Former VP of Global Collections for American Express and current head of Surilogic Associates, Anand Joshi, dropped by with an update on what's happening with credit card write-offs.

The short answer? He's still expecting a 30-40% growth rate through 2024. And that's just for credit cards!

Looking at these numbers indicates continued rising account volumes across lending. Is it too late to prepare?

As the saying goes, the best time to plant a tree was 20 years ago. But the second best time is now.

So if you're feeling behind the curve with the year-over-year growth of delinquencies in credit cards and beyond, don't worry. You can still take action now that will make sure you're prepared to make it through whatever comes.

Five things you can do right now to make sure your collections team is on point:

1. Enhance risk segmentation and predictive analytics

Invest in advanced data analytics and machine learning techniques to improve risk segmentation and identify high-risk accounts early.

Develop predictive models that leverage historical data, account behavior, and macroeconomic factors to anticipate potential delinquencies and defaults.

These steps will enable proactive engagement with at-risk customers and optimize resource allocation for collections efforts.

2. Strengthen collections strategies and processes‍

Review and update collections strategies to ensure they are aligned with the changing market conditions and customer needs.

Implement a multi-channel approach, leveraging digital communication channels, self-serve options, and personalized outreach to improve customer engagement and collections effectiveness.

Streamline processes to reduce manual effort and increase efficiency, while ensuring compliance with relevant regulations.

3. Foster a customer-centric approach

Recognize the financial challenges faced by customers in the current environment and adopt a customer-centric approach to collections.

Train collections staff to demonstrate empathy, actively listen to customer concerns, and provide flexible repayment options and hardship programs when appropriate.

Regularly monitor customer feedback and satisfaction levels to identify areas for improvement and maintain positive relationships.

4. Collaborate closely with risk, compliance, and strategy teams

Establish strong cross-functional collaboration between collections, risk, compliance, and strategy teams.

Regularly share insights and findings to develop a holistic view of the credit portfolio and inform strategic decision-making.

Work together to assess the impact of macroeconomic factors, such as unemployment rates and interest rate changes, on collections performance and adjust strategies accordingly.

5. Invest more in technology and automation that has rapid ROI

Allocate resources to upgrade collections technology infrastructure and automate manual processes where possible.

Implement a robust collections management system that integrates with core banking systems, provides real-time data visibility, and supports workflow automation.

Explore the use of artificial intelligence and chatbots to handle routine customer inquiries and free up collections staff to focus on high-value tasks.

Continuously assess and adopt new technologies that can improve collections efficiency and effectiveness.