HOW CAN BUSINESSES BREAK INTO MARKETS BEYOND THE EU?

Atul Bhakta, CEO of One World Express

 

The build-up and aftermath of Brexit impeded the long-term plans of businesses both in the UK, and of EU businesses trading to the UK. The heavily protracted negotiations induced a culture of uncertainty in business, with few able to adequately prepare for all the future trading landscapes left on the table.

Once a deal was struck, with just one week before the Brexit deadline of 31st January 2020, organisations were then left scrambling to improvise new processes to translate their operations to the new systems and avoid spiralling costs, shipping delays, and various other disruptions.

As a result, businesses both here and in the EU saw a substantial trading slowdown in the months following Brexit, with new rules on customs checks, lengthy tailbacks at ports, denser and knottier administrative rules and new limitations on visas for the workforce all contributing to a tense trading relationship.

Indeed, the Office of National Statistics (ONS) figures revealed a precipitous drop in trading immediately after Brexit, with UK exports to the continent plummeting 40.7% year on year to January 2021.

This is a striking decline, given the historically close economic and cultural ties between the UK and EU. Inevitably, this caused a lull in long-term confidence amongst UK businesses. Indeed, a previous study conducted by One World Express in January 2021 found that 25% of UK companies doubted that they would last until the end of the year.

Atul Bhakta

Of course, Brexit is even now not a finalised issue – it will shift and evolve in significance and relevance as time passes and economies reshape; but the loss of confidence for businesses in UK-EU trade has been a tangible impact within the first year.

Accordingly, some organisations have begun exploring the scope for expansion into territories beyond the EU.

 

New opportunities attracting attention

As noted, the UK’s trade with the EU saw a sharp decline immediately following the formalisation of Brexit. While this decline has recovered steadily over the year, there has been an equally impressive parallel forming, as non-EU trade has remained mostly stable throughout.

Of course, UK imports from global markets have always remained at high levels, and when considering business growth and the economy as a whole, outward trade holds a heightened significance. On the export side of matters, ONS figures suggest that UK exports outside of the EU increased by 1.7% year-on-year to January 2021.

While a very modest increase, such figures indicate that international expansion could carry promise for business leaders, and hint at potentially lucrative opportunities within non-EU markets.

As 2021 progressed, it became evident that UK businesses’ appetite to explore opportunities further afield had grown. To take in the views of decision-makers, One World Express commissioned an independent survey of 752 business leaders in the UK, finding that 61% were either already operating abroad in some capacity, or had plans to expand into new territories over the coming year. More than six in ten (62%) reported Brexit as a key motivator in their decision to diversify beyond trading with the EU.

There was also some evidence that these plans were not solely in pursuit of the gains of modest uplifts in trade with non-EU countries. The survey found that more than two thirds (68%) of exporters had observed increased overseas demand for their products in the previous year, while 63% felt that markets outside of the EU were more willing to pay a premium for British-made goods.

The role of ‘Brand UK’ is significant here. For many years, products made in the UK have benefitted from the country’s reputation for high quality production and excellent service, which has driven a consistent rise in demand as emerging markets with high levels of consumer spending, such as India or China. In turn, UK businesses have found it easier than most to gain a foothold in new markets. Indeed, the majority (67%) of exporters reported their British brand had enhanced the reputation and demand for their goods and services when targeting international consumers.

Despite this innate – and highly welcome – competitive advantage, there are a number of factors UK firms must consider before diving in to unfamiliar markets.

 

The importance of planning

Many would be surprised to learn that a large number of businesses look to enter new markets with minimal planning in place. Notably, almost one third (32%) of exporters do not have such a strategy in place, which is likely to hamper the growth of British businesses abroad if left unaddressed. A crucial starting point for any international expansion plan lies in the research and relationship building.

Ascertaining the consumer preferences and audience behaviours in target markets, and forging appropriate connections with distributors, vendors, and ecommerce platforms, will allow firms to access consumers more easily, and in greater numbers, than marketing from scratch in unfamiliar territory. Encouragingly, according to One World Express’ research, 72% of exporters already include this in their plans.

UK organisations must also recognise the value of a robust and flexible logistics strategy. When products are being shipped to the furthest corners of the globe, there is a degree of risk if the finer details are not handled correctly. Delayed, missing, or damaged deliveries will erode consumer trust, and diminish the prospects of companies before they get off the ground. Accordingly, companies should ensure they have a transparent tracking system and efficient and user-friendly returns process. Investment in adopting the right software solutions to manage the shipping will create a streamlined and cost-effective process, affording firms the best chance at success.

Naturally, the EU will always be one of the UK’s most critical trading partners. However, as the dust settles on Brexit and the pandemic recedes into memory, the next few years present an interesting crossroads for the international prospects of UK businesses. With a tranche of new free trade agreements arriving in the near future, and international demand for Brand UK going from strength to strength, the scope for expansion into unfamiliar markets is growing apace. Provided business leaders get the finer details right, the rewards for bold investment in expansion could help charge a boom in the UK exports sector.

 

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Business

WHAT FIREFIGHTERS CAN TEACH FINANCIAL INSTITUTIONS ABOUT DATA COLLABORATION

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Gabriele Albarosa, CEO, LiveDataset

 

Digital transformation can be difficult for any business, but in the financial services industry it can prove especially tricky. Replacing manual data processes is a big step, but in an industry so heavily regulated and audited, cohesive and comprehensive transformation is crucial.

Today, the challenge is no longer in convincing financial services organisations that they need to transform their processes and tasks; the vast majority understand the benefits of automating and streamlining their financial processes.

Instead, it’s about instilling the message that there is more to transformation than ripping out and replacing outdated technologies. A good financial transformation strategy must also take into account how these technologies are implemented, ensuring they integrate into an organisation’s culture, connect data and guarantee compliance, without completely demolishing the custom processes that employees want to use.

 

Little Fires Everywhere

While business transformation offers long-term benefits throughout an organisation, individual departments are often loathe to abandon the bespoke processes that facilitate day-to-day operations. Many organisations feel under pressure to transform quickly, and subsequently focus on how to get their employees onboard with a new solution rather than integrating every minute component of the old.

As a result, digital transformation efforts tend to bypass these disparate components, leaving small, potentially non-compliant hazards smouldering like little fires across an organisation.

These “little fires” don’t immediately represent a threat to business operations, but the lack of quality control, integration, and visibility of these manual workflows, means they’re inherently high-risk.

When a pressure situation hits the organisation, like a surprise audit, legal proceedings or new reporting demands, these processes become a highly combustible cocktail for non-compliance, lost data and human error.

 

Tackling the flames

Organisations need to tackle these little fires early on, rather than sitting back and hoping they will burn themselves out. But how can they be dealt with?

If you think of these small, unregistered processes as little fires, then your team needs to think like a firefighter — being fast, agile, flexible, and well-prepared for potential risks.

So how can CFOs, CXOs and Chief Transformation Officers bring this strategy to life?

 

  1. Be fast — don’t wait around for largescale digital transformation

There’s a common misconception amongst financial service organisations that before facing the issue, you need to wait until an overhaul of department processes or an in-depth audit. This could leave you waiting years for a solution that needs to be implemented in weeks, putting your department at risk.

Organisations must act with speed and address the issue head-on as soon as it has been spotted. Businesses don’t need to wait for largescale transformation; temporary or even permanent solutions do exist and can be tailored and installed immediately — targeting the issue before it becomes a bigger problem.

In my own business, we recommend a three 3-step approach to tackle these issue quickly: First, listening to an organisation’s business challenges to locate the most pressing fire. Second, build a working example for business leaders and decision-makers to evaluate. Finally, follow up with real-time collaboration to ensure that wider company processes don’t cause similar problems in future.

 

  1. Be agile and flexible — look for customisable solution that evolve over time

Organisations are ever-evolving, and so are the problems they face. However, some financial services organisations see the answer to these problems as a one-time, short-term fix. Working to put out these fires at speed shouldn’t stop organisations from considering how to prevent and deal with future ones. That’s why businesses run fire drills!

Financial organisations need forward-thinking systems that will work now and in the future, whenever they face their next data collaboration crisis. The ability to act in an agile way is fundamental to this sort of futureproofing.

Agile, flexible solutions will enable organisations to fight multiple fires, with the same systems, as time goes on. A one-size-fits-all approach won’t work here. Putting one fire to rest won’t prevent more from happening, and not all fires are the same (just try throwing water on a chip pan fire!) Every organisation has distinct needs and that means customised solutions.

 

  1. Be prepared — implement solutions before disruption occurs

To understand their weakness and subsequently prevent fires, financial service organisations must encourage employees across departments to hold an ethos of self-improvement. Preparation is key to success.

That means establishing a comprehensive understanding of the day-to-day routines of employees at all levels. It’s in habit and routine (one-off processes, keeping data on email, spreadsheets as systems, etc) where financial fire hazards thrive.

If new, more compliant technologies are to be installed, they cannot dismantle these existing routines. Flexible data collaboration solutions are needed that perfectly match the existing way of working. Achieving the goals of transformation without any of the disruption.

 

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