BEYOND TECH TRENDS: PART I
Getting down to the crux of the matter.
With 2023 already in full swing, there are swathes of articles on tech trends for 2023 and what 2023 may have in store for all of us. As if everyone has crystal balls at the ready. These articles are, for the most part, enlightening and offer an overly broad account of what is currently on offer, what is the topic of conversation and what the new rising star on everyone’s collective radar is.
And these articles serve a purpose. Undoubtedly.
We would know, we have written our own articles on tech trends which you can read here and here. In fact, so serious are we about keeping up to date with tech trends, that we wrote an entire series dedicated to all the cool tech kids on the block – a 7 part tech series where we discussed Cybersecurity, Digital Identities, Digital Signatures, Document Automation, Smart Contracts & Blockchain, AI & Chatbots as well as Hyper-automation and Platformisation.
These articles are all designed to give a broad overview to users of legal tech and can be extremely useful when looking at your practice holistically.
Which is why we thought we would dig down a little deeper, looking at specific departments and how tech trends currently in vogue can help each department.
Consumers are in debt.
According to a CNBC article published in November 2022 –
“Households increased debt at the fastest pace in 15 years due to hefty increases in credit card usage and mortgage balances.”
Locally and according to a Citypress article also published in November 2022 –
“The average consumer now has 26% more unsecured debt, such as credit card accounts, personal loans and overdraft facilities, than they did six years ago.”
And both articles were published before the December festive season and seasonal spending that goes with it. One shudders to think how much debt the post-Christmas spend will add up to. It’s a sad situation because debt begets more debt which begets more debt – a seemingly never-ending spiral into financial oblivion.
Sure, that is quite obviously (and intentionally) doom and gloom, but unfortunately, it happens to be the reality for many people around the world. And with that bombshell it makes sense that the debt collection departments in law firms and debt collection services globally will have a booming business.
What’s that saying “one man’s loss becomes another man’s gain”?
And with this beckoning boom comes a quandary. How will those working within a collections department or a collections service cope with the influx of work that naturally follows an increase in spend and associated debt?
But let’s pause just for a minute because before diving into what could help improve the collections process, it’s worth noting one obvious fact. The world has become smaller. Why is this important? Well, for starters, consumers (and society in general) have embraced the digital and technological revolution we find ourselves in – yes, we are in that revolution right now. Which means that the majority of people on planet Earth live on their Smartphones.
Whether it’s downloading the latest catchy tune, reading the latest piece of news, checking out the weather for the day or loadshedding schedule (for those in South Africa), chatting to their mates who have immigrated across the globe, attending to online banking and (now at least) paying off their debt.
Everything has become centralized on one small piece of tech. Making the consolidation and payment of debt the newest “ugly duckling” just waiting for its swan moment.
Every single person with a smart phone or access to Wi-Fi can chat to a consumer helpline 24/7. Anywhere on the globe. This is facilitated by means of chatbots – the latest of which has proven to be quite the controversial talking point – the ChaptGPT. This chat bot released by OpenAI, drew over 1 million users almost instantaneously after its launch in November 2022.
On top of that, consumers are able to download an app to facilitate the payment of debt in a type of DIY application – doing away with the perceived stigma that dealing with a collections agency or law firm, usually holds. In fact according to the UK founded collections software provider Exus –
“with the proliferation of smartphones and the app-based finance culture catalyzed, as a result, most millennials don’t simply see self-service smartphone solutions as a nifty gimmick but as a necessity. They expect mobile interfaces to be a part of the collections process and they expect AI to be applied to it in order to make everything run more smoothly. This is the generation of the collaborative consumer and they are a generation that demands a certain level of customer service alongside their digital conveniences.
Today’s debtors want to be able to help themselves using self-service collections tools that are both web-based and app-based and are based around the same centralized system. Through this service, they will be able to find information on their various debts, propose solutions, and, of course, sort payments at their 24/7 convenience in a format that gives them complete control.”
Offering an online or app based payment tool seems to be the next step in the collections game providing those in the process an advantage – the ability to deliver results more efficiently and in a way that is easy and smooth for all those concerned.
This self-help attitude is echoed by the Capital Recovery Corporation, who have also said that –
“Offering mobile payment apps for your debt collections is worth pursuing additional ways to collect the debts promptly. As digital natives, millennials are well-versed in using online platforms like PayPal, Venmo, Apple Pay, and Google Pay. A natural apprehension towards adding credit card information online or even the use of authenticated accounts makes collecting payment more difficult. By adding additional ways to collect a payment, you can increase the likelihood of recovering debt more efficiently.”
It’s obvious after reading the information above that providing online and app options allows for ease of payment for both debtor and collector. Providing a less humiliating process for the person paying the debt and a more efficient one for those collecting on it.
App’s like leadsquared, ACE by Interprose, Simplicity Collect, Exus and AJS (with our own division completely dedicated to bulk collections as part of our C3 Call Centre management software) are software providers you can look to for support on digitizing your collections practice. Especially as all those providers mentioned keep abreast of emerging trends. Which would be ideal.
In that same vein, by having the collections process automated (and therefore properly managed from a compliance perspective), entails (by inference) ensuring that how you collect debt conforms to compliance regulations worldwide.
Which brings us to our second topic of discussion…
Often considered to be the bane of our collective existence – simply because of the multitude of hoops one must jump through to ensure compliance with regulations – compliance is not a topic we approach with measurable enthusiasm. But it’s one that needs attention.
According to Biztrends article titled BizTrends2023: Say goodbye to the one-trick pony | Law trends 2023 –
“Appropriately managing regulatory frameworks and maintaining legal compliance is becoming a significant requirement..”
And it’s not a mystery as to why – there is a multitude of Act’s to comply with.
Whether it’s the law firm itself or the law firm ensuring compliance on behalf of its client, South Africa has a number of its own Act’s which require attention –
1. The Financial Centre Intelligence Act 38 of 2001 (and its associated amendment) – is South Africa’s anti-money laundering and counter-terrorism financing legislation, which is based on international standards. It applies to all “accountable institutions”, including attorneys, trustees, and executors (amongst others). Part of the FICA Amendment which came into effect on 2 October 2017 includes the requirement of getting to know your client (KYC). The KYC process entails determining (before commencing any business dealings) whether “there are specific money laundering or terrorist financing risks associated with new client relationships” (MacRobert Attorneys).
2. Protection of Personal Information Act 4 OF 2013 (POPI) – which will be mandatory for most organizations within South Africa came into effect on 1 July 2020, giving organizations a grace period of one year to ensure that they are fully compliant with POPIA. According to Cliffe Dekker Hofmeyer (CDH) – “Companies must ensure that their business practices and the way they Interact with customers, clients or consumers adhere to the requisite privacy laws, as well as confirming that the way they collect, store or process their employees’ information aligns with the protections set out in POPIA”. CDH has also set out a convenient checklist for businesses to follow to ensure they are following and are aligned with POPIA.
But, there are additional compliance regulations that will need to be followed, especially if a law firm or company does business across various jurisdictions (most notably the European Union) –
3. The Payment Card Industry Data Security Standard (PCI DSS) is a set of written standards, developed by major card brands (like VISA and Mastercard) and maintained by the Payment Card Industry Security Standards Council (PCI SSC).PCI SSC is a global forum that brings together payments industry stakeholders to develop and drive adoption of data security standards and resources for safe payments worldwide(PCI Security Standards). The PCI DSS contain technical requirements which protect and secure payment card data during processing, handling, storage, and transmission. All businesses that handle payment card data must follow these requirements and be PCI compliant. This helps ensure that data is protected avoiding costly data breaches” (Magix). This is a hefty compliance tick box that needs to be taken cognizance of and further research is advised into its reach (and possible fines for non-compliance) is highly recommended.
4. The European Union’s General Data Protection Regulation (GDPR) – is by its own admission – the toughest privacy and security law in the world, and imposes obligations on organizations around the world, when targeting or collecting data related to people in the EU. The GDPR will levy harsh fines against those who violate its privacy and security standards, with penalties reaching into the tens of millions of euros. Compliance with its vast amount of new requirements for organizations around the world is crucial for any business conducting affairs within the EU or law firms advising such businesses. With the advent of remote working or hybrid systems, data protection has become paramount. A data breach that exposes personal data a company is charged to protect due to slip ups by a company’s employees must be avoided. Because the result of such data breach is the undermining of consumer confidence in your company as well as costly GDPR fines. We strongly advise further investigation into the reach the GDPR may have on your practice or business.
5. European Whistleblower Directive – was enacted to ensure greater protections for whistleblowers by shielding them from retaliation and creating “safe channels” to report violations of the law. All 27 EU member countries had to transpose the directive into their national law by December 2021. However, EU states have been encouraged to enact greater whistleblower protections and incentives beyond the minimum standard set by the directive (National Whistleblower Center).
And those are just to name a few. For further insight into international compliance laws and regulations that you should be prioritizing in 2023, have a read of the EQS group’s article.
There is a lot to take in where compliance is concerned and law firms and businesses alike need to take heed. Non-compliance with any of these regulations is not an option. We again advise you to look further and research more into these various Acts, especially if practicing across borders to ensure that your practice (and your client’s business) is well and truly on the right track.
We must state categorically that the information provided above must not be construed or accepted as legal advice in any shape or form and is only intended for information purposes.
To help with your compliance woes we suggest looking into DocFox for your FICA Compliance, LexisNexis KYC for all your KYC requirements and the PCI Mobile App and PCI Mobile Payments on COTS for all your PCI Compliance needs.
AJS is also proud to say that we have partnered with top specialists in the compliance field, such as DocFox and LexisNexis, in order to better understand and properly prepare our own software to comply with all compliance regulations – better serving our clients in all the areas they need it.
To further understand the collections and compliance trends, feel free to get in touch with AJS – we have the right combination of systems, resources and business partnerships to assist you with incorporating supportive legal technology into your practice. Effortlessly.
AJS is always here to help you, wherever and whenever possible!