This article is part of an ongoing Think Differently series, launched in October 2019. Written by members of the iA Innovation Council, the series showcases thought leadership in analytics, communications, payments, and compliance technology for the accounts receivable management industry.


In a recent ARM-U presentation, “Digitizing Your Collections”, guest speaker Frédéric Jacques, a business analyst specializing in financial services, presented industry stats on the use and impacts of digital channels in ARM.

One of the most impactful findings from his presentation was that 58% of debtors contacted via SMS resulted in partial payment of their delinquent account while 19% resulted in full payment.

This is no surprise as SMS is one of the fastest-growing channels among consumers and businesses in 2019 and into 2020. Here are a few industry stats highlighting the impact of SMS:

  • SMS open rates beat the open rate of emails nearly 5X over: 90% vs 20% (VoiceSage).
  • It takes the average person 90 seconds to respond to a text message (GSMA).
  • 75% of people wouldn’t mind receiving an SMS text message from a brand (after opt-in) (Digital Marketing Magazine).

But First…. Compliance

For highly regulated industries such as financial services, the question first is often not “How can I incorporate new channels?” but “Am I okay to incorporate new channels?” To help answer both questions, here are key components of embedding compliance into your SMS approach followed by top ways to leverage SMS today.

To build your SMS messaging database, you must first get consent to engage with a consumer. To do so, you need to ask their permission. Obtaining consent for the initial touchpoint is critical, but it must be an ongoing affirmation, because brand-to-consumer SMS messaging is protected by the same regulations as calls to cell phones.

Just like there are rules about how you can place calls to cell phones, the TCPA (Telephone Consumer Protection Act) governs text messages, too. In broad strokes, the TCPA states that organizations must obtain written, explicit consent from the consumer before contact can be made on a mobile channel. 

Accordingly, it's crucial that you are prepared to do the following:

  • Acquire the consumer’s express written consent to receive messages via SMS. Written permission may include electronic or digital forms of signature (such as a website form, text message, or email confirmation).
  • Maintain a record of each customer’s consent.
  • Disclose useful information and opt-out instructions.
  • Offer the ability to revoke consent and opt-out at any time (e.g., a keyword such as STOP.)

Top 5 Ways to Leverage SMS Today

With a compliance-focused mindset, there are many ways to incorporate SMS into your workflows that vary by business needs and requirements. Here are the top 5 ways SMS is being used today:

1. Two-way communication

Today’s consumer sees their SMS application as a means to communicate, not just receive information. Enabling the ability for your business to not only send a text but respond to an incoming text is a material opportunity to drive a connection to a result-driven conversation.

2. Personalized Offerings

Studies show that consumers are actually willing to provide more information if they know they will receive a more customized experience. Providing consumers with information that can help them create their personalized program will help engage and drive conversation to a more meaningful talk-off.

3. Payment Reminders, Account Alerts, and Payment Portals

Automatic text reminders can help reduce delinquency risk and encourage customers to bring accounts up to date. 85% of texts are opened within 5 minutes of receiving them, which means you can increase the number of consumers contacted per minute. Additionally, you can accelerate your self-service flow by inserting a direct link to a payment portal via SMS.

4. Omnichannel Compliance

To build your SMS messaging database, you first need consent to engage with a consumer. To do so, you essentially need to ask permission from the consumer on another channel. Built-in SMS consent mechanisms can help you maintain consent across all digital channels.

5. IVR Alternative

You can leverage SMS as an alternative to waiting in line. Unlike voice communication where the service ratio is 1 to 1, SMS allows agents to handle multiple interactions at once, increasing the chance of faster service times for the consumer.

How consumers engage with each other and with businesses is changing. Businesses that hope to remain effective must also rethink how they will navigate this new era. While voice communication may remain dominant for many years, SMS is quickly becoming the place where most conversations occur.

As you enter the new year, 1) spend time learning about technology that can help simplify multichannel compliance and 2) test new ways to generate conversations where they are happening already.

As regulatory developments are expected to bring greater clarity on the use of new channels, businesses will no doubt seize the opportunity to digitize their engagement. Invest now to be at the forefront tomorrow.







About the iA Innovation Council

The iA Innovation Council is a collaborative working group of product, tech, strategy, and operations thought leaders at the forefront of analytics, communications, payments, and compliance technology. Group members meet in person several times each year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit and establish guardrails for new technology, and educators, entrepreneurs and innovators from outside the industry who inspire different thinking. 

Learn more at

2019 members include:

Activate Financial
Ballard Spahr
BCA Financial Services
Beyond Investments
Billing Tree
Citizens Bank
Clark Hill
Coast Professional
Convergent Outsourcing
Crown Asset Management
CSS Impact
DCM Services
Enhanced Recovery Company
First Collection Services
Firstsource Advantage
Frost-Arnett Company
GM Financial
Healthcare Revenue Recovery
Hunter Warfield
Moss & Barnett
National Recoveries
NCB Management Services
Ontario Systems
Performant Financial Corp.
Phillips & Cohen Assoc.
PRA Group
Radius Global Solutions
Spring Oaks Capital
State Collection Service
The CCS Companies
The CMI Group
Unifund CCR
Vital Solutions
Windham Professionals
W.S. Badcock Corporation


Next Article: Settlement Reveals How Expensive the TCPA is ...