As we dive into 2022, financial institutions face an increase in their collections activity. Since early 2020, many families and individuals across the U.S. faced economic hardships and were provided assistance or delays on loan repayment. However, now that many of these programs are ending there is an increase in consumers struggling to make their payments.
With the potential increase of collections on the rise, it is important for Credit Unions and Community Banks to be prepared for what may come. During a recent MeridianLink webinar, we discussed the collection experiences and best practices with two clients: White Sands Credit Union and Commonwealth Federal Credit Union, including a few main themes:
Utilize an Integrated Solution:
A common challenge in collections is making right party contact with the owner of the account. With an integrated solution, institutions can both cut costs and decrease delinquencies. By utilizing the integrations in MeridianLink Collect, White Sands shared that they saved time and cost by no longer being required to visit external sites and juggle multiple applications. Commonwealth addressed the importance of building custom queues and note sections on each account in order to ensure the status of an account is clear for each collector, even when visiting an account for the first time. One example is, when their community was hit with a bad storm, they were able to add a message on those accounts who were in the affected areas letting the collector know not to contact them at this time. MeridianLink Collect offers a variety of integrations within the system that creates a one-stop shop for a collector who is trying to get in contact with a debtor.
Streamline Account Workflows:
When asked about their biggest challenges in collections, 42% of webinar attendees reported efficiencies as a top concern. Both White Sands and Commonwealth addressed this topic, including the importance of being able to track the activity of collectors in each account. Many times, collection teams include the involvement of multiple collectors in each account: one who sets up the account details, one who begins the outreach, and another who will find a way to move the loan forward. Without the workflows and efficiencies of MeridianLink Collect, tracking these activities would be cumbersome for these Credit Unions.
With the shift in technology and communication practices, it is ideal to be able to reach out to accounts in a multitude of ways. The formal way of reaching out to debtors in the past was to send a letter or an email, which could take hours or days for them to respond. Now with mobile devices, phone calls and text messaging are the most reliable in getting a fast response from debtors. Both Credit Unions mentioned their member's response rate to a text was faster than a phone call or email. Members would respond to the text with their situation or would even make a payment towards their loan through the online portal link in the text. This would at least allow the Credit Union to get in contact with them and work out a solution to pay back the loan. The Credit Unions also mentioned the multichannel communications integrated within MeridanLink Collect allowed them to no longer need additional devices such as cell phones or other forms of software, because all the communications work directly through the MeridianLink Collect product.
Overall, the use of MeridianLink Collect allows both credit unions to stay aligned with their collection best practices and advance in their collections strategy. Is your collection software providing you with the efficiencies and advancements you are looking for? Check out our recent MeridianLink Collect webinar here.