In November, Kyle Christensen and I had a lot of fun leading two TECHtalk roundtable discussions at CollectTech 2019 where attendees joined us in lively conversations about key opportunities facing the industry. One group spoke about ways to leverage the proposed CFPB rule changes to their advantage, while the second tackled the role played by the likes of Snapchat, Instagram and Venmo in driving the digital payment revolution.
The big takeaway from the event was no surprise – the debt collection industry is expecting significant growth and change. By “growth,” I mean both in terms of charged-off volume and revenue as record levels of consumer debt naturally age into expected rises in delinquency. The industry forecasts are well-aligned on these points, and this means that lenders and agents must prepare.
This growth is driving major investments in technology in this space. Interestingly, a large percentage of these investments are being made in SaaS-based solutions. While this may not be a surprise in many vertical markets, it is a big switch from the on-premise mindset in the broader financial services sector that has been the norm for decades. Another major wave of investment is happening in solutions that have integrated mobile functionality into their offerings. (You can check out our new EasyCollect product for our contribution to this trend.)
There were also discussions on a number of interesting examples of artificial intelligence and real-time speech analytics being applied to serve the industry through chatbots and virtual collections products among others.
Some of this technology investment is being driven by the proposed changes to the CFPB rules. Companies are certainly looking to technology to ensure they comply with the new rules as they are completed, while others, including Katabat, see these rules as opening up opportunities for lenders and debt collectors to connect with borrowers in new and more personalized ways.
The CFPB seeks to create clearer, brighter lines around permissible activity for the industry, like texting and email communications. These communications options were never considered within the Telephone Consumer Protection Act, which has guided this industry for nearly 40 years. This doesn’t mean anyone is talking about the demise of the call center, but there is a noticeable shift in investment in the evolution of borrower communication.
A final undercurrent at the event and at many events we’ve been part of this year, is the economy. Many are still bullish on the economy, while others see the increase in debt and borrowing as indicators of a coming economic shift. Our philosophy at Katabat is that the economy ebbs and flows in fairly predictable ways. Every lender and their agent partners should be taking advantage of new technologies and opportunities afforded by the CFPB rules and other regulatory decisions to set themselves up for success for whatever the economy throws their way.
Developing multi-channel collections strategies and retaining valuable customers for the long haul are good strategies for every company, regardless of the economic situation at the moment. In this industry, we make long-term decisions, and our infrastructure investments today should be made with the future in mind. This future will be increasingly mobile and increasingly cashless, both of which bring new challenges and new opportunities.
We look forward to continuing these conversations at other events in the New Year, and with our current and prospective customers at any time.
Ray Peloso, Chief Customer Officer at Ontario Systems, brings 25 years of diverse consumer lending experience, having held executive leadership roles at Royal Bank of Scotland, Capital One, Citibank, MBNA and Katabat. Ray’s prior expertise in consumer credit and lending underpins a clear vision and understanding of the challenges faced by our clients in today’s rapidly evolving digital economy.