Close to half a billion people around the world were infected by the Spanish flu back in 1918. This pandemic lasted for about two years, claiming close to fifty million people. Within ten decades, the world has seen the next big pandemic, COVID-19, affecting 375 million people and killing more than five million lives all around the world. Compared to the past, there were many advancements in technology and science. However, the way this pandemic has impacted lives is remarkably similar and analysts have their own predictions comparing the current to the one back in 1918.
Rapid Recovery
The economic impact the pandemic caused may recover faster, similar to the way it did in 1923 when unemployment was less than 4%. High usage of electric power and automobile manufacturing lead to a rapid growth and faster recovery. Coming out of the pandemic, both Ford and General Motors had massive success with their launch of new cars and subsequently reviving the economy by bringing back jobs. The pre-pandemic December 2019 unemployment rate in the United States was 3.6%, later rising to the high of 14.7% in April 2020. It was corrected within a brief period of 18 months, however, bringing it back down to the pre-pandemic period of as low as 3.9% in December 2021. In essence, the recovery seems to be much more rapid than expected.
Debt Recovery for Building Economy
Though we are seeing a positive sign of economic recuperation, it’s not all positive for every industry, particularly the ones that are highly affected during the pandemic considering the higher probability of default: airlines, food, entertainment, and travel. There was a massive displacement of labor from these industries, leaving a sizeable labor shortage and industries struggling to survive with little hope of bouncing back when the economy climbs back. As the economy was getting ready to recover in August 2021, close to 4.3 million people quit their jobs, leading to what analysts called, “The Great Resignation.” This phenomenon is continuing today, leaving employers worrying and struggling to find new talents to run their day-to-day operations. As the economy soars, there will be more opportunities for organizations actively participating in revenue cycle and accounts receivable, but finding employees is continuing to be a struggle. According to the EY’s report, the debt collected by third-party debt collection agencies in 2016 was $78.547 million. Industry experts and financial analysts are predicting the recovery in 2022 will be more than $120 million.
Collection Goes Digital
With increasing digital collection strategy in place and the rise of self-service channels, consumers now have more ways to connect with a debt collector to take care of their outstanding debt. With highly flexible payment options available, consumers will likely take advantage of the digital channels and get their accounts resolved through text and chat without even picking up the phone. With more AI-powered tools and automation in place, consumers gain more control over their debt settlement, further enhancing the recovery percentage. From a single channel of communication, agencies now have multi and omni-channel communication to connect with the consumers and provide the same experience they expected from their creditors, making the collection process seamless. Furthermore, if a consumer decides to make any changes to the payment arrangements, all could be achieved without talking to a live person.
Technology Enabled Consumer-Centric Collections
With such a rise of technological advancements, we are expecting a complete revamp of the entire collection process. Technology appears to be the center piece driving this massive revolution among the collection industry. Leaders are excited to embrace this rise of technology and are looking forward to being at the forefront, leading the change in both consumer and commercial collections. With software being available as a service (SaaS), technology has already created a level playing field for agencies of all sizes to take advantage of this growing techno-ecosystem and scale. The low-code, no-code solutions, including robotic process automation, can bring the power of automation for collection agencies to rapidly implement and automate non-revenue generating processes such as debt loading, data scrubbing, reporting, invoicing, filing, and dispute management. Agents can instead focus on what they do best and increase the recovery percentage by servicing more consumers every day.