During the peak of the pandemic, many consumers reduced their spending, leveraging their stimulus payments and the savings cushion they briefly created to pay down debt — primarily their credit card balances. But as the world reopens and with pandemic-era support scaling back, many borrowers are forced to face up to increasing debt burdens, including difficulties in paying for household expenses. Despite those headwinds, people are back to spending and charging, further challenging debt servicing capacity.
For lenders to enforce claims cost-effectively and implement debt collection best practices, the business imperative should now be focused on delivering more holistic customer support and debt resolution schemes:
- Engaging with customers on their preferred digital channels
- Improving process and cost efficiencies through automation, artificial intelligence, and other emerging technologies
- Understanding what customers want and what the industry climate demands