How to cut your cost to collect, recover more, support vulnerable customers and evidence good outcomes, without adding headcount.
Managing collections is tougher than ever. Economic pressure, the FCA’s Consumer Duty, and customers who expect a modern digital experience have turned a routine operational function into a source of regulatory and reputational risk.
Rising operational costs.
A complex and confusing compliance landscape.
The responsibility of supporting vulnerable customers at scale.
Systems that weren’t built for today’s regulatory standards.
If so, you’re in the right place. This guide is a blueprint for building an intelligent, compliant, customer-focused collections operation. It covers the four things every collections leader is judged on: improving customer outcomes, reducing risk, reducing the cost to collect, and collecting more. Each section links to a deeper resource, so you can go as far into any topic as you need.
If you’re a Head of Operations or a Collections Manager, you know the story. Your best agents are buried in admin instead of having valuable conversations with customers. The mindset of “we’ve always done it this way” is holding your business back and costing you a fortune.
The true cost of manual processes isn’t always obvious. It shows up in:
Wasted agent time. Skilled agents are stuck dialling, sending messages and copying notes between systems. They should be problem-solving with the customers who need them.
Human error. A single typo in a payment plan can lead to a complaint and hours of rework.
High contact centre costs. When customers can’t find answers online, they call you. Every unnecessary call is a direct, avoidable cost.
Risky compliance checks. Manually checking lists for customers in a Breathing Space period or flagged as vulnerable is costly and error-prone.
The difference automation makes is night and day:
Five routine collections tasks, run manually versus automated.
By taking over routine tasks, automation can increase your team’s capacity tenfold. Think about what you could do with that time back.
Every collections team has two main goals: maximise recovery rates and lower the cost of collecting. These goals aren’t in conflict. Modern collections software is the key to achieving both.
In a traditional collections model, time is your enemy. Delays from post, phone tag and manual processing directly harm your cash flow. The solution is to make it easy for customers to pay the moment they’re able.
Be there 24/7 with self-service. People manage their money online. Forcing them into a process built on phone calls and letters creates a poor experience. A self-service portal lets a customer pay or set up a plan at 10pm on a Sunday, which dramatically speeds up the payment cycle.
Stop looking in the rear-view mirror. By the time a report is compiled, the data is old. A real-time dashboard shows you trends as they happen. If a strategy isn’t working, you can fix it on the spot.
Let customers pay their way. Send an email or SMS with a secure payment link and let them choose their method: pay by bank, card, Google Pay or Apple Pay.
“Every payment that could have been recovered quickly but instead enters a lengthy collections process represents not just lost revenue but also increased costs and potential regulatory exposure.”
Consumer Lending Payment Trends, Acquired.com, 2025
Your agents’ time is your biggest expense. To reduce costs, free your expert team from repetitive tasks so they can focus on the complex cases where a human conversation really matters.
Automate the simple journeys. Most collections cases can be handled by automated sequences without any agent involvement.
Embrace self-service. It’s the single most effective way to reduce inbound calls and staffing costs, and most customers prefer it.
Use real-time data. When a customer pays online, their account updates instantly. That stops agents making unnecessary and frustrating calls.
Focus your effort. Target outreach based on a customer’s likelihood to pay, and stop wasting time on low-probability recoveries.
What if the most effective way to manage collections was to stop customers falling into arrears in the first place?
Traditional collections are reactive. They start only after a payment is missed, and that’s a missed opportunity. A pre-arrears strategy uses data to spot the early warning signs of financial difficulty, so you can offer support before the due date.
This is good for the customer and a powerful commercial and compliance tool. Offering a little payment flexibility or a budgeting tool at the right moment lets you:
Prevent foreseeable harm, directly addressing a core principle of the Consumer Duty.
Reduce default rates, averting the whole collections process and protecting cash flow.
Lower operational costs, resolving a potential issue with a low-cost automated message instead of an agent-led journey.
Build customer loyalty, showing customers you’re there to support them, not just chase them.
Our pre-arrears guide gives you a practical framework: how to use data to spot early warning signs, design effective support journeys, and prove you’re delivering good outcomes. Download the pre-arrears guide
“Collections stops being a cost centre the day you make it easy for customers to resolve things themselves. Everything in this guide follows from that principle.”
James Hill, CEO, Flexys
Commercial goals can’t come at the expense of your regulatory duties. For risk and compliance teams the stakes have never been higher. The FCA’s Consumer Duty isn’t about good intentions, it’s about proving you deliver fair and consistent outcomes. You must show your processes don’t cause foreseeable harm. With fines for collections failures reaching tens of millions, hoping your team is doing the right thing is a gamble you can’t afford.
Compliance shouldn’t just be a policy document agents follow. It should be built directly into your collections software. That’s compliance by design: your business rules embedded in the system’s workflows, so the software acts as a guardrail. Agents follow the right procedure because it’s the only path available. The system can enforce contact frequency rules or offer the correct forbearance options automatically, giving you a consistent, provable response every time.
The Consumer Duty requires you to prevent foreseeable harm. If a customer wants to pay you but your system makes it difficult, a small missed payment quickly becomes a bigger problem. A simple digital payment option helps customers stay in control and proves you’re acting in their best interest. Read more about optimising payments.
You never know when you’ll be asked to evidence a customer outcome, and when the regulator asks for a file you need to produce it instantly. Troublingly, the 2025 FCA review found that most firms were unable to effectively monitor outcomes for customers in vulnerable situations.
The usual cause is fragmented data. With the complete record of collections activity in one system, and an unchangeable audit trail, you can instantly produce:
Every communication on every channel.
Detailed notes and outcomes from every agent call.
A full history of every offer made and whether it was accepted.
Every payment, promise and plan created.
A timestamped log of every action taken on the account.
How do your current processes stack up against FCA expectations? Complete our online checklist for a high-level review of your approach to vulnerability and fair treatment. Complete the checklist
Your collections software should be your agents’ best friend, freeing them to spend time with struggling customers and supporting them to make good decisions. With vulnerable customers this is crucial. Your technology should make it easy to show empathy, not stand in the way.
An agent identifies a vulnerable customer on a call. They want to help, but their rigid system offers one option: take a payment. The agent has to ignore the customer’s needs, and a stressful call turns into a potential complaint.
Now imagine this instead. The system flags a potential vulnerability. The agent opens the account, sees the full history, and the system suggests a range of pre-approved, compliant options:
Offer a 30-day breathing space.
Offer an income maximisation check.
Signpost to a debt advice charity.
Arrange an affordable token payment plan.
This guided workflow removes guesswork and gives agents the space to listen and provide real support. It also makes their job less stressful, which helps you keep your best people. Read more about supporting vulnerable customers.
Inefficiency, compliance and customer experience are all connected. The answer isn’t to keep fixing symptoms, it’s intelligent software that solves the root cause: collections that actively improves cash flow, builds loyalty and protects your brand.
To see what that could be worth to your operation, we’ve built an Efficiency Calculator. Adjust the numbers to match your business and see how much you could gain.
Ready to see it in action? Book a no-obligation demo and see how Flexys collections software drives customer outcomes and commercial performance.
Book a demoFree agents from routine work. Automating simple journeys and giving customers a self-service portal removes the majority of inbound calls and manual tasks, so your expert team spends its time on the complex cases where a human conversation changes the outcome.
The Consumer Duty asks lenders to prove they deliver good customer outcomes. Modern collections software builds compliance into the workflow itself, enforcing contact rules and forbearance options automatically, and holds the complete record of collections activity with a full audit trail, so evidence is available on demand.
A pre-arrears strategy uses data to spot early signs of financial difficulty and offer support before a payment is missed. It prevents foreseeable harm, reduces default rates, and resolves potential problems with a low-cost automated message rather than an expensive collections journey.