New CFPB Guidelines: Don’t Lose Sight of the Basics

Arjun Mitra,
Firstsource

As of this year, debt collectors are now under federal supervision for the first time with new guidelines from the Consumer Financial Protection Bureau (CFPB). Extending the CFPB’s regulatory portfolio of financial companies, the guidelines have a broad impact on how the financial service industry outsources to handle and interact with bank customers.

The guidelines evaluate the quality of compliance management systems, review practices and identify any risks to consumers throughout the debt collection process. This creates higher standards for tracking customer experience across banking channels and social media.

Financial service companies need to proactively go above and beyond compliance goals. Meeting compliance is a given, but in today’s world it is not enough. Organizations need to take it a step further to ensure that customer information and data are being handled correctly.

To do this, companies will need to evaluate how they engage with consumers.  Creating a robust program with specific processes and procedures throughout the organization that identifies and engages with customers early on will ensure that customer experience is top of mind for all employees.

The process can be broken out into three parts: strategy, analytics, and training/education.

1. Strategy: The strategy dictates how we engage with each and every customer so it must be customized at each touch point to provide the best overall service. Being respectful of your customer’s time and cognizant of the words used goes a long way in solidifying a successful engagement. When developing the strategy, companies should confirm that all channels are fully integrated and on par with regulations.
2. Analytics: Information gathering is a vital part of the collections process and must be fully utilized. Among the varied areas where this kind of intelligence can be put to work is determining which customers will convert sooner than others, or sorting against intent to pay and trying to bring about a positive outcome in ways that are cost-effective.  With this information at our disposable, we are better equipped to converse appropriately with the customer.
3.  Training/Education: Training and education is an important component of the process and must not be overlooked. Create and develop a training program which relays key messages, strategies, reporting and metrics to all employees. Training and education establishes ownership and accountability.

Combined, these three aspects form an overall holistic approach that elevates the customer experience and ultimately improves results. And to take it a step further, organizations should consider designating a Chief Customer Experience Officer to monitor and invest in the infrastructure that is needed to audit all of the internal and external functions that touch a customer. By having a dedicated position focused on delivering an enhanced customer experience, financial services companies can guarantee compliance with the CFPB and maintain good standing with customers and prospects, thus leading to a stronger economic outlook for the company.

About Arjun Mitra

Arjun Mitra is Executive Vice President of Collections at Firstsource and leads a team of employees across the company’s US and India locations, focusing on all stages of collections over the life cycle of delinquent and charged off debts.