In collections, authentication equals friction.

We’re asking customers to give us their private information, like their date of birth and the last four digits of their social security number before they even know who we are. Over the phone, the process is ripe with potential customer and agent frustration. Web portals can cause friction, too, with poorly designed processes that don't reflect the shift to digital seen in financial services and e-commerce.

There’s been resistance to changing the industry authenticates customers because of the major risk of third party disclosure. But, according to InDebted’s Chief Customer Officer (and champion of frictionless collections) Tim Collins, there are several new-to-collections technologies that can help reduce friction and third-party disclosure risk.

1. Email Authentication

Think about how you communicate with your bank. Do you provide your date of birth and Social Security number every time you access it or call? Do you even provide those data points the first time you log in or speak with someone?

My guess is no.

Why, then, should your customers’ experience be any different?

As digital banking and digital collections become the norm, it should become more acceptable to use email as a point of authentication over the phone, and, taking this a step further, sending the customer an email during authentication. The customer opens the email, clicks “confirm” and then handles their business. This has been standard in e-commerce for years.

Remember, email addresses do not get reassigned, and there are services that can tell you who owns a particular email address.

2. Text Authentication

Many of the steps to text authentication are similar to email authentication, but this one is easier because you already have the customer’s phone number, and because consumers can port their cell phone numbers to new carriers, and we now have the ability to check for reassigned phone numbers via the FCC’s Reassigned Numbers Database, it’s easy to be sure you have the right number.

In this case, all you need to do is ask for consent to send a confirmation text, and then ask the customer to respond on the phone with the code, or better yet, type back a keyword/number like date of birth to verify they have the phone and who they are.

Again, there are examples of this method of authentication being used in financial services, from community banks to e-commerce. Allowing text authentication is key to keeping up to the digital banking and collections shift.

3. Voice Authentication

This technology has been around for a while, but it is being increasingly employed by financial services companies. It doesn’t solve authentication problems on web portals, or on the first call, but it does make subsequent phone calls with a specific customer easier. After confirming the identity of the customer on the first call, the customer is asked if their voice can be used to authenticate them in the future. If they say yes, on the next call, a computer confirms their voiceprint, and that’s it. This saves agent time and decreases the chances of customers getting frustrated and hanging up.

It’s time to remove the friction from customer authentication by implementing one or more of these authentication methods.


Erin Kerr is the Director of Content at insideARM and the chair of iA Strategy & Tech - a digital resource for collections strategy executives.

Tim Collins is the Chief Customer Officer at InDebted.

InDebted is a member of the iA Innovation Council. The Innovation Council is a membership group for organizations that understand their future depends on thinking differently and being at the forefront of communications, analytics, payments, and compliance technology. Together, we envision the future and then map how to get there.

Next Article: Denise Tobin, Director of Business Development at ...