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Consumer Debt Collection at all time high

Consumer debt collection is at an all-time high. As a result of this, officials of CRM and other business technology vendor SAS are claiming that financial institutions are reportedly being pressured to recover unpaid debts in an attempt to rebuild cash reserves in a tightening market.

Debt collection itself  requires resources to execute the recovery process. And it’s not as easy as sending the lads round around to inquire about the health of someone’s knees and use the opportunity to show off their nice new cricket bat. Things are much nicer these days. And probably as effective.

“Financial services institutions must re-gear their analytic techniques to adapt to a new playing field,” said Brian Riley, research director of bank cards at TowerGroup. “Rising unemployment, coupled with a protracted recession and increased credit costs make existing tools obsolete. Successful lenders that apply advanced analytics to optimize their strategies experience particularly strong results.”

Debt collection, according to SAS (News – Alert) officials, is “delicate. Customers are sensitive to how, when and why they are contacted.” In their view, most debt collection approaches fail to identify who best to contact or which channels to use.

First Coffee knows what you’re thinking: “Call centers.” Yes, that is often the most effective communication method – are also the most expensive. SAS said using predictive analytics helps debt recovery companies make effective use of their call centers and alternative methods of communication, such as SMS, IVR, e-mail that may also achieve successful results at low costs.

SAS officials said that using their approach, collection managers can plan and prioritize outbound communications, “balancing the organization’s capacity with the likelihood that customers will respond.”

Cary, North Carolina-based SAS’s officials said at the time that the marketing software was expected by HF Holidays officials to create better targeted direct mail campaigns and e-newsletter offers to its customers, based on accurate customer data.