How to build a high-margin, low-touch approach in retail collections

The economics of retail credit collections can be painfully tight. If you’re spending £10 per contact (agent wages, office overheads, telephony and letters) on accounts where the average balance is only £200 to £300, every manual touch chips away at a thin margin.

When you’ve got high volumes and low average balances, manual intervention is the primary enemy of margin. To scale profitably, retail credit leaders are embracing a low-touch approach to control the cost-per-account.

The high cost of hello

Do your most valuable assets (your people) spend 80% of their time on low-value, repetitive calls?

Are they debt chasers, taking card details over the phone or reading out bank statements; tasks that a machine can do faster, more accurately, and at a fraction of the cost?

If so, you can't grow your book without growing your headcount, which eats into the very margins that make retail credit viable.

How customer self-service keeps your cost-per-account down 

The solution to reducing running costs is a real-time self-service portal advanced enough to mimic a high-performing agent. If you integrate omni-channel comms, Open Banking and automated affordability tools, you can move 90% of routine churn to your digital portal. 

1. Automated affordability: Instead of a 20-minute phone interview, the customer shares their transaction data via Open Banking in 30 seconds, or completes an online form in their own time.
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2. Dynamic payment plans: The system offers payment plans based on real-time income and expenditure data, not guesswork.
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3. Always-on service: Retail customers shop at midnight. They should be able to resolve their credit issues at midnight, too.
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Cutting down on the intrusive phone calls that customers dislike also supports compliance with CONC 7.3.10R,  which prohibits firms from pressurising customers to repay in unreasonable amounts or unreasonably short timeframes. Self-service lets customers review their options in a pressure-free environment, which supports the FCA's broader expectation of fair, non-coercive collections, all while keeping your costs down.

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Elevate your agents: from chasers to specialists

When you automate routine tasks, you save money and improve job satisfaction across your collections team. Your agents stop being chasers and become negotiation specialists. That frees them to focus on the accounts that genuinely need human judgement and complex problem-solving. They get more time to help customers in vulnerable circumstances.

Automate the routine, not the relationship

Efficiency in retail credit is about not doing things that can be automated. Digitise the routine so your people can give better service where it’s needed most.

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See how Flexys helps you maximise self-service and automation without losing the human touch.