The Relevance of Panel Management in 2020
By Matt Wallis, Head of Solutions Design
The debt management market, specifically debt collection agencies (DCAs), has contracted in the last few years. Some have fallen by the wayside, some have changed their business models to be oriented towards business process outsourcing work, and some have been bought by debt purchasers. There is still, however, a diverse and highly capable DCA market and FCA regulation has raised the level of investment, and ultimately quality, that is available. This in itself has been a cause of the exit of some DCAs.
We’ve also seen another noticeable contraction in a similar timeframe: the depth and breadth of DCA panels typically used by creditors. With the FCA regulation that saw some DCAs exit the market, creditors have become more astutely aware of their requirement for comprehensive oversight of their supply chain. In an environment where costs are, as ever, under intense scrutiny, the easiest way to increase the depth of oversight on your supply chain without increasing your resource requirement is to reduce the size of that supply chain. Of course the result of operating a smaller panel is a reduction in its range of capability and level of competition – limiting the ability to offer differentiated treatment paths aligned to customer circumstance.
In-house or panel manager? Two minds are better than one.
At TDX Group we firmly believe that when it comes to utilising third parties for engaging consumers and ultimately recovery of debt, the role and capability of a panel manager is more pertinent than ever. That view is hardly going to be a surprise given our products and services, but to be fit for purpose in 2020 that model needs to operate in a true partnership. There are profound benefits available from using a partnership based, data and analytics led panel management model. No-one knows your consumers better than you and that knowledge is critical to effective and appropriate debt recovery. Equally vital is the knowledge, experience and expertise that a partner can bring specifically in relation to debt management - this typically translates to:
- Built-in data enrichment and debt analytics - the ability to augment the knowledge you have of your consumers to build a much greater understanding, from basic residency and contact through to affordability and up-front identification of financial difficulties. Taking it well beyond isolated propensity to pay modelling, analytics teams dedicated to debt management continually test and develop segments and treatment paths relevant to driving fair consumer outcomes – working closely with the supply chain to align segments to market capability.
- Economies of scale to operate a diverse panel - by operating at a scale no individual creditor could in isolation offer a broad and deep set of capability through the supply chain. This is a capability that may not be viable for a creditor to utilise if operating independently.
- Leading on standards - underpinned by cross-regulatory requirements and working to the highest bar, clearly articulating what is expected of the supply chain and assurance against those standards, most notably in areas such as vulnerability, affordability and right outcomes.
- Next-generation supply chain oversight - a panel manager’s dedicated, experienced, supplier oversight team, utilising specialist tools, should give you a level of transparency and insight into the interactions with your customers that a typical level of internal investment simply cannot offer. The ability to benchmark huge amounts of data to compare quality between agencies, across panels or even a whole industry sector delivers powerful insight. For example, at TDX Group our customer journey information data from the supply chain enables granular activity tracking across 100% of accounts, quickly identifying any trends or potential risks and enabling root cause resolution. But these are still your customers and by working in close partnership, a panel manager should be regularly calibrating with you – and the supply chain - as to what good customer interactions look and sound like.
- Technology and operational management - a given, but taking the heavy lifting out of internal operations and offering consolidated inputs and outputs through IT-light platforms specifically designed for third party debt management can deliver greater transparency and efficiency.
Across all of these key elements a panel manager should be continuously iterating, improving and pushing the market forward, leveraging their position in the market.
A best-practice panel management model should offer you greater insight, greater customer understanding, targeted consumer treatment paths, and greater comfort over the interactions with your customers. And by working in partnership to realise those underlying benefits, then naturally - consumer engagement, resolution rates and financial returns will be higher. Panel management in 2020 looks a lot different to panel management in 2010. But with the right partner, it offers real benefits for you and your customers.
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Matt Wallis, Head of Solutions Design.