This article is part of the iA Think Differently series. Written by members of the iA Innovation Council, the series showcases thought leadership in analytics, communications, payments, and compliance technology for the accounts receivable management industry.


There’s no shortage of consumers and companies rocked by COVID-19. The speed and degree with which this has touched every entity in our country are unlike anything any of us have ever seen. Although this period has been filled with moments of sadness, loss, fear, confusion, uncertainty, and anxiety, many companies have led the charge to make sure their employees and customers are cared for by finding ways to adapt and thrive despite these unforeseen circumstances.


The Big Picture

In collections and recovery, we are no strangers to helping consumers when they’re going through difficult times. However, this cycle is different. The sheer volume of consumers that will suddenly be faced with short and long term unemployment is staggering. TransUnion recently published in their COVID-19 Pandemic’s Financial Impact on U.S. Consumers report that 61% of consumers surveyed indicated their household income has been impacted. The report also says that the hardest-hit states in the West are California (68%), Washington (70%) and Nevada (77%). In the Northeast, New York comes in at 67% and notably, in the south, Louisianna is an outlier at 71%. Of these, 8% believe this will impact them in the future and 14% are unsure what the future holds.

Short and Long Term Impacts

Taking this data into account, many collection leaders are re-forecasting delinquency and losses in a world of firsts and with a lot of unanswered questions. How long will jobs be affected in the short-term? How many will be affected indefinitely due to companies' inability to survive or remain viable during this time? TransUnion reports that 66% of consumers are concerned about their ability to pay current bills, with the highest concern being their ability to repay credit cards, utilities, mortgage payments (this percentage is higher for those with children) and rent.

The Industry Response

As many of us know, when delinquency and losses rise, especially at this speed and to this degree, companies have to make significant strategic decisions. Based on conversations with leaders and a look at various forecasts, I predict the first light wave of delinquent and impacted customers will flow through to charge-off beginning in September. This is significant because you will have pandemic-related delinquency in every single bucket, on top of the pre-COVID-19 delinquency that already existed and has likely only gotten riskier.  Companies will need to take immediate action to be prepared for when peak pre and post-charge-off delinquency levels hit the system. Here’s what I anticipate to be the top collection strategy priorities for the remainder of the year:

Immediate Considerations

whitepaper recently published by the team at Boston Consulting Group and 2nd Order Solutions offers several solid suggestions and considerations for the immediate term: reallocate any underutilized staff, prepare for the reality of reduced outbound calling, clarify roles -- especially among decision-makers -- to ensure quicker deployment of desired changes, increase non-phone outreach (letters, SMS, etc.), and proactively design offers to help consumers through the immediate decline in their ability to pay.

Long Term Considerations

Many collection strategy execs are hustling through an exercise to size increased delinquency, re-forecast expenses and do their best at estimating future losses. While all leaders are trying to figure out the impacts, conscientious leaders are also working on the other side of the equation and determining how to offset all of those impacts. After all, that’s what collection strategy professionals get paid to do. 

After companies have pulled out all of the stops to help customers, it will be time to buckle down and design the plan for what’s to come. I break this down into three categories 1) capacity 2) expense reduction (to offset the increased delinquency costs) and 3) loss mitigation.


After forecasting the future demand, a solid and well-thought-out capacity plan will be essential. Considerations need to include the future insource/outsource allocations, as well as the viability of other traditional post-charge-off streams; debt sales (lower price due to higher available volume), legal referral, internal and agency. Any companies that haven’t outsourced before should seriously consider this as part of their ongoing strategy. As with every delinquency bubble, there will be an initial first-party peak starting anywhere from July - September (depending on loan terms) and lasting for the unforeseeable future. After that, we’ll slowly start to see a decline as consumers purge through (brace yourselves third party). Flexibility in staffing will be the most cost-effective and streamlined way to adjust month to month. 

Expense/Loss Mitigation

Increasing staff due to higher demands will inevitability increase the cost to collect. The smartest way to offset this increased need in staffing is to look for ways to fully deploy any and all self-service options available to you.

  1. SMS and Email - If you haven’t already done so, you should accelerate the adoption of SMS and email. They are easy to stand-up and well-tested in the industry.
  2. Self-Service Web Portal - In an environment where consumer education and the need to reduce capacity demands are top priority, a self-service web portal is a no-brainer. It can serve as a centralized place to educate consumers on their options, as well as help them to guide themselves through negotiations; payments, payment plans, settlements, etc. This will significantly streamline the process for consumers and will help alleviate some of the capacity constraints and expenses for lenders. When sourcing a solution, finding one that allows for the greatest amount of customization is your best bet. You’ll want the flexibility to modify the decision engine and models behind the portal as frequently as you need to given the uncertainty surrounding this ever-changing crisis. 
  3. Virtual agents should come to the forefront. This technology has been tested throughout the industry and I believe COVID-19 will be a catalyst for further adoption. 


This will be a long and challenging time for many consumers. But we’re built for this and are best positioned to help them as they navigate this unknown territory. Many for the first time. This is a starting, high-level list based on what we know now, but the number of solutions and levers is unlimited and will be ever-changing and evolving as we learn more. While I’ve cited some solutions requiring initial investment, I’m confident 1) the right solutions will pay you back and 2) there are a lot of levers that do not require an investment that can be pulled immediately. We’ll talk about those and others as we work to keep you informed.

Want to learn more?

Join me on the first of our new Webinar Series: Leading Strategically Through the Recovery: The Industry Outlook, TOMORROW, April 22nd at 1 PM EDT, sponsored by LiveVox 

Then plan to attend our upcoming iAST - Strategy and Tech Digital Conference July 21-23, 2020.


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The iA Innovation Council is a collaborative working group of product, tech, strategy, and operations thought leaders at the forefront of analytics, communications, payments, and compliance technology. Group members meet in person (and lately, virtually) several times each year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit and establish guardrails for new technology, and educators, entrepreneurs and innovators from outside the industry who inspire different thinking. 

2020 members include:

Absolute Resolutions Corp.

AllianceOne Receivables Management


Arvest Bank



Beyond Investments

Billing Tree


Capital Collection Management

Citizens Bank

Crown Asset Management

CSS Impact

Dial Connection


Enhanced Recovery Company

Exeter Finance


Firstsource Advantage

Frost-Arnett Company

Healthcare Revenue Recovery Group

Hunter Warfield 






NCB Management Services


Ontario Systems


Performant Corp.

Phillips & Cohen

Professional Finance Company

Radius Global Solutions





Spring Oaks Capital

State Collection Service


The CMI Group



Unifund CCR

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