Good for Business: Collections Departments (not Branches) Managing Negative Deposit Accounts
Shifting Negative Deposit Account Collections From the Front Line.
Five years ago, it seemed common for day-to-day collections efforts on overdrawn and negative accounts to be the responsibility of branch managers or other retail banking staff...It was not uncommon to see branch staff slowly working through multiple-page printouts of negative deposit accounts, making phone calls, and jotting down notes, day after day. In truth, even though these calls to the negative balance account owners were really "collections calls", the actual bank or credit union collections department" was usually only responsible for collections efforts on consumer loans, mortgage, and perhaps credit card portfolios.
It seems that banks and credit unions alike have finally recognized the possible risks with collections compliance, as well as overall redundancy in the assignment of responsibility on negative accounts, and an increasing number of banks and credit unions are now migrating deposit account collections efforts from the branches to the actual collections and recovery department. The shift can certainly be attributed to a desire to align department responsibility, however it could also be argued that it is made possible by leveraging the "back-office" collections automation technology, in an area that has been traditionally been thought of as a "front line" responsibility.
Negative Deposit Account Collections Is Not Time Consuming.
Collections automation technology brings many efficiencies to deposit account collections, including strengthened tracking and reporting capabilities for analyzing full portfolio trends, and more notably reduced manual process via Automated (Riles Based) Letter functionality and Automated Voice Messaging, Text, and Email services. Translation: reassigning negative deposit account collections responsibilities to the bank or credit union's internal collections department does not mean their workload volume needs to increase!
"Rules Based Letters" is just what it sounds like...a letter or notice will automatically generate based on a set criteria list. Many IBS clients, whose core processor is not able to generate properly worded notices, are leveraging this functionality to generate hundreds of negative deposit account notices, without manual intervention.
Coupled with Rules Based Letter functionality, IBS clients are also streamlining the negative deposit account collections process by leveraging integrated services from SoundBite Communications, a leading provider of on-demand automated customer communications. SoundBite services include voice messaging, text messaging and emails campaigns, as well as direct-connect and hosted predictive dialer capabilities....each campaign and message is tailored to the bank or credit union's specific requirements, to be fully compliant with today's regulatory and servicing standards. IBS clients who have activated SoundBite have been able to increase departmental productivity by freeing staff from dialing and leaving messages.
Complete Portfolio Awareness is Good for Collections Compliance.
As we have noted in prior articles, many bank and credit union collections departments focusing on complete portfolio collections efforts – which means not only having full portfolio awareness when working with a debtor, but also ensuring fair debt collections practices carry over to negative deposit account collections – ensuring collections compliance. Some clients shared that, prior to leveraging collections automations software to manage negative deposit account collections, branch or collections staff would call a debtor on a delinquent or negative account, without realizing that the debtor had been contacted earlier that day by a different department...the classic instance of the right and left feet not knowing what the other is doing (a risky dance in today's volatile regulatory environment). Bank and credit union collections departments share this now that they have the technology capable of detailing and tracking all contact attempts to a debtor, related to any account in his/her portfolio...ensuring the debtor does not get "harassed", and that there is an audit trail tracking every interaction.
Not only has negative deposit account collections operations migrated away from the branches in recent years, but for IBS clients, it has done so without adversely impacting the workload of collections and recovery staff. It could also be assumed that by leveraging collections automation technology to facilitate full portfolio tracking and awareness, it has become easier to track and ensure compliance with state and federal regulations...a common goal for front line and back office departments alike.