Upscaled, an Australian-owned consultancy firm specialising in profitable growth strategies, recently conducted a highly successful transformation program with Prospa, a leading Financial Services provider, to enhance its collections effectiveness, drive financial outcomes and better support its customers experiencing financial difficulties.
Upscaled was able to identify several pathways to better collections efficiency and effectiveness, and then orchestrate and support a series of refinements to the collections process.
With the guidance of renowned industry expert Jeff Mclean, Upscaled successfully redefined their collections operations with technology led solutions and delivered profitable results.
Collections Are No Easy Matter
Upscaled identified that Prospa had issues across technology, people and processes.
The company was collecting less than five percent of monthly payments via automated technologies, had limited best practice departmental leadership and collections specialists in house, and inadequate legal provider performance and processes. Upscaled tacked these challenges by focusing on three “pillars” where there was the strongest opportunity to enhance efficiencies:
Pillar 1: Automated Collections
There was an opportunity to significantly boost the amount of money collected by automated collections, well beyond thae initial five per cent. To achieve this, Upscaled initiated convenient payment options and improved the process further by:
Implementing a 24/7 IVR system for anytime arrears payments. This allowed customers to pay via an automated phone-based gateway anywhere, anytime.
Deploying an Agent Assist product for real-time payments, reducing the fund clearance time from several days to instant clearance.
Developing in-app notifications for arrears customers with a link to the Prospa payment gateway, allowing customers to be aware of and make good on their overdues in real time.
Pillar 2: Talent Shortage
The talent shortage in the collections space in Australia, was exasperated thanks to limited best practice departmental leadership.
To address this challenge, Upscaled recommended:
Procuring an offshore BPO partner with specific AU collections experience. This partner was then able to provide resourcing on evenings and weekends when customers were wanting to engage.
Recruiting a new Head of Collections. This new executive was then guided by leadership coaching from Upscaled’s Jeff Mclean, to rapidly bring them up to speed with market best practice knowledge.
Pillar 3: The Legal Team
Upscaled also identified that inadequate performance and processes by the legal provider was increasing costs spent on legals and generating below par results. Upscaled’s recommendation was to procure new legal partners who had better terms, costs and processes, and were specialists in B2B recoveries.
Delivering Instant Results
This strategically targeted approach to addressing the collections issue yielded results quickly for Prospa.
As noted by Margot Birbeck, Prospa Executive GM of Operations: “Upscaled’s approach, coupled with their change management expertise, has led to the successful transformation of our collections operations. The engagement has been a resounding success, exemplifying our commitment to excellence.”
Key benefits from the transformed approach to collections have, to date, included:
The ability to run extended operating hours, reduced operating costs & enhanced leadership capabilities.
The improvement in payment options and improving funds collection resulted in $1 million worth of automated peopleless cash collections per month.
An enhanced legal collections process, with a 38% improvement in cost per file.
However, above and beyond the benefits to its own operations, Prospa has been able to become an even better partner for its customers.
Helping SMB Aussie Battlers
Upscaled also identified that the existing financial hardship program in place needed improvements so that it could benefit both customers and the Prospa business. The team determined that there were some updates required to ensure that this hardship program was adhering to best practices when dealing with customers facing genuine financial hardship.
The objective was to provide tailored solutions that would enable these customers to meet their contractual obligations effectively.
As part of its strategic engagement with Upscaled, Prospa sought external support to enhance this program.
Ultimately, the scope of the optimisation included:
Enhanced Contract Options: Offering customers the ability to apply for an extended contract with reduced payments based on their current Statement of Financial Position (SOFP).
Streamlined SOFP Assessment: Continuing to issue SOFPs as per Prospa’s current approved process but streamlining the assessment according to the existing approved process.
Flexible Contract Terms: Allowing customers to modify the length of their contract based on their payment history and financial position.
With these objectives in mind, Upscaled designed and delivered a solution that achieved:
Enhanced Customer Support: Customers facing genuine financial hardship received additional tailored solutions, aligning payment schedules with their current financial situation.
Optimised Cash Flows: The program improved cash flows by offering flexible payment options, ensuring better financial outcomes for both Prospa and its customers.
Minimised Losses: By refining the program, Prospa reduced losses and debt sales associated with customers genuinely willing to meet their obligations.
Adaptability in Collections: Customers who did not adhere to their amended payment schedule would then follow the standard collections process, ensuring compliance and accountability.
Strategic Transformation
As Ross Aucutt, Prospa CFO, said, the engagement with Upscaled has helped the company to redefine not only its collections process, but its ability to support its core customers in the sometimes-struggling SMB space.
“Working alongside Upscaled with their expert guidance we have seen a significant uplift in our cash collected. This has improved our financial performance. The partnership has been a significant value driver for Prospa,” Aucutt said.