In the past decade, collections shops globally have faced different challenges depending on the markets they operate in. In many markets, historically low loss rates led lenders to reduce the size of their collections operations. Their shops are now running lean, focused on efficiency and minimizing costs. The low losses also led to relaxed acquisition criteria and offers of riskier products to customers with low credit scores or little credit history. As consumer spending—and revolving balances—rose, so too did delinquencies. With loss rates mounting, lenders suddenly find themselves without adequate tools or staff to address their at-risk accounts effectively. The new approaches discussed here can help all lenders achieve best-in-class collections operations, improving revenues and lowering costs.
