Technology and Collections

Introduction
Technology has played a pivotal role in collections over the last decade. Not only have staggering improvements in process efficiencies been achieved, but a completely new set of collections concepts have been developed to make optimal use of these new toolsets.

This series of tips will review the various technology options that collections managers have at their disposal. This fourth tip discusses some of the operational factors that need to be considered when selecting a collections system.

Tools to enhance collections operations
Operational factors need to be carefully considered if an organisation wants to improve the efficiency and effectiveness of its collections. Companies with excellent collections strategies will certainly be hindered by the poor operational execution of these strategies. This can be due to poorly thought out processes, management techniques, performance measurement and inappropriate systems. However, if it is done correctly using well designed processes and systems then collections strategy effectiveness can be maximized and costs of the area minimized.

The following are key operational issues to consider when selecting a prospective collections system.

Tracking
Tracking is a key element of a collections system. It is vital to track, amongst other things, collections costs per accounts, promise to pay’s kept or broken and activities taken on an account. Champion-challenger strategies should be developed on the operational as well as the strategic side of the collections system to determine which areas need to be improved. An example of this would be doing tests to determine when would be the best time to phone high risk accounts.

Workflow abilities
Sophisticated workflow ability has an enormous advantage in a collections system. This refers to a variety of things such as the ability to escalate accounts on a selection of triggers, flexibility to create business-appropriate collections processes and easy to use front-end screens with dynamic scripting.

Is the system technically appropriate for the organisation’s IT environment?
Collections systems have to interface with account processing systems. It is vital that the system selected does not cause administration and support headaches by being based on a different technology platform or different database backend. It is also important to ensure that the system is robust and stable, as system downtime is an extremely costly exercise in a collections department or company.

This series of tips considered the various aspects that one should look at when considering technology options for a collections environment. These issues are critical to making a well informed decision about purchasing a system to assist with your collections.

Paul Shortridge is a Senior Consultant at PIC Solutions, the largest customer management solutions company based in the Southern Hemisphere. He has over 5 years experience in the financial services industry. Previously with Nedcor as manager – innovation in retail credit, he headed up a team that successfully rolled out projects to reduce risk, increase revenue and reduce costs across all credit and transactional products. In this role, he implemented initiatives that increased revenue by R100 million and introduced their 8-second home loan pre-approval process. As lead consultant at London Bridge Group, Paul was responsible for the business lead in large scale project implementations as well as assisting the sales team with expanding their market in South Africa. He holds a BSc and MSc in Chemical Engineering from the University of Cape Town.