In keeping with an increasingly customer-centric approach towards collections taken by the debt recovery industry in the UK, leading agency Wescot has worked to ensure the development of enhanced arrangement management processes. The improved processes will help make certain that reasoning behind defaults is understood and also to enable appropriate action when needed to maintain an affordable repayment plan. The improved arrangement management will help determine what should be done in a given situation, taking into consideration any changes that have occurred in the circumstances of the customer.

A review of Wescot’s collections performance over the 12-month period before September 2013 demonstrated a significant increase in overall collections delivery from prime banking stock across that period. The improvement, in excess of 15%, occurred although the market has been experiencing economic and regulatory pressures that might have been expected to induce a downward trend. The shape of recovery curves is being altered by customer-centric and other practices that have recently come into use in the debt recovery industry. There has been a greater focus on delivery of top-quality customer contacts, alongside investment in improved and ongoing processes of arrangement management. There has also been more of a focus on productive customer engagement and working on delivering repayment plans that are sustainable.

While lower contact conversion rates have been observed, with a coinciding reduction in initial break-in delivery, this has not prevented uplift in collections delivery trends. The uplift can be credited in part to improved stick rates and the benefit built from them in the long run. That in turn provides an explanation for the significant growth in established, paying stock’s value that Wescot has recently observed. The current collections trends indicate the increasing embedded value of recoveries stock. A larger number of truly sustainable repayment plans are being established and managed in the industry, driving that increase in value.

The long-term benefits of positive customer engagement is shown by these recent results, with more appropriate outcomes for lenders and individuals emerging from a compliant collections approach. Debt collection agency investment in analytical capability as well as technology is vital to the success of this approach, as it provides for the optimisation of positive contacts. Further, organisations should invest in agent development so that customer interactions can be of a consistently high quality. A strong long-term collections curve is likely with a sustainable cash flow coming from repayment stock.