The collections market

Collections refers to money that customers owe a business. When a customer does not pay the business within the specified terms, the amount of the bill becomes past due, and the customer becomes delinquent, for example, when a minimum payment for a credit card is 30 days past the due date or a utility bill goes unpaid for two weeks. The goal of collections is to recover all or part of the owed debt by getting a promise to pay from the delinquent borrowers.

To understand how Pega Collections can solve a lot of the issues that businesses collecting debt are facing, it is important to recognize the pain points in today's market.

Collections is a difficult, costly, and time-consuming process. A challenging economy contributes to this complexity. In the US market alone, 33 percent of Americans hold debt that is currently in collections. This debt amounts to roughly USD660 billion. Companies that seek to collect the debt face complicated and frequent regulatory changes. Lastly, several different institutions contact borrowers in financial hardship, simultaneously. It is increasingly difficult for collection specialists to provide an empathetic, customer-centric experience, especially by using traditional collection channels. As a result, the current effective collection rate is sagging at an all-time low of 20 percent.

Moving to a more digital approach can improve the experience for the customer, the collector, and the collections operation. In contrast to businesses that rely on traditional collection channels, lenders that implement digital-first solutions see multi-percentage point upticks in resolution rates, threefold increases in monthly installment payments, and higher levels of self-service usage. The cost of collections for these companies has fallen by at least 15 percent. For example, one bank improved its digital communications through advanced email campaigns. They made the emails more engaging and easier to navigate, and they included concrete options for recovery. As a result, the bank saw more than a 40 percent jump in email openings and a 150 percent rise in click rates.

A market leader in real-time decisioning, Pega Collections offers an increased performance of your collections operations by deploying a fully automated, intelligent omnichannel customer contact strategy. Pega Collections drives business intelligence and AI into every customer interaction, regardless of the channel by collecting and analyzing data from all over the client's company. Your organization can create highly personalized, perfectly timed payment plan recommendations to suggest to the customer while ensuring regulatory compliance is always up to date.

With Pega Collections, inefficient, error-prone manual processes and hand-offs to the back office are replaced with end-to-end work automation and easy legacy system integration. As a result, you see a substantial reduction in servicing time and costs.