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Does this sound familiar?

• Rising operational costs.
• A complex and confusing compliance landscape.
• The huge responsibility of supporting vulnerable customers.
• Using systems not built for today's regulatory standards.

If so, you're in the right place. This guide provides a clear blueprint to build an intelligent, compliant, and customer-focused collections operation. We'll show you how to turn collections from a necessary cost centre into a strategic asset that boosts cash flow, builds customer loyalty, and strengthens your brand.

Is your team collecting debt or drowning in admin?

If you’re a Head of Operations or Collections Manager, you know the story. Your best collectors are buried in admin instead of having valuable conversations with customers. The old mindset of "we've always done it this way" is now holding your business back and costing you a fortune.

The hidden costs of manual work

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 customers who need their help.‍
• Human error: A simple typo in a payment plan can lead to customer complaints and hours of rework for your team.
• 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 not only costly but also incredibly risky.

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The difference smart automation makes is night and day:

Payment reminders

The old way (manual)

An agent manually sends standard comms.

The new way (automated)

The system sends timely, personalised reminders on the best channel.

Routine enquiries

The old way (manual)

A customer waits in a queue during office hours to speak to an agent.

The new way (automated)

A customer self-serves online 24/7: checks their balance, pays, or sets up a plan.

Assessing affordability

The old way (manual)

An agent conducts an I&E over the phone, gets approval, and sets up a plan.

The new way (automated)

A customer uses a digital I&E journey with Open Banking to set up their own plan based on your rules.

Vulnerability

The old way (manual)

A customer must call and disclose their situation. The agent manually applies the right strategy.

The new way (automated)

A customer can securely share their circumstances online, in their own time, and is auto-enrolled in the right support workflow.

Note taking

The old way (manual)

An agent types up notes after every call.

The new way (automated)

The system automatically logs every digital interaction and call outcome.

By taking over routine tasks, automation can increase your team’s capacity tenfold. Think about what you could achieve with that time back.

Collect more, faster

Every collections team has two main goals: maximise recovery rates and lower the cost of collecting. These goals aren't in conflict. A modern collections platform is the key to achieving both.

How to get payments more quickly

In a traditional collections model, time is your enemy. Delays from post, playing phone tag with customers, and manual processing directly harm your cash flow. The solution is to make it incredibly easy for customers to pay the moment they are able.

• Be there 24/7 with self-service: People manage their money online. Pushing them into a process built on phone calls and letters creates a poor experience. A self-service portal lets customers pay or set up a plan at 10pm on a Sunday, dramatically speeding up the payment cycle.
• Stop looking in the rear-view mirror: By the time a report is compiled, the data is already old. A real-time dashboard helps you spot trends as they happen. If a strategy isn’t working, you can fix it on the spot and start collecting more effectively.
• Let customers pay their way: Send an email or SMS with a secure "Pay Now" link. Let them choose their preferred 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."
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Consumer Lending Payment Trends, Acquired.com, 2025

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How to reduce your cost-to-collect

Your agents' time is your biggest expense. To reduce costs, you must free your expert team from repetitive tasks so they can focus on 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. Most customers prefer it.
• Use real-time data. When a customer pays online, their account is instantly updated. This stops agents from making unnecessary and frustrating calls.
• Focus your efforts. Target outreach based on a customer's likelihood to pay. This reduces wasted time on low-probability recoveries.
• Think beyond missed payments. If you help customers avoid arrears in the first place, it’s a win-win for them and your business. Read our guide to adopting a pre-arrears strategy.

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Consumer Duty in practice: From policy to proof

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 that 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.

Have you checked your processes against best practice recently? Use our handy online tool to give your organisation a 5-minute compliance health check

Shift to 'compliance by design'

Compliance shouldn't just be a policy document that agents follow. It should be built directly into your collections software. This is 'compliance by design'.

It means your business rules are embedded in the system's workflows. The software acts as a guardrail, making it easy for agents to follow the right procedures because it’s the only path available. It can automatically enforce rules on communication frequency or offer the correct forbearance options, ensuring a consistent and provable response every time.

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‘Compliance by design’ in action: Low-friction repayments

The FCA's Consumer Duty requires you to prevent 'foreseeable harm'.

For example, if a customer wants to pay you but your system makes it difficult, a small missed payment can quickly become a bigger problem.

Offering a simple, digital payment option is a practical way to solve this. It helps customers stay in control and proves you are acting in their best interest.

Read more about optimising your payment process

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A complete record of every interaction

When the regulator asks for a customer file, you need it instantly. A 2025 FCA review found that "most firms were unable to effectively monitor outcomes for customers in vulnerable situations.”

This is usually caused by fragmented data. With a single source of truth and an unchangeable audit trail, you can instantly provide:

• A complete record of all communications on every channel.
• Notes and outcomes from every agent call.
• A full history of every offer made and whether it was accepted.
• A record of every payment, promise and plan created.
• A timestamped log of every single action taken on the account.

Managing vulnerability: free your team to listen

Your collections software should help your agents, not hinder them. This is especially true when supporting vulnerable customers. Your technology should make it easy to show empathy, not stand in the way.

The Agent's dilemma

Imagine an agent identifies a vulnerable customer on a call. They want to help, but their rigid system only gives them one option: take a payment. This forces the agent to ignore the customer's needs, leading to a stressful call and a potential complaint.

The empowered Agent

Now, imagine this instead. The system flags a potential vulnerability. The agent opens the account and sees the customer's full history. On the screen, 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 your agents the space to listen and provide real support. It also makes their job less stressful, helping you retain your best people.

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From cost centre to strategic asset

Inefficiency, compliance, and customer experience are all connected. The solution is to move away from fixing symptoms and adopt intelligent software that solves the root cause.

This approach will transform your collections function from a cost centre into a strategic asset - one that actively improves cash flow, builds loyalty, and protects your brand.

To see how intelligent collections software can transform your operation, [insert CTA here]

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