In the collection industry, we can see that investment in customer contact channels by large companies and small and medium companies is largely divided.

A new report from TransUnion and Aite-Novarica Group finds the entire collections industry slow to adopt new communications and other solutions

CHICAGO, Dec. 07, 2022 (GLOBE NEWSWIRE) — More than one in three collection companies (37%) now use text/SMS messaging, and 31% use this communication channel with consumers. This is a slight increase from last year when I used it. A different story emerges when we separate large enterprises (100,000+ accounts) and small enterprises (less than 100,000 accounts). Over half (56%) of large businesses now use text/SMS messaging, but only 17% of small businesses have adopted this channel.

The findings were revealed today in the fourth annual industry report by TransUnion (NYSE: TRU) and Aite-Novarica.Charting Your Course and Steering for Success: The Collections Industry in 2022Based on a survey of 140 third-party debt collection professionals conducted in the second and third quarters of 2022, this report explores overall trends, challenges and opportunities in the collections industry. .

According to the report, large businesses continue to invest in solutions that create efficiencies in their efforts to comply with the Consumer Financial Protection Agency’s Regulation F requirements. Small businesses, on the other hand, which are likely to be budget constrained, are lagging behind this trend.

“The slow adoption of text and SMS messaging was somewhat surprising given the restrictions Reg F placed on outbound calling and the clear preference for text by American consumers as a communication channel.” business. “In general, the success of companies in this space depends on their adoption of digital solutions that deliver efficiency and cost savings.”

Although the adoption of digital solutions has slowed, the industry appears to recognize the importance of taking advantage of new solutions and approaches. Overall, 34% of businesses plan to add text/SMS messaging (among other tools) to their communication channels within the next two years. Again, this looks different when broken down by company size. Large enterprises appear poised to meet consumer preferences for communication channels and consumer demand for on-demand self-service capabilities.

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horizon machine learning
Further down the list is machine learning technology. 31% of large enterprises are currently using an in-house or outsourced machine learning solution, and 45% are considering one. This tool is likely to grow in popularity as the supply of data scientists improves, the technology develops further, and regulations surrounding its use tighten.

The main reason businesses need these solutions is to be able to predict which communication channels are most likely to get consumer response. Evaluate the past activity of your account to prescribe the next course of action. Respond to inbound and bring consumers where possible.

“Right now, less than a quarter of the collection industry is using some sort of machine learning solution. “However, given how this technology can help companies maximize efficiency and increase revenues, we believe this technology will become an essential tool in the near future.”

changing workforce
With this increased focus on new technologies and solutions, collection companies are showing a corresponding shift in resources. The survey found that 55% agree or strongly agree with plans to invest in agentless contact strategies such as chatbots and text messaging. In this regard, 53% agree or strongly agree that consolidation and innovation will reduce jobs in the collections industry over the next year.

It’s not clear why, but nearly 80% of respondents agree or strongly agree that hiring is much more difficult than it was two years ago. Small ray of hope: Slightly fewer (67%) or strongly agree that retention is much harder than it was two years ago.

“This report shows a changing sea as the industry evolves in line with regulatory demands and consumer preferences. Technology will be used more broadly, but smaller businesses will need to carefully choose solutions that maximize their strengths in reaching out to the right parties.”

About reporting
A quantitative survey of 140 third-party debt collection professionals conducted in late Q2/early Q3 2022 provides insight into challenges, trends, and innovations emerging in the third-party collection industry. Gain insight. Confidence intervals with 8-point error bars. Differences noted among survey respondents, including company size, collection footprint, and change in survey results year-on-year, are significant at the 85% confidence interval. This is his fourth annual survey of the third-party collection industry conducted by TransUnion and Aite-Novarica Group. A full report is available here.

About Aite Novarika Group
Aite-Novarica Group is an advisory firm that provides mission-critical insight into technology, regulation, strategy and operations to hundreds of banks, insurance companies, payment providers, investment firms and the technology and service providers that support them. Our experts, comprised of former senior technical, strategic and operational executives, and seasoned researchers and consultants, leverage the deep insights gained through our extensive network of clients and other industry contacts to We provide actionable advice to our client base. Visit us on the web and connect with us on Twitter and LinkedIn.

About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that enables trust in the modern economy. We do this by providing actionable photos of each person to ensure they are representative in the market. As a result, businesses and consumers can confidently transact and do great things. We call it Information for Good®.

With a major presence in more than 30 countries on five continents, TransUnion provides solutions that help create economic opportunity, extraordinary experiences and personal empowerment for hundreds of millions of people.
http://www.transunion.com/business