A collection message is a text or a script that has the goal to provide information to the customer, even before the due date – reminding them how to pay and the positive benefits of paying on time. It is normally sent via email, WhatsApp, or SMS.

Collections messages are more effective when they are made politely, demonstrating that the bank is in control of the situation. Any collection message must take into consideration all the terms of the transaction, ensuring that it is consistent and cannot be questioned.

When dealing with cases overdue by seven days, it is important to understand the reason there was no repayment (and the customer’s repayment history) to make the collection more effective. If the bank wants to be successful, it must have alternative repayment options it can offer.

There are three types of collection messages, each with their own characteristics:

  • Before the due date;
  • On the due date;
  • After the due date.

Before the Due Date

When sending a message before the repayment due date, try not to be explicit on the goal to remember the repayment. Use the opportunity to ask how the product or service provided by the bank is performing. Try to engage with the customer in a way that it is perceived that you care, such as “How do you find our service?” or “Is everything working as expected when dealing with us?” and, at the end, subtly remind about the repayment to be made. Finish the message by saying that if there is any issue or problem when performing the repayment, to contact the bank for help, providing the various ways to do so.

Such an approach gives a great opportunity to engage with the customer, and even if they respond negatively, it can be a precious source of feedback for customer service improvements. If the bank provides prompt feedback for any negative or positive feedback, they will strengthen the relationship. It can also be a good source to predict potential delinquencies, depending on how the customer reacts.

On the Due Date

A message on the day of repayment requires a few precautions. It is not possible to know when, during the day, customers will make the repayment if it is not an automated recurring repayment.

As banks know important days for the customer, especially their birthdays, they should avoid sending collection messages on such dates. As mentioned before, try to use the customer’s preferred channel.

Banks should avoid sending any message at weekends as it is less effective and may get lost among the various messages requiring action on Monday morning.

The message should be concise, offering help, links and information that will make the repayment easier. For example, “Today is the day of your loan repayment, in order to help you click on the link below to give all the needed information and ways of repayment, any issue, contact us.”

If the repayment is made on time, the bank should send a ‘thank you’ message that thanks the customer for prompt repayment, encouraging this behaviour.

After the Due Date

If payment is late, the first contact must be through an instant channel, such as email, SMS, or WhatsApp.

By using one of these channels, the bank is making it much less embarrassing for the customer than receiving a telephone call, as often the late repayment is because of a temporary situation, or forgetfulness.

The message must be short and written formally, but respecting the tone of voice appropriate to that customer segment, as it would be unfortunate to destroy months of empathy and rapport-building, and it’s better to keep the relationship developing.

If this first contact has no response, use the same channels for the next contact, but do not immediately escalate to telephone contact. The approach will be different, by questioning the reason for non-repayment and reminding the customer that their bank is open to listening and to help them repay.

The bank employee receiving a response from the customer via WhatsApp, email, SMS, or telephone must be able to answer any question regarding the contact promptly, and not delay or postpone for any reason.

At this stage, the bank must be ready to provide alternative solutions that are acceptable to the customer.

If, after a reasonable amount of time, the bank does not have any response to the second message, it is time to contact using the telephone. The telephone collection approach must follow the same tactics used in the other channels. Be firm, polite, use the customer tone of voice, be prepared to answer any question immediately, and have acceptable alternatives to facilitate the repayment.

If nothing works, financial institutions will normally pass the collection to a collection agency. At this stage, the bank’s relationship with the customer is probably terminated.