Empower employees to collect more successfully while controlling costs
Editor’s note: This is the final blog in a three-part series on the state of collections. Find part one here and part two here.
Collections is — at its core — an industry centered on human capital, and this is reflected in the dominant costs related to employee salaries, benefits and bonuses. In fact, employee salaries are a major or substantial expense for 78% of respondents to a recent survey, The State of Third-Party Collections 2020: A Year of Pivots, Challenges and Opportunities.
Boosting employee productivity with technology
In response, forward-thinking collections agencies are turning to a variety of ways to increase productivity and lower costs. Nearly half (49%) of respondents report that their companies are investing in new technologies to help them achieve those objectives.
These are sophisticated technologies to help third-party collectors reach consumers faster, prioritize their portfolio and improve efficiency and results. Let’s take a look at some of the most effective.
#1. Right party contact: Finding the right person with less effort
A very useful innovation in the collections space is right party contact: tools that help collections agencies efficiently get in touch with the consumer holding the debt they’re trying to collect.
How are collectors doing in this regard? More than half of respondents report say that it typically takes two to four attempts to contact a person. Another quarter say that five to seven attempts are needed.
It’s a proven formula: The more people contacted with the least effort, the more success collectors are likely to have. Right-party contact tools include:
Right-party contact search tools: Third-party contact tools, such as TLOxp® powered by TransUnion, for example, helps collectors uncover, locate and verify contact information on individuals and businesses. It filters through billions of public and proprietary records — including most recent phone numbers, addresses, relatives, associates and places of employment ― to locate contact data for even the hardest-to-reach individuals and businesses .
Batch processing: To further increase efficiency and free collectors to collect rather than pulling contact information, batch processing makes it fast and easy to handle high search volumes through automation. This technology delivers contact information through batch for bulk data appends, as well as via direct API connections straight into collections agencies’ software platform.
One way to increase employee productivity is to remove accounts that should be avoided or are considered uncollectable through segmentation. Segmentation analyzes consumer data from a variety of sources to determine which accounts represent specialized inventory that should be handled with care — or avoided — such as those in bankruptcy or actively serving in the military.
#3. Debt recovery scores
To work accounts more efficiently, another technology called debt recovery scores helps collectors know where to focus their efforts using scores that identify which accounts are most likely to pay. These scores are based on data elements not found in traditional models ― like balances, credit limits, past due summaries and 30 months of account history. These factors provide a 360-degree view into how a consumer’s behavior has trended over time ― insight enables collections agencies to prioritize the accounts that are most willing and able to pay. This streamlines operations, maximizes recovered dollars, and saves time and money.
Another sophisticated tool, triggers, monitors a consumer’s behavior that could indicate a greater likelihood of recovery. Triggers automatically alert collectors of a change could affect the ability to collect ― like a decrease in account balances or the opening of a new credit line.
Learn more about how technology helps lift profits
Given the state of the industry, it’s imperative that third party collectors embrace tools and technologies that will put their agencies on the path to recovery. Get exclusive insights in The State of Third-Party Collections 2020 report.