Towards a New Dynamic
Published Tuesday, 11th October, 2011
Matt Subert, Sales and Marketing Director of the lewis group, says that increased regulation and the demand for 360-degree compliance is driving a new agency/client relationship.
There is a change sweeping through the collections industry. The bar in terms of legislation and compliance has been raised significantly and, with the unprecedented focus on standards and ethical behaviours within the financial services community, the challenge is going to get greater still.
The result is a new dynamic. The pressure to tackle the regulatory regimes and demonstrate compliance throughout our sector is changing the way that clients and agencies interact.
Increasingly clients are driven to look for partner agencies that fully understand the need to manage reputational risk and that can demonstrate a strong track record to the highest industry standards. Increasingly too they are looking for agencies who see themselves as part of the solution– an extension of their business as opposed to a bolted-on, third-party provider. Even the age old cliché, that clients are looking for ‘partners’ rather than ‘suppliers’doesn’t really do justice to the new requirement –the world we’re moving into now demands seamless relationships, businesses who can integrate fully and share the same performance drivers and results.
Reputational Risk
One of the most obvious outputs of the additional pressure on clients to balance performance against reputational risk is the increased use of the formal tender for new business – tenders that are both managed through in-house procurement or outsourced via third party specialists.
There is, of course, a need to demonstrate rigour in selection; the compliance led era we inhabit demands process and evidence of process in almost everything we do; the client’s challenge though is getting the balance right between complying with the process and arriving at the right appointment based on actual business need.
With an unprecedented amount of tender activity in the first six months of this year, many in the industry have been left scratching their heads about how best to respond. Some have increased the size of their sales functions; others are outsourcing tender production or contracting with a specific resource. Most are uncomfortable. What we cannot do, however, is complain. Debt collection agencies have to adapt.
Personally I think a little more rigour in this area is probably no bad thing; it forces everyone to raise their game, both in terms of how they respond and in providing solid evidence of those things that clients are looking for. But it’s a question of balance: I don’t think anyone in the sector would want a situation where the ability to deal effectively with a tendering process outweighed the importance of an ability to perform and deliver a good service.
And here there is a further challenge for the client. The assessment process has to be robust enough to distinguish between those who can ‘talk the talk’ and those that ‘walk the walk’. Taking on new business is always going to be a challenge, and the secret from an agency perspective is balancing the need of existing clients with the desire (and requirement) to satisfy a new customer with quick results, and that means having both the capacity, the tenacity and the scale to keep all of the balls in the air at the same time.
Today’s debt collection agency also needs to be proactive in the way it treats its client relationships. It needs to be seen as the instigator of new strategies and ideas, always offering up advice on how performance can be improved and finding intelligent ways of using data and information. But fundamentally it needs to demonstrate that it can be trusted, and trust comes from having a management team that is genuinely close to the client relationship, and a range of services that are controlled and delivered in-house, without being outsourced to a third party and diluted in any way
To us, performance and compliance should be a given, but an agency can never rest on its laurels. Innovation, in thought and action, remains key and will continue to do so well into the future.