Financial Literacy and Technology for Ethical Debt Collection

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Many people have a terrible stigma against debt collectors because they often use threats of violence and field collections. These debt collectors also tend to be less focused on providing financial education. Improving the financial literacy of debtors is essential to manage their debts better.

This is important for applying for a loan at an official and legal institution. Usually, in official institutions, debt collector collection activities do not threaten customers’ lives. That way, the debt collector’s collection method is worrying, leading to wrong actions, so that customers will not experience verbal and non-verbal threats.

Currently, financial institutions have struggled to reduce the number of non-performing loans (NPLs) caused by the pandemic. The Financial Services Authority recorded banking NPLs of 3.21% (gross) as of February 2021. This figure increased by about 0.04% from January 2021.

Rising NPLs drive the need for financial institutions to understand borrowers’ cases, link them to changes in their payment behavior, and guide them in debt management. Meanwhile, the bad stigma against debt collectors also shows how crucial ethical debt collection services are.

Placing customers in the middle of the debt collection process also encourages financial institutions to manage their risks. This requires a debt collection strategy that digitally includes individual customers and engagement options to provide a consistent and positive customer experience.

In response, Flow developed a debt collection service supported by artificial intelligence (AI) technology by utilizing it for an efficient collection process and emphasizing financial education.

“We believe that the presence of Flow Debt Collectors in Birmingham, in addition to helping companies reduce NPL numbers, can also help provide good education about the world of collections, as well as the current business economy.

Flow utilizes advanced technologies such as collection scoring, voice to text, emotion recognition, the best time to call, sentiment analysis models, and psychological profiling for an efficient customer-centered debt collection process.

Flow believes that improving financial literacy is the key to accelerating financial inclusion, especially in the midst of the Covid-19 crisis. So invest in the right technology and focus on providing a good customer experience, a Debt Collection Agency Nottingham that can also be tailored to the needs of lenders and borrowers by making the process digital, accessible, providing positive solutions, and serving well.

A successful collector requires strong motivation, perseverance, and resilience in dealing with various types of customers in arrears and adequate operational knowledge. Of course, they must also have sufficient provisions in the form of a good understanding of billing law.

“By supporting full financial education/literacy for the community, such as public education regarding debt collection, borrowing, financial calculations, and solutions for debt settlement. And in the future, we will start a Financial Literacy project called FlowCares.