Category Archives: Collections & Recovery

Collections & Recovery Should You Open Your Wallet for Omnichannel Collections?

Woman in call centre
Sep272017

In debt management, everything comes down to money. Even the collections systems you use are about stretching that last dollar or pound or euro until it snaps. However, if you don’t know what’s on the market today, you don’t know what you’re missing. You might be missing the opportunity to make a dramatic improvement in your performance and productivity, without spending a whole ton of money. In my last post, I pointed out ways that you’re probably leaving money on the table in your approach to IFRS 9. Now I’m going to repeat myself. If you spend all your time trying to move cap ex into op ex, or substantially reduce op ex, you’re probably leaving money on the table. The Dreaded Omnichannel Let me give you an example, and I’m sorry to be so obvious, but yes, it’s one of ours. Our Customer Communication Services for Collections isn’t a... [Read More]

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Collections & Recovery The Case For Centralizing Collections in Government

By centralizing collections in government, agencies can increase revenue by tens or even hundreds of millions of dollars each year.
Sep262017

Most tax and revenue agencies have strong collection operations, anchored by a large, dedicated staff of collectors supported by laws that allow for streamlined enforcement actions. Outside of tax agencies you often find departments with significant receivables, but without the mission, authority, or focus on collecting these receivables. Centralizing collections in government is therefore a significant opportunity when we focus on the area of non-tax receivables. In fact, government agencies can increase revenue by tens or even hundreds of millions of dollars each year through centralized collection activities. These new efficiencies also deliver on the challenges that State and municipal governments face to do more with less and to improve the customer experience without increased taxes or additional fees. So Why Centralize? There are many reasons to centralize collection operations: Economies of Scale. Typically, only the tax agency has sufficient debt to get the economies of scale needed to optimize collection operations.... [Read More]

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Collections & Recovery FICO Data: Have Premium Cards Lost Their Edge in the UK?

Gold card
Sep182017

Are Premium cards becoming harder to distinguish from Standard Classic cards? Is there still a place for them in the market? Traditionally, Premium* cards (gold and platinum) were perceived as reserved for the lowest-risk, best-quality accounts, and so had higher limits. Spend was thought to be greater, though a larger proportion of full-balance payers made them less profitable than Classic cards. However, over time the FICO Benchmark Reporting Service data for the UK reveals that the Premium customer is changing and so is the performance, particularly of the more mature accounts. In July 2017 25% of the accounts in the FICO Benchmark Reporting Service were Premium accounts, along with 25% of balances. With the exception of New accounts (<12 months on book), which were 20% of accounts and 20.4% of balances, Established (1-5 years on book) and Veteran (5+ years on book) accounts were about 25% of the relevant vintage population in the service. Common Beliefs... [Read More]

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Collections & Recovery Smart Government Agencies Turn to Next-Gen Customer Comms

Automated communications can increase the quality and quantity of customer engagement for government agencies
Sep142017

Government agencies are often challenged in their effort to optimize communications with their citizens. Most government executives want to increase the frequency and quality of their interactions, but tightening budgets have resulted in fewer interactions, not more. They’ve stopped sending annual booklets, they send fewer reminder notices and wait for consumers to call them rather than proactively reaching out. Reduced communication results in lower compliance and an increase in downstream problems. At the same time, more people than ever are using smart phones (SMS, email and web apps) and other electronic communication tools. Recent data from Deloitte tells us that 77 percent of Americans own a smartphone and its usage is so ingrained in our daily routine that 61 percent of Americans check their smartphone within five minutes of waking up. How long after you wake up do you check your smart phone? With this as a backdrop, it’s no... [Read More]

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Collections & Recovery Video: Trustmark Collection Agents Gain a 360º View of Customer

Aug312017

Having a single view of your customers across both collections and recovery is somewhat of an operational nirvana. It improves the experience immeasurably for customers and ensures that front line staff spend their time on the right tasks. This was one of the key considerations for management at Trustmark (a regional financial services institution with locations across five states in southern USA) as they looked to replace their 20-year-old system. Even though their existing recovery platform was performing well, the technology had dated and no product enhancements were planned. While on the collections side, the platform they were using was no longer supported. One of the concerns management heard from agents before transitioning to FICO Debt Manager was that the system they were using wasn’t always able to post payments same-day, leading to duplicate outreach and frustrated customers. Not seeing the complete customer view meant agents made multiple efforts to collect many debts... [Read More]

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Collections & Recovery Collectors: Don’t Let IFRS 9 Blindfold You

IFRS 9 on blindfold
Aug302017

There’s a clear pecking order when it comes to the IFRS 9 accounting standard that goes into effect in January. It’s an accounting standard, not a piece of banking regulation, so the hierarchy is Finance, Risk and then Collections. This makes sense, but for debt managers it will cause problems. It’s likely that many debt managers will be blind next year on how they can influence impairments. Here’s how things will happen. Your Finance team will talk to your organization’s accounting firm and auditors, and they will agree how IFRS 9 should be implemented. They will probably work your Risk department when it comes to preparing the predictive models that are required to determine expected loss under IFRS 9. Once that’s done, the rules for your organization will be binding. It’s unlikely that the Collections team will be part of the process. And if you’re in Collections, you might think... [Read More]

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Collections & Recovery Collections & Regulations: Are You Leaving Money on the Table?

Stop sign
Jul262017

Debt collectors, like everyone else in financial services, are drowning in regulatory changes. In my last posts I’ve discussed IFRS 9, GDPR and, to a lesser extent, the basket of fun known as PSD2. One of the natural human responses to change is to narrow one’s focus to the necessary task at hand and push everything else away. Just focus on ticking the boxes, and ignore the cries to rethink the way we’re doing business. Sweat what we’ve got and don’t spend any money. That’s what I’m hearing at many collection shops when the conversation turns to optimization or advanced analytics. There’s a cost to this approach, though. Collectors are in danger of leaving money — a lot of money — on the table. The IFRS 9 Bucket Challenge Here’s the first reason: Impairment provisions and losses. This is what I have dubbed the IFRS 9 Bucket Challenge. I wrote... [Read More]

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Collections & Recovery Analytics Achievers Wanted for FICO Decisions Awards

FICO Decisions Awards logo
Jul052017

A company that solved an “unsolvable” wind farm optimization problem. An automaker that uses analytics to keep more delinquent customers in their cars. An airline that uses optimization throughout its business to improve customer service and efficiency. These are just some of the past winners of the FICO Decisions Awards – and now it’s time to find the next set of innovators. We’re looking for companies that are achieving outstanding success using FICO analytics and decision management solutions. Awards will be presented in six categories: Artificial Intelligence and Machine Learning Customer Onboarding and Management Debt Management Decision Management Innovation Fraud Control Regulatory Compliance. Winners will receive recognition at FICO World, which will be held April 16-19, 2018, in Miami. Winning implementations will be featured in conference activities, and two representatives of each winning company will receive complimentary conference passes. Nominations are due September 1, and winners will be announced in... [Read More]

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Collections & Recovery GDPR – Two First Steps for Collectors

GDPR logo
Jun152017

If my last post on GDPR and collections left you feeling mildly depressed, you’re paying attention! Now that we’ve scoped out the difficulties, here are a couple of things you can do to prepare. And preparation, like compliance, is important: GDPR sets out some steep fines for non-compliance, and you don’t want your department — or your vendor — to be the trigger. 1. Create Your Data Inventory GDPR wants you to only use the data that is absolutely necessary. Whether your decisions are based on rules or algorithms, you’re going to have to show what data you are using and how it impacts decisions in collections. As someone executing collection strategies, you want to make sure neither you, your department nor the third parties serving you cause the business to be exposed. You need to make sure you understand where the data you’re using comes from, and prove that... [Read More]

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