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Collections Outsourcing | 3 min read

Top 5 Reasons to Include Texting in Your Collections Efforts

In the past quarter century, texting—like the internet—has become ubiquitous. We’re used to communicating with friends and family via text throughout the day, sending quick hellos, and coordinating plans. Americans are also increasingly reliant on text messages for professional communication and to interact quickly and easily with businesses without having to take time out of the day to sit down to make a phone call or draft an email.

While some still perceive texting as a millennial phenomenon, the data suggests otherwise. A recent report from TextRequest found that, “On average, American adults sent and received 32 texts per day, totaling 18 billion texts every day, 541 billion texts every month, and 6.5 trillion texts every year.” Breaking this down by age group, they found American adults ages:

  • 18-24 sent and received about 128 text messages per day

  • 25-34 sent and received about 75 text messages per day

  • 35-44 sent and received about 52 text messages per day

  • 45-54 sent and received about 33 text messages per day

  • 55+ sent and received about 16 text messages per day

For financial institutions, incorporating texting into your communication strategy for borrowers who are past due on payments is a smart way to improve your collections efforts while still providing exemplary customer service to retain and grow your client base. In this blog post, we’ll discuss the top reasons for integrating text messaging into your collections communication mix.

1. Talking to collections agents can be annoying.

The simple truth is, consumers often perceive even one phone call about past-due debt as annoying. Most people who are in arrears are well aware they owe money, and they aren’t interested in taking time out of their day to answer a phone call from an unfamiliar number. Instead, they want to determine the simplest and most direct way to repay their debt. They also want to be able to do this on their schedule, often from their cell phone. Text communication is often a more convenient option that has the added benefit of making you more accessible to your borrower.

2. Texting is less stressful.

For many people, interacting via text is simply less stressful. Providing a less invasive means of communication by enabling your borrowers to send a quick text message to tend to account issues will make their lives easier—and make it easier for you to collect payment. When you communicate with borrowers on the channel they prefer, you’re less likely to endanger relationships and cause undue stress.

3. Texting saves your financial institution time and money.

Traditional collections strategies such as sending collection letters and hiring staff for call centers can be a big expense, and such efforts are decreasingly effective. A recent report by the United States Postal Service found that only 41% of millennials read, review, or sort their mail on a regular basis, compared to 72% of baby boomers.

Sending a text message is a less expensive option than sending a letter or even making a phone call, and directing information to your borrowers’ phone means they can seamlessly make a payment from the same device, encouraging prompt payment. Texting is also a faster form of communication—how many texts can you send in the time it takes to send a letter or even make one phone call?

Likewise, your borrowers are busy. They have jam-packed schedules that include work, carpools, children, school, and various other events and activities. Requiring them to take time out of their schedule to call or respond to a letter is tedious and inconvenient, when you could be sending them the same information via text.

4. Texting enables automated two-way communication.

Most past-due borrowers are not eager to communicate with collections agents directly, but this often means they lose out on helpful information about repayment options. Since texting is often perceived as a less intimidating form of communication, the borrower may be more likely to respond on that channel. Aside from push texts that are one-way notices to a borrower, consider more intelligent two-way texting which can address some common FAQ’s asked by borrowers in this situation in an automated way. The more automated text answers can address, the less likely the borrower will need to contact your collection agent.

5. Sending text messages creates a sense of urgency.

Because people tend to open text messages immediately, texting is an ideal communication channel for sending time-sensitive messages. Creating a sense of urgency can help your institution collect on debts quickly, which means your institution gets paid faster.

Collecting on delinquent accounts is a major undertaking that requires a substantial investment in staff, technology, and compliance expertise. Outsourcing your collections efforts can help your financial institution effectively manage delinquency and reduce the cost of your collections program.

SWBC offers a scalable solution that saves our outsourced collections clients an average of 35-50% annually when compared to in-house efforts. Visit our website to see how much you could be saving today!

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Collections Outsourcing

Jeff Mortenson

Jeff Mortenson is VP/client relations for AutoPilot® services. Jeff is primarily responsible for client relations surrounding SWBC's financial institution group's AutoPilot services; a suite of risk and account management services designed for financial institutions that want to more effectively manage the way they interact with consumers.

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