Most collections operations already have five or six ways to contact a customer. Very few have one conversation.
That gap is what omnichannel collections is about, and it is why adding a channel so rarely fixes anything. A lender can add WhatsApp, keep the letters, run an SMS campaign alongside an email journey, and still leave the customer explaining their situation for the third time to an agent who cannot see what the last two messages said.
This guide covers what the term actually means, what each channel is good for, how to decide what goes where, and how to know whether any of it is working.
Omnichannel collections means every message a lender sends and every reply a customer gives sits in a single record, so the conversation carries on from where it left off no matter which channel it moves through. Multi-channel means having email, SMS, letter and voice available. Omnichannel means the customer only has to explain themselves once.
The distinction is not academic. A quick diagnostic, and most operations fail at least two of these.
Inbound replies. A customer replies to an outbound SMS. Does that reply reach anyone, or does it sit in a queue nobody reads?
One view of the history. An agent opens an account at nine in the morning. Can they see the email sent on Tuesday, the text sent on Thursday, and what the customer said back?
Handover between channels. A customer moves from the self-service portal to a phone call. Does the agent know what they already filled in?
Moving a conversation. A conversation starts on SMS and needs more space. Can it move to email without becoming a separate thread?
If the answers are no, the operation is multi-channel. The customer experiences that as being asked the same question three times, which is exactly the point at which engaged customers stop engaging. Getting contact strategy right is one of the main levers on collecting more from the same book, because most uncollected money sits with customers who were contactable and were not reached well.
Every channel is the wrong choice somewhere. The useful question is not which channel performs best overall, but which one suits this message, to this customer, at this point.
Email. Cheap at volume, with room for detail, links and attached statements. Deliverability is the weakness: arrears email is filtered aggressively, and a good proportion of the addresses on any book were abandoned years ago. Strong for confirmations, documents and anything the customer may want to keep. Weak as a first attempt to re-engage someone who has gone quiet.
SMS. Read fast, and the highest immediate response rate of any digital channel. Cost per message is small but meaningful across a portfolio. The 160-character limit means SMS carries a prompt and a link, not an explanation, so it works best as a door into somewhere else. Sender ID and link presentation matter more than the copy, because a message that reads like a scam gets deleted regardless of what it says.
WhatsApp. Supports longer exchanges, delivery and read confirmation, and two-way conversation without the character limit. It needs opt-in and approved message templates, and it costs more per conversation than SMS. Shared devices and family accounts make privacy a genuine consideration in arrears, so it suits customers who have chosen it rather than customers you have decided to move there.
Secure in-app messaging. The message lands inside the customer's authenticated account, alongside the balance and the arrangement it relates to. It is the right home for anything sensitive: income and expenditure detail, arrangement terms, vulnerability follow-ups. The limitation is that it does not notify on its own, so it usually needs an SMS or email to tell the customer something is waiting. It works best where self-service is already the destination rather than an afterthought.
Letter. The most expensive contact per customer and the slowest by several days. It is still the only channel available when you hold no digital contact details, and still required for certain statutory notices. Treat it as a legal instrument and a route of last resort, not a routine reminder.
Voice. The most costly contact by a wide margin, and the only one where you can hear that something is wrong. Reserve it for conversations that need judgement: vulnerability, complex affordability, an arrangement that has broken twice. Using it as a default first contact is how contact centres end up expensive and ineffective at the same time.
Voice is the channel where AI is moving fastest, and it would be odd to write about contact strategy without saying so. Conversational AI now handles inbound identification and verification, simple payment taking and basic account queries well enough that some lenders are piloting it in collections.
Our position is cautious rather than dismissive. A collections call is not a standard service call. It is a conversation with someone who may be frightened, embarrassed or in circumstances they have not disclosed, and the skill in it is noticing what the customer has not said. That is the part current systems are weakest at, and it is also the part regulators look at hardest. There is a reasonable case for AI handling verification, payment confirmation and out-of-hours triage. There is a much weaker case for it handling an affordability conversation unsupervised.
Flexys does not currently offer an integrated voicebot, and we are not going to pretend otherwise. Our approach is the same one we take to payment providers, credit data and open banking: lenders should choose the supplier that suits them, and we integrate with it. If you are piloting conversational AI in your contact centre, the question worth asking of any collections system is whether those calls and their outcomes land in the same customer record as everything else, or in a separate one.
Four inputs should drive the decision, and most operations use one.
A reminder on day three and a notice on day 60 are different messages with different jobs. Early contact should be cheap, light and designed to let the customer resolve things without speaking to anyone. Later contact carries more consequence and earns a more expensive channel.
The most valuable input and the most commonly ignored. If a customer has replied to two texts and never opened an email, the strategy should already know that, and the next message should not be an email. This is the difference between a contact schedule and a contact strategy.
Stronger than anything inferred, and rarer. Capture it when a customer gives it, act on it, and hold the negative version too: a customer who has asked not to be called at work, or not to receive post at an address they have left.
Some notices have prescribed form and delivery requirements, so they cannot simply move to SMS because it is cheaper. More important, some account states should stop outbound contact entirely. Breathing Space, an unresolved complaint and a deceased notification all mean collections activity pauses, communications included. A contact strategy that keeps sending in those states does more damage than one that sends nothing, and getting that right is a systems question rather than a policy one.
The wider point is that channel choice should follow from the customer's current situation automatically. If changing the strategy for a group of accounts means rebuilding a campaign by hand, it will not happen often enough to matter.
Timing is the part of contact strategy most often left at its default, and the cheapest to improve.
Working calendars. Nothing useful happens when a payment reminder lands on a bank holiday. Actions falling on non-working days need to roll, and the direction matters: a reminder rolls forward to the next working day, while a notice tied to a deadline rolls backward so the customer keeps the full window.
Spreading the send. If 40,000 messages go out at nine in the morning, the inbound arrives as one wave and the contact centre spends the day behind it. Spreading sends across a window keeps inbound volume roughly matched to the people available to answer it. That is a service-level decision as much as a communications one, and it is usually invisible in campaign planning.
Time of day. The argument for evening and weekend contact is not that response rates are marginally better. It is that people deal with money when they have the space to, which for most working customers is not between nine and five. At MotoNovo Finance, 25% of customer engagements through the Flexys digital journey took place outside contact centre hours. Those are conversations that would otherwise have been a missed call or nothing at all.
This is the part that makes the rest work.
When a customer replies to a text at eleven at night, that reply belongs to the same conversation as the email three days earlier and the call last week. If the systems treat it as a new event, the agent who picks up the account tomorrow starts from nothing, and so does the customer.
One account, one contact history
Payment reminder sent with a link to the portal
Statement attached and sent by email
Customer signed in and began an income and expenditure form
Customer replied asking to move their payment date
Agent called, saw the part-completed form, and agreed a new date
Arrangement confirmed by secure message in the portal
Illustrative. What matters is the order and the single record, not the particular dates.
Practically, that means three things. Every message, sent or received, sits against the account in one chronological view regardless of channel. An agent can move a conversation between channels without starting a new thread, so something that begins on SMS and needs more room can continue by email. And automatic messages belong in the same record as manual ones, so an agent never has to ask a customer whether they received a confirmation the system sent.
There is a compliance consequence as well as an operational one. When the regulator or the Ombudsman asks what you told this customer, when you told them, and what they said back, that is either a query against one record or a reconstruction exercise across a dialler export, a mail house file and three inboxes. Keeping communications inside the same auditable record as the collections activity is the difference between evidencing treatment and reassembling it.
Contact strategies are rarely wrong at launch and almost always stale two years later. Four rules keep a test honest.
Run champion and challenger. Hold the current strategy as champion, run a variant against a portion of the population, and move only when the challenger wins on something that matters.
Change one thing at a time: channel, timing, wording or sender. A test that changes three of these tells you the combination worked and nothing about why.
Measure the action, not the open. Open and delivery rates say a message arrived. The metrics worth optimising are payments made, arrangements set up, self-service journeys completed, and inbound calls avoided.
Benchmark against your own book. Industry response rates are averaged across portfolios that do not resemble yours in product, balance, demographic or arrears age. Your own results from last quarter beat anyone else's from last year.
A message is only as good as what the customer did next.
The size of the prize is not marginal. At Water Plus, re-processing accounts into new Flexys journeys delivered a 5% uplift in monthly cash collected. The accounts were the same accounts. What changed was how and when they were contacted.
The FCA's Consumer Duty raises the bar on communications in three ways that bear directly on contact strategy.
Communications must be understandable. Under the consumer understanding outcome, set out in PS22/9 and the accompanying finalised guidance FG22/5, the test is not whether a message was accurate and compliant but whether a customer in financial difficulty actually understood it and could act on it. That is a reason to test comprehension, not just delivery.
They must suit the customer. The consumer support outcome expects channels and timing that work for the person receiving them, with particular regard for customers in vulnerable circumstances. The four drivers of vulnerability in FG21/1, health, life events, resilience and capability, all have channel implications. A customer with a cognitive impairment may need longer to respond and a written record. A customer in a controlling relationship may need a channel that is not visible on a shared device.
And they must be evidenced. Firms are expected to monitor and demonstrate the outcomes their communications produce, which requires the record described above rather than a set of send logs.
Alongside the Duty, CONC 7 sets expectations for dealing with customers in or approaching arrears, and certain statutory notices carry prescribed requirements on form and delivery.
Flexys is not a law firm and this guide is not legal or compliance advice. Confirm your channel rules with your compliance function before changing how statutory communications are sent.
Pick the single point in your contact schedule where you already know the message is not landing. The day-seven reminder that nobody responds to. The letter that goes out because it always has. Change one variable, run it as a challenger, and measure the action rather than the open.
Contact strategy is one of the few areas of collections where a small change compounds across the whole book. It is also one of the few where the change costs configuration time rather than capital.
Flexys builds collections software for UK lenders, finance providers and utilities. Communications, arrangements, actions and decisions sit in one system with a full audit trail, across email, SMS, WhatsApp, secure messaging and letter, whether sent automatically or by an agent.
See how a contact strategy is built, tested and changed across every channel.
Book a demonstrationRelated reading: our guide to implementing an effective pre-arrears strategy covers timing and channel choice before the first missed payment. For sector-specific contact challenges, see collections for water companies and collections for telecoms.
Multi-channel means a lender has several ways to contact a customer. Omnichannel means those channels share one record, so a conversation continues across them rather than restarting in each. The practical test is whether an agent can see everything a customer has been sent and everything they have said back, regardless of channel.
When the account state says so. Breathing Space under the Debt Respite Scheme, an unresolved complaint, a deceased notification, a fraud report and an insolvency should all pause collections activity and communications until the account has been reviewed. A strategy that keeps sending in those states does more damage than one that sends nothing. Because it depends on the system recognising the state rather than an agent remembering, it is a systems question rather than a policy one.
There is no rule preventing it, and engagement is typically strong. It requires customer opt-in and pre-approved message templates, costs more per conversation than SMS, and raises privacy considerations on shared devices. The same Consumer Duty and CONC expectations apply to a WhatsApp message as to a letter.
More often than most are. Strategies are rarely wrong at launch and usually stale within two years, as contact data ages and customer behaviour shifts. Run a challenger against the current champion continuously rather than reviewing to a calendar, change one variable at a time, and judge the result on what customers did next: payments made, arrangements created and sustained, journeys completed, and inbound calls avoided.