Telcos must embrace technological innovation to manage customer debt

Jason McGee-Abe
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John Storrie, head of programmes and business systems at Arvato Financial Solutions, tells GTB what proactive data techniques telcos can employ to identify customers at risk of falling into unmanageable debt.

John Storrie - Arvato
John Storrie, head of programmes and business systems, Arvato
Debt-related interactions, such as letters, phone calls and emails can be extremely uncomfortable for the consumer with some choosing to ignore them as a result. For many telco providers, these customers will flow through internal processes for up to three months before their accounts are closed and a debt recovery agency (DCA) is called in. By this point it could have a significant impact to the telco’s bad debt provision and days sales outstanding (DSO).

Outstanding debt has a negative effect on a telco provider’s bottom line. In recent years the issue has been exacerbated as more consumers buy their phone, broadband and digital television services from one provider, resulting in higher customer bills and operators potentially having to write off larger amounts of debt. Providers should therefore look to find a balance between retaining customers and collecting debt in a way that can deliver a positive experience for the consumer in order to secure beneficial future relationships.

A key part of this is making the process simple and providing a tailored, personal customer journey – an important factor when dealing with something as sensitive as debt collection. Technological innovation will provide telco providers with an opportunity to address this, enabling customers to self-serve through new payment platforms and cognitive systems that will make a plethora of customer data available to debt management agents at the click of a mouse.

Tailored digital platforms

Today’s digitally savvy consumers increasingly expect to be able to engage with a business across a range of online channels at whatever time suits them. In addition to this, customers with outstanding debts often feel embarrassed or awkward about their situation, and so handing them the opportunity to self-serve online can navigate this problem, while providing customers with digital access to information on their debt and options to pay.

RISE is one such communication tool that we’ve seen deliver considerable success. When a customer’s account goes into arrears, they are automatically sent a personal URL directing them to a customised secure portal where they can view the details of their debt and a range of manageable solutions to resolve it. Providing a one-stop-shop where customers can receive this information in a personalised, easily digestible format makes the process of debt recovery simpler, cheaper for the operator and immediately less adversarial from the customer’s perspective.

Making better use of customer data

To supplement self-serve platforms, implementing a system that can provide debt management agents with a comprehensive dashboard of customer information and recommendations in real time, will help them resolve issues quicker and in a more personal manner. Although it sounds futuristic, cognitive technology, or artificial intelligence, already offers operators an opportunity to make this a reality.

The technology itself has the capability to collate and draw on big data from multiple, disjointed systems and build it into the everyday interactions debt management teams have with customers. This can provide them with a comprehensive view of customer’s habits, outstanding debt, previous contact and details of any extenuating circumstances. The software can then harness this information to develop tailored strategies for agents to use while they’re speaking to a customer on the phone. Together with minimising call time and reducing the number of potentially uncomfortable questions an agent has to go through to resolve a customer’s case, it can ultimately take the decision out of their hands and increasing overall productivity.

But before settling a case, telco providers must make quick contact with the customer to limit the build-up of arrears and increase the likelihood of resolving a debt amicably at an early stage. Once a cognitive system has established that a customer needs to be contacted, it will work with a dialer platform to process preferred call times and contact numbers by analysing existing customer information, freeing up staff to focus more time on resolving complex cases.

What’s clear is that the key to safeguarding brand loyalty and maximising available revenue is the effective management of customer experience. And while this is can be difficult when operators have to collect outstanding revenue in competitive market conditions, using technology to develop an approach that is specifically designed to help the customer, whether that’s through an agent or self-service, is the most sensible way to achieve this. GTB