The COVID-19 pandemic has brought about significant changes to many industries, and the debt collection industry is no exception. With traditional collection methods slowed down by remote work and social distancing measures, collectors have been forced to adapt and try new methods to reach debtors.
One of the major trends that emerged during the pandemic was the increased use of digital self-service. This technology was already on the rise before the pandemic, but it has accelerated as more and more people have been forced to work remotely. As a result, collectors have been turning to alternative methods such as email, SMS and direct voicemail to reach debtors.
These new asynchronous communication methods have proven to be a major success. Consumers have responded positively to the non-intrusive nature of digital collections and prefer email to phone calls. A recent survey by the Consumer Financial Protection Bureau (CFPB) showed that consumers actually prefer email to phone calls.
Another trend that has emerged during the pandemic is increased enrollment in debt settlement programs. Consumers have become more savvy about how to settle their debt, and there have been strong market signs that indicate increased enrollment in settlement programs.
While there's no way to quantify the performance of digital self-service and increased debt settlement programs, almost every debt seller, debt buyer and collector interviewed for this paper confirmed the trends.
Overall, the pandemic has forced the debt collection industry to adapt and try new methods, and these new collection methods have proven to be successful. Digital self-service and debt settlement programs have emerged as key trends that have helped the industry thrive during these challenging times. As the world continues to adjust to the "new normal," it will be interesting to see how these trends continue to shape the debt collection industry in the future.Exploring the Advancements in Debt Collection: The Emergence and Triumph of Innovative Techniques