One of the major concerns collections managers are facing right now is keeping up with rising delinquency rates. Banks and credit unions can empower their collections teams by providing them with robust software solutions, such as those offered by MeridianLink.
But how can you ensure you have software that makes your team as effective and as efficient as possible? Here are some core components to look for:
- Automated workflow
- Seamless integrations
- Easy-to-navigate user experience
- The ability to make custom queues
- Web-based application
Learn more about the keys to effective debt collection software.
5 Must-Have Components within a Debt Collection Process
The COVID-19 pandemic has disrupted every aspect of life, commerce, and culture. The economic toll will become clearer in the weeks and months ahead, but as of today, many forecasts paint a worrisome picture.
For now, the news is changing day to day, and banks and credit unions have been forced to adapt in time, making nimble decisions about how best to serve their customers and their communities.
For the collection managers in banks and credit unions, the top priority right now is keeping up with the local regulations that have changed the collection process for months to come.
The looming questions right now are when collections will be allowed to resume and how many months it will take to get back to a normal debt collection cadence. However, what is certain is that the delinquencies are rising, and sometime soon they will have to be addressed.
Note that there are several federal and state regulations about delinquencies, and if the number of delinquencies exceeds the mandated limit, there could be significant consequences. How lenient the government will be on these regulations in this unprecedented event is unknown.
As such, most collection managers are reviewing their reports every day, and asking themselves these questions:
- How do I deal with growing delinquencies?
- How can I empower my staff to be more efficient?
- How do I keep our level of delinquencies as low as possible?
As you ask these questions, bear in mind that there are a few critical components of any effective debt collections process. Here are our recommendations.
Five Critical Components of a Debt Collections Process
1) Automated Workflow
You may decide to seek a new collection software program, but before you do, you will need to document why you need the software and what problems you are trying to solve.
If the goal is to be as effective and efficient as possible, then automation is key. You will need to replace all tedious tasks with an automated process to manage your daily collection process.
Ideally, this process will be easy to set up with built-in, flexible options to handle any business rule or set-up.
2) Integrations
How are you consolidating the information used by your staff? Information consolidation from your core system is vital to having current, accurate information on your members and customers, and to ensuring that you are compliant with all applicable regulations. Finally, information consolidation can keep your communications timely and effective.
Ideally, your organization should utilize software that can integrate information from various sources, so it is readily available for your staff to use, reducing time verifying and researching.
Some necessary integrations include DocuSign, skip tracing, and repossession vendors.
3) User Experience
Another critical consideration is how users will engage with your collections system, and the ease with which they’ll navigate the process.
Simplicity is key. Having a simple-to-use system that will provide a user dashboard to each staff member, outlining their daily targets and case list, will help you manage your team and identify any obstacles or roadblocks they encounter.
Additional user functionalities, such as automated task lists for loan types or the ability to set up collection reminders, ensure that your team is working efficiently, and your members and customers are receiving responsive service.
4) Custom Queues
Custom queues will help your team members apply advanced filtering to their cases, while also empowering them to build their own unique processes. Additionally, they will be able to triage cases based on specific criteria.
Having the ability to search and segment cases through custom queues will also help your bank or credit union to understand trends within your community or your customer base.
5) Web-Based Deb Collection Software
Web-based collections software is really the best option, and for several different reasons:
- You can work from anywhere.
- It’s usually much less expensive than the alternatives.
- You won’t have to pay for expensive servers, either.
- You’ll need less manpower to manage the software.
- The software will be updated automatically.
- There’s less need for training, which means more time serving customers and members.
In sum, web-based collections applications will allow your financial institution to conserve its resources and make better use of its time.
