Information is Power – Does That Apply to Your Job?
How many times have you heard “information is power”? Look back over your life. Remember how much and what kind of information (data, reports) you used early in your career to do your job. How long did it take you to get—and who had to do what to assemble—that information. Was it timely and accurate?
Fast forward to today and ask those same questions. Would you tolerate—could you even do—your job today if the speed to assemble the same quantity and quality of information was what it was ten or twenty years ago?
If your job involves connecting with past-due customers, and working through a plan to get that debtor’s account current, think back those same twenty years. Your day started by reviewing a green bar report, identifying debtors who paid yesterday and manually removing paper cards from today’s call box. Weekly, you also reviewed a green bar report of new delinquent debtors. “New” here typically meant they were more than 30 days past due by the time collectors were asked to address the situation. These “new” delinquencies started a process known as “creating the card”—the hand-written recording of summary information (name, address, limited account and collateral information) on a semi-rigid card. Improvement came when your core system printed these for you.
In September of 1989, IBS created the first Windows-based, banking industry-specific, delinquent account collection system. At that time, the same information being copied from green bar reports to cards was automatically exported from the core servicing system and imported into collection-specific software.
Again, fast forward to today. Today’s typical past-due account collection system imports the institution’s entire client portfolio, every customer and every account— not just delinquent accounts. Commonly, multiple core feeds are required to provide a full 360º-debtor view, as multiple core servicing systems are often used to service varying types of accounts.
More importantly is the bi-directional hub of information sharing, typically done in real-time. Recent economic conditions have demanded that financial institutions employ the very best technology to ensure the best financial performance of their portfolio. Sold, insured, guaranteed accounts; plus state and federal regulatory collection requirements have exploded collectors’ workloads; mandating earlier, more frequent and sufficiently-documented collector activities. Other advances in technology include:
- Automated voice messaging, employing the latest technology, is an enormous boost to productivity, effectiveness and collection compliance.
- Data providers—firms that house massive amounts of data (phone numbers, addresses, co-workers, friends, neighbors, relatives)—allows financial institutions to locate debtors who do not want to be found; collateral-securing debts; and very specialized scores help determine how easy it is to speak to a debtor, how collectable the debt is, and the overall probability of curing the past-due account.
- Firms offering collector services (repossession, reconditioning, re-sale, door knocking, advanced skip trace, legal processes) are all now a rule-initiated automated action, or a mouse click away.
- Automated, integrated bankruptcy and deceased notifications—and related information transfer—speeds and boosts accuracy as institutions protect their collateral position.
The days of a collection system receiving a simple flat file are long gone. The days of the collection system being a living, very dynamic bi-directional hub of information are here. High-end collection systems keep outstanding delinquencies down, reduce ALLL and feed institutional income. Lower outstandings and reduced charged-offs also feed income. Powerful, rule-driven automation ensures no collection missteps, boosts compliance, avoids fines and penalties and feeds income. Collection expenses and FTEs are kept to a minimum, again aiding income.