In 2023, there is a far greater focus on collections than there would be in more buoyant economic times. Whilst the UK may not technically be in recession, it certainly feels like it is to millions of consumers and many businesses. So how is this affecting the collections landscape? What is going up in collections?

The first and most obvious increase is in the volume of consumer and commercial debt and the number of consumers and companies finding themselves in payment difficulties and ultimately in collections. This has caused a number of industry challenges including capacity issues in collections departments across all sectors and the difficulties inherent in servicing large numbers of consumer who have never previously been in arrears. This was discussed in the recent CSA DebtStream webinar.

Partly to address capacity issues and also to be in step with the digital world, there has been an increase in omni channel collections strategies, with increasing collections communications by email and SMS.  At the forefront of omni channel collections is the increase in use of digital self service collections portals, which address the collections capacity issues, whilst also offering customers choice in how they manage their payment activity.

With a squeeze on collections resources, it has become even more important to deploy resources optimally, resulting in improved, more granular collections strategies, some incorporating AI and improved customer segmentation, particularly in pre arrears, assessing risk of default and propensity to pay.

Added to these pressures on collections is the need to comply fully with the FCA Consumer Duty standards of consumer protection.