Debt Collection Australia Market Intelligence

*This report was last updated in Q4 2018. Please click on request customization if you are looking for an updated version of this report

Report Coverage

  • Sourcing Strategies
  • Key Performance Indicators
  • Best Practices
  • Pricing model in the industry (global)

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Regional Market Outlook on Debt Collection

Key Technological Trends

Conversational UI

  • A UI that mimics chatting with a human is called conversational UI. There are two types of Conversational UI (i) Virtual assistant (which we talk to) (ii) Chatbots (which we type)
  • Application that eases interaction with call center. It will simplify the mixed character conversation, i.e., whether the human or the system is guiding the conversation
  • Benefits: Quicker resolution, staff reduction and reduced staff turnover

Speech Analytics

  • Speech analytics is the highly adopted tool by call centre service providers
  • It is the process of analysing call records for phonemes and spot key phrases that contribute to a deeper understanding of customer meanings, intention and behaviours
  • With the implementation of speech analytics, call centre managers can identify specific customer behaviour, associated with the positive outcomes
  • The implementation of this technology has surged by 55–60% in the last 3–4 years

Benefits of speech analytics

  • Augments the evaluation of emotional content of customer and agent speech
  • Quickly delivers agents' positive and negative performances
  • Significantly improves the quality of service by monitoring agent customer interaction
  • It can help companies lower the costs and automate handling of 40–85% of incoming customer calls

Natural language search engines

  • A process to integrate multi-channels of a call centre, so as to minimise human effort and maximise service levels. This would aid the agent to process customer query in less time
  • It has huge potential to be implemented in call centres, as it will reduce the handling of large data stored at multiple locations and handling of different customers by understanding the query in their natural language

Increased usage of self-service channels

  • Voice is still the primary customer care channel used globally, however, adoption of self-service and digital channels, such as chat and e-mail, are growing at a great pace
  • It has been observed that use of web self-service, chat and community forums increased by 12%, 24% and 25%, respectively, in the last 2–4 years
  • Self-service channels provide win-win situation for both customers and companies. Customers get a chance to solve their problems without any human intervention, hence save time. On the other hand, for the companies, self-service channels reduce cost and offload support capacity
  • By 2020, customers will manage 90% of the relationship with companies, without even interacting with a human
  • By 2020, inbound call volume is expected to stagnate, due to prominence of other channels and increasing the rate of self-help services
  •  Enterprises are resorting to invest in infrastructure that enables personalisation at each touch point, making it the top investment priority for contact centre service providers

Adoption of WebRTC customer channel

  • Video-based chat is increasingly being adopted by organisations, owing to the emergence of multi-platform consumer interaction and higher acceptance by consumers because of faster support
  • WebRTC is a new technology that enables voice calling, video chats and sharing files without the use of any plugins
  • This technology allows consumers to bypass the costs associated with traditional telephony carriers
  •  It is surging fast, as it is convenient and flexible. This technology is estimated to support more than 6 billion device by the end of 2019.
  • There is an increased adoption of this channel in developed nations, such as North America and Western Europe, due to advanced internet infrastructure
  • UK foot retailer, Schuh, registered 400% greater conversion rate and 10% greater average order value for interactions involving video rather than text-based chat. Lands End, Starwood Hotels and Amazon are the early adopters of this service

Sourcing Strategies: Comparative Analysis

  • Local or national sourcing and hybrid sourcing are currently the most adopted models, however, the challenge faced by a local DCA would be low success rates due to less brand recognition among the debtors
  • Interaction with more than one DCA in Hybrid Sourcing Strategy results in higher involvement of the buyer
  • Recovery rate increases by 50–60 percent, by adoption of technologies that are more prevalent among the regional or global DCAs. Thus, the success rate is expected to be higher for the regional and hybrid sourcing strategies

Local or National Sourcing

  • Advantage: Better regulatory compliance at a country level
  • Challenge: Limited expertise on cross-border debt collections

Regional Sourcing

  • Advantage: Beneficial for companies operating across region(s)
  • Challenge: Higher commission rates for lower volumes of loan portfolio thereby affecting smaller firms more

Hybrid Sourcing

  • Advantage: Better recovery or success rate due to involvement with more than one DCAs
  • Challenge: Risks associated with sharing of confidential client credit data 

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