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Case Study: Meeting the rising delinquency challenge head-on

Case Study: Meeting the rising delinquency challenge head-on

North Shore Bank

What if you...
•Are a financial institution in a recessionary economy?
•Facing a steady rise in delinquencies?
•Unable to meet the heavy call demand necessary to stay on top of recoveries?

About North Shore Bank:

THE BANK OF YOU

At North Shore Bank we remain committed to our customers, providing banking services that empower them to live the life they want, and it's been that way for over 85 years.

NSB is about helping families handle their day-to-day finances, purchase a new home, invest for retirement, or helping small businesses grow.

North Shore Bank covers communities on Wisconsin's eastern edge -from Kenosha in the south to Green Bay and the Door County peninsula in the north.

Founded 1923
Total Assets Nearly $1.9 Billion
53 Branch Offices
www.northshorebank.com

Welcome to Connie's Challenge

As the AVP of Collections -Residential Mortgage Loans, Connie Hagen oversees a collections department responsible for collecting on mortgage loans. IBS first came to Connie's rescue in 2003, when NSB purchased IBS' Collection and Asset Recovery Manager –Professional(CARM-Pro). CARM-Pro allowed Connie to hold mortgage collections to two FTEs over the past seven years. However, during the past couple of years, with the recessionary economy and its effect on Wisconsin homeowners, North Shore Bank (NSB), like most other banks, began to experience higher delinquencies in their residential mortgages. Along with the higher delinquencies came a greater need for better organization of collection activities and stronger tracking for compliance. Making matters worse, like many financial institutions today, Connie was also faced with the added challenge to control the growing delinquency problems without any staff additions! In short: do more work, do more complex work, do it under tighter regulatory awareness, and do it for less money. Sound simple?

The Perfect Fit

Connie first heard about the IBS-SoundBite relationship in January 2009. With no economic recovery insight, Connie knew that the use of the automated voice messaging solution was the solution to her growing problem. In addition, Connie knew that NSB's Consumer loan department was facing an equally challenging time with their rising delinquencies and increased collections efforts. Armed with the facts, a small, one-time configuration fee, nominal use charges, user defined professionally created voice messages and an automatic interface to CARM-Pro, Connie presented this solution to senior management. Expanding CARM-Pro to incorporate automated outbound debtor voice messages, provided from a high quality long term proven vendor (IBS), Connie was given the green light. The decision was made to implement SoundBite and first configure the Mortgage loans, and if all went well the Consumer Loan Department would consider it as well.

So worth the money!

The NSB mortgage loan portfolio consists of over 6,000 loans. All loans are due on the 1st of the month, and collection efforts begin on the 17th. On any given month there could be anywhere from 500 to over 1000 accounts that would need to be contacted. "With 2 people trying to complete that call volume manually, it was extremely difficult. Now, using the CARM-Pro/SoundBite solution, we are able to service these accounts with the same 2 people and are able to now keep our delinquency ratios below the national level", reports Hagen.

According to Hagen, "Within minutes of CARM-Pro/SoundBite initiating calls, we immediately start receiving callbacks from the customers stating they got a message to call us. We started using  ARMPro/SoundBite in April 2009 and thought after a few months it might lose its effectiveness, but that has not happened! In the past, when our surge in delinquencies would come in, it would take  people, 3 to 4 days to call every account and that was at a frantic calling schedule. With CARM-Pro/SoundBite when that surge now hits, all of the accounts, no matter how many, (50 or 1000) all are called within a matter of minutes and we immediately start to see the results of people eturning the calls."

"It has been a great system for us and right now, I don't know what we would do without it." Connie Hagen, AVP North Shore Bank

Why Automate?

  • CARM-Pro is updated with the date, time duration and result of every SoundBite call. Results indicate if a message was left, a machine was reached, a live person was reached or other call results happened.
  • Performance reports, like bad phone numbers, are produced.
  • Flexible call time strategies let clients alter when calls happen.
  • Quality voice talents are used for creating outbound messages (or clients can use their own marketing team to create these outbound messages).
  • Professional scripts deliver personalized voice messages.
  • Powerful text-to-speech technology allows the inclusion of debtor and account specific information in a call script, much like traditional mail merge – but with speech.
  • Documented required time sensitive debtor contact increases compliance.

"I love the feature that allows us to change the time each day that SoundBite calls. We are able to have the calls made 6 days a week (Monday through Saturday) and can set SoundBite to call on any given day anytime between 8AM and 9PM. If you want it to call at 8PM tonight you can set it to make the calls at 8PM. Then if you want it to call at noon the next day you can set it for noon. I love being able to switch the time and try to catch the customers when they are home at night or early morning Saturdays. Now there is never a routine" states Hagen. Clients can also configure how they want SoundBite to treat common conditions, like busy, no answer, answering machine – do nothing, wait a period and try the call again, leave a message (or not). Optionally, if staffed and equipped, clients can turn on "transfer mode" allowing debtors to "speak to an agent..." at the press of a button on the debtors' phone, bringing that live call to a collector.

IBS clients can also incorporate varying CARM-Pro/SoundBite call campaigns to address varying client needs. Choose a campaign for different account types; mortgage loans, consumer loans, overdrawn deposit accounts, credit cards, etcetera. Create another campaign for varying "compliance" needs to address state/federal laws, investor, insurer and/or guarantee communication requirements as well as varying policies of that financial institution.

"This powerful tool allows institutions' collectors to focus on their higher priority accounts and activities, while the CARM-Pro/SoundBite solution professionally delivers institution "approved" past due communications to their debtors." Rob Daley, IBS President

The Power of Partnerships

Based on monthly increases in the number of delinquencies, the inability to stay on top of those accounts that were going to roll over 30+days late and the fear that there were things that were falling through the cracks, Connie knew that she needed help. Connie turned to her Collection and Recovery Software vendor for guidance. Connie and North Shore Bank have been working with IBS leveraging CARM-Pro since 2003. During this time, Connie developed a strong partnership with IBS, continuing to add products as they became available.

"Partnerships are a fundamental way that IBS operates" says Rob Daley, IBS' President. "Partners are our clients, they are our core system providers, and they are our complimentary product providers." Partner may be defined as business associates working to common interests, but to IBS, partners are far more." Read this recent article in the May issue of Michigan Banker to learn more about IBS and partnerships (http://www.ibshome.com/uploads/emailnewsletterfiles/114.pdf).

IBS partnered with SoundBite, a leading provider of on-demand automated customer communications, to bring high-end outbound messaging solutions to IBS clients at a fraction of the cost of traditional staff. "This powerful tool allows institutions' collectors to focus on their higher priority accounts and activities, while the CARM-Pro/SoundBite solution professionally delivers institution "approved" past due communications to their debtors," says Rob Daley, IBS President.

"Our Consumer Collection Department came on board a few months ago. Back when we were installed, they didn't think they needed it as they had recently added to their staff. However, even with this additional staff, due to rising delinquencies the early collection efforts needed additional support. They too are happy that all the accounts are receiving calls and have noticed a decrease in their delinquencies. We feel good knowing that every day, every account that needs a call is receiving that call. An added bonus: It is also nice now if someone is out on vacation or out sick, calls can still continue and coverage is still there no matter how many people are out. It has been a great system for us and right now I don't know what we would do without it!," continues Hagen.

Frequently, new technology is delivered with the promise to "save time, save money". This is a fantastic example of great new technology that saves time, saves money, while professionally improving operations and compliance!

SoundBite interfaces with CARM-Pro by creating a specific queue, based on your criteria, to send outbound voice messages, reminding your clients of their past due accounts.