coeo podcast ep 5: What's the future for outsourced collections work?
As a DCA we’ve enjoyed incredible growth over the past decade. We set our stall out by embracing new technology as a unique selling point and built success on the back of strong and deep collections foundations. With over 150 collective years of traditional and new age industry experience, we know we’re in a good place to continue our development arc.
But complacency is the killer of progress, so we know we need to keep our ‘finger on the pulse’ to make sure we adapt to the changing needs of our clients and their customers. The Collections industry is in continuous evolution so understanding the direction of the industry and how we can best serve it, is integral to moving forward.
Earlier this year we invited a guest panel of experts to take the stand at our ‘Collections in the Digital Age’ event and encouraged them to discuss some of ‘The Biggest Questions’ facing the collections industry. We recorded the discussion and have presented it as a podcast for your listening pleasure and below we’ve also added the transcript so you can explore it in detail.
In this episode of our ‘The Biggest Questions’ podcast series we challenged our panel of experts to forecast the future of outsourced collections, you can now listen or read the transcript on what they had to say.
But before we get into the transcripts let’s introduce our first-class line up of panellists:
- Gary Grey (GG) Head of Collections at Spark Energy
- Caroline Burston (CB) Operations Director at coeo
- Caroline has worked in the Debt Collection industry since 1993 and gained extensive experience at several collection agencies and solicitors’ practices. Caroline is a well-known industry figure and brings extensive compliance experience and knowledge to coeo and is also a member of the prestigious Credit 500.
- Tony Gunderson (TG) 30 years + experience in financial services
- Lisa Beeching (LB) Head of Supplier Management and Quality Assurance at 1st Central
- Lisa is currently Head of Supplier Management and Quality assurance at 1st Central Insurance and Technology managing key supplier relationships across 45 suppliers spanning all operational areas from sales through to claims.
- James Squires (JS) Business Development Director at coeo
Interested in our services? To book a digital, self-isolation friendly, meeting.
JS: “What’s the future for outsourced collections work? Who shall we go too for this… Tony?”
TG: “Yeah, I think the future for outsourced collections is probably very good to be perfectly honest. I think as we’ve said earlier on what you want in each part of your business is expertise.”
“Now you would hope, for example, that we as lenders are experts, in terms of assessing the risk of how much we can lend to somebody, the likelihood of them paying back etc and that’s a big part of what we do; when we get that wrong then you know our business will fall, but in probably smaller to medium-sized companies, you’re not necessarily going to have the expertise in terms of the collections side.”
“Again it’s in partnership, I would always see things like this as in a partnership, you’d probably want almost as an arm of your own company; whilst we know it’s outsourced you’d want that relationship to be such that you feel it’s more part of your company whether that’s via the white-labelled or not.”
“It’s like Tim was saying in terms of values, mission statements etc, you’d want that to flow through the process even though somebody else was managing at that time for you. So, it’s up to a lot of good communication and interaction between the companies but I see there’s a big place for outsourcing, definitely.”
JS: “And you mentioned there, you know, within a smaller organisation where there was potentially a lack of expertise I suppose could there be an argument to also say that actually even in larger organisations there will always be an opportunity for champion challenging against your internal practices?”
TG: “Yeah absolutely because you want to get two things: the best results that you can but also you want to ensure the outcome for the customer, which from a regulatory point of view is what you’ve got to focus on. If you can manage those two through partnerships, because there’s going to be things: if you look at coeo as an example, you’ve got a range of different debts that you’re collecting, you’ve got a range of different strategies that even some of the big companies may not be coming across, they haven’t needed to use a certain strategy or the experience as they’ve moved into different products. So, I think yes there’s still another opportunity there as well.”
JS: “Brilliant, brilliant. Yes, Gary?
GG: “I agree with Tony wholeheartedly. I think in terms of that business partnership; I always feel like the litmus test for a white label DCA where they’re acting on behalf of you and as far as the customer is concerned they are part of your company, the litmus test is that they don’t know that they’re speaking to another entity, that they continue to think that they’re speaking to Spark, I think that’s quite critical.”
“Then some of the things that you’ve touched upon today: so you know you’ve talked a lot about AI and technology, as a department within the organisation, we are continually competing with the other departments for IT resource and funding for the different things that we do. What I see a DCA as, in part, is an opportunity to sort of bypass that and go ‘do you know what all of these tools that I wanted, it’s ok the DCAs got them, I’ll utilise them’ and then I don’t have to sort of duke it out with the other departments in terms of who’s going to get a budget for what IT resource’.
“I think that’s quite critical and when we’re looking at DCAs it’s an integral part of the offering. You know what functions they have, what channels they operate on, are they multifaceted.”
“Within Selkirk, which is where the collections department is based, we have a real difficulty in recruitment just because of the local area’s location so we purely use a debt collection agency to supplement some of our staff. So, you know when we are taking a little while to recruit people then we will use them for a period of time and then when we’ve got loads of staff then we’ll sort of give them back. So that business partnership element is kind of fundamental to us.”
JS: “Great ok. I’ll bypass you for this question Caroline haha. But Lisa if you wouldn’t mind giving your opinion on this one as well.”
LB: “I think I agree. We use it from a white label point of view from early doors. We use it very successfully. it’s a seamless journey.”
“We do it because you guys have got the expertise. We’ve talked today around where you guys are going; the whole point of this conference is around digital, and the investments that you guys have made are ahead of what we’ve got internally.”
“I’m sure all companies here have their own internal agendas and things on the roadmap and their IT resources are tied up until the end of that time. To be able to lean on you guys both in having that digital capability because this is your bread and butter, it’s what you do, but also there’s an expertise that comes with it. It makes sense for us to continue to use that expertise and take the stress and strain away from us, we would do the work at the very first point but once it starts getting a little more time consuming when you guys can do it as efficiently as you can, and get the results that you get; it makes sense for us.”
“The alternative: we haven’t got all of the voice the clever stuff, so we’d be that organisation sitting there with 50 people on the phone trying to do it. So, it wouldn’t make good business sense certainly for us at this point in our journey to be able to do a thing like that. We’ll take your expertise.
GG: “Just a last point. Just a comment around the Coronavirus. As far as sort of outsourced collections is concerned you know we have debt collections agencies specialised in specific areas dotted throughout the UK. So, in terms of contingency for us we can quickly move, should there be any issues, to our different partners to help support us. You know when I talk about a business partnership, I mean it in the truest sense of the word.
JS: “Yes, I didn’t think about that actually, but it really does spread the risk for you doesn’t it.