Social Media in the Debt Collection Industry

If you can communicate, you can collect DEBT COLLECTION 101 If you can communicate, you can collect If you can't … outsource

“Call centres will disappear within the next 24 months” MANY OPINIONS “Call centres will disappear within the next 24 months” “All call centre agents will be replaced with software communicating with debtors via social media platforms”

WHAT IS SOCIAL MEDIA? Social media is the collective of online communications channels dedicated to community-based input, interaction, content-sharing and collaboration. Let’s just call it IM

Most popular global mobile messenger apps as of January 2018 IS IT POPULAR? Most popular global mobile messenger apps as of January 2018

Number of mobile phone messaging app users worldwide from 2016 to 2021 WHERE IS THIS GOING? Number of mobile phone messaging app users worldwide from 2016 to 2021

24 million credit active consumers BACK TO OUR WORLD 18 months ago 24 million credit active consumers Outstanding credit balances = R1.6 trillion Impaired accounts = 20 million 53% of consumers with debt = 31-45 More than half of consumers use 75% of their salaries to repay debt

Statistics of civil cases for debt, November 2017: STATS SA Statistics of civil cases for debt, November 2017: Number of civil summonses issued for debt 54 899 Number of civil judgements recorded for debt 20 687

THE REAL WORLD Municipalities: 0.8% of book per month Non-paying culture

DIFFERENCE BETWEEN SMS AND IM SMS developed for cellular phones as an alternative to calling IM developed for use in personal computers over Internet SMS sent at a cost per message IM usually costs only data usage SMS often limited to country’s borders IM not limited to a country

BUT … WHAT IS THE PURPOSE OF THE TECH? IM is a bi-directional interaction Requires that both communicators are willing participants One can block or report the other and exit (avoid) the discussion

SMS is a one-directional interaction with reply functionality WHEREAS … SMS is a one-directional interaction with reply functionality Push-communication

The Business Day, 12 September 2017 THE SOUTH AFRICAN DEBTOR “Credit extension is growing faster than job creation, and the moribund economy cannot carry that burden forever” The Business Day, 12 September 2017 2014-15 World Bank Report: South Africans = world’s "biggest borrowers“ South Africans are failing to manage their debt responsibly Some credit providers missing the mark re criteria in affordability assessments Credit use is outpacing employment growth Over-indebted gap is widening 2 out of 5 consumers have impaired records Credit facilities = 65% of credit accounts and Unsecured credit = 14.6%

THE SOUTH AFRICAN DEBTOR “Officially, two out of five consumers are credit-stressed, and unofficially, the picture is much worse.” Almost half the debtors contacted by a number of sample firms using our software are unwilling participants to the discussion

DIFFERENT STRATEGIES For the willing participants IM For the unwilling participants Phone, SMS, e-Mail, etc

Learn to accurately split your book before you use social media GOOD TECH, BUT … Learn to accurately split your book before you use social media

THAT’S ALL FOLKS Thank you