By: David Knowles, President, TriVerity, a Velera company 

As the economic landscape continues to shift in 2025 — impacted by inflation, high interest rates and the uncertainty around upcoming changes due to the new administration — first-party collections face new challenges. As these challenges mount, the financial pressures on consumers are reflected in the data, with overall U.S. household debt increasing by 4.3% year over year in 2024. 

Technology will play a critical role in responding to rising consumer debt, helping to drive efficiency, improve recovery rates and ensure compliance in an increasingly complex regulatory environment. A study by Nuance found that 67% of respondents favored self-service over speaking to a representative, and 40% had first attempted using available self-service options before reaching out for help. This is particularly reflective of younger generations such as Millennials and Gen Z.

In addition to self-service, options across online, social media and private messaging continue to be preferred methods of contact for consumers. According to Verint’s 2024 Digital Customer Experience Report, 72% of participants interacted with online, social media or private messaging. Given these preferences, it is strategically advantageous for credit unions to stay at the forefront of consumer expectations by building on self-service, automation and digital investments. 

Remaining innovative and staying abreast of new technologies to enhance debt recovery solutions is critical for a credit union’s financial success and ultimately, for the financial health of their members. As your credit union considers various technology for 2025 initiatives, here are four key components to consider:

• Automation and self-service tools – Automating processes around payment portals, reminders and interactive voice response (IVR) systems streamlines collections, reduces costs and increases debtor satisfaction by allowing them to manage payments on their own schedule. By embracing these tools, credit unions can meet consumer expectations, increase efficiency and improve recovery outcomes. 
   
• Omni-channel communication in collections – Utilize multi-channel communication, including SMS, email and chatbots, to reach debtors more effectively. People are more likely to respond when messages are reinforced across different channels, making it easier for them to stay engaged and on top of their delinquency obligations. McKinsey research echoes this with a 15% to 35% rise in customer engagement rates for businesses using omni-channel strategies. 
   
• Compliance and regulations – Ensure that compliance standards are being met with each implementation of new technology or process improvement. For example, if the credit union is implementing text reminders to borrowers, the text workflow has compliance requirements for abiding by federal and state regulations and standards for protection against potential complaints and lawsuits. 
   
• Cybersecurity — As technology advances, enhance both cybersecurity and risk mitigation policies in parallel for protection. Fraudsters continue to evolve their methods to hack into data warehouses and obtain members’ classified information.

Streamlining debt recovery and staying at the forefront of innovative technology and digital solution enhancements is not only in the best interest of credit unions, but also for their members. It is crucial to keep this in mind when allocating resources for 2025 and beyond. 

If your credit union is exploring ways to streamline collections through automation and digital solutions, consider outsourcing to a trusted first-and third-party collection partner, like TriVerity, to help. By allowing a specialized vendor to manage your collections, your credit union can stay at the forefront of the latest technology, assured that critical elements like security, compliance and management of your credit union’s reputation are in expert hands. 

David Knowles is the President of TriVerity, a Velera company. He oversees the delivery of services, contracting, digital integration, marketing, IT, support and more within TriVerity. He additionally leads disputes and operations for Velera. David holds more than 20 years of experience in the financial services and consulting industries, starting his career in collections and holding positions across advisory consulting and multinational banking functions in the United States, Bermuda, Latin America and Europe.