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In a recent webinar titled “Mastering Your Collections,” MeridianLink® unveiled cutting-edge strategies and technologies aimed at enhancing the collections process for financial institutions (FIs). The event spotlighted the critical need for FIs to adopt advanced solutions capable of navigating industry shifts, regulatory demands, and changing consumer behaviors.
This blog summarizes key insights from the webinar, focusing on the intersection of industry trends, technological advancements in collections, and how MeridianLink® Collect can empower FIs to enhance their collection strategy.
Snapshot of Industry Trends
Shedding light on the looming financial challenges of 2024, the recent MeridianLink consumer survey reveals a staggering 40% of respondents anticipate financial hurdles in the year ahead, marking a pervasive sense of unease and uncertainty.
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The Federal Reserve’s decision to raise interest rates since March 2022 has significantly reshaped the landscape of credit access for Americans. Bankrate survey findings disclose a stark reality: securing a loan has become a coin toss, with half of all applicants facing rejection. Denials are particularly prevalent in credit card applications and limit increases, leaving many individuals adrift in a sea of financial uncertainty. For those already navigating precarious financial situations, the tightening credit market adds another layer of complexity. The recent release of the Federal Reserve’s fourth-quarter 2023 credit card charge-off and delinquency data has only deepened these concerns, painting a troubling picture of American consumers’ financial health.
Nevertheless, amid these challenges, there is room for optimism. Despite the hurdles posed by denied credit, mounting debt, and uncertain financial futures, there are strategies and tools that your financial institution can employ to support your consumers through their financial journeys during times of need, while still addressing your own obstacles in the face of increased delinquencies, regulatory pressures, staffing issues, and shifts in consumer behavior.
Adjusting to a Changing Landscape
As trends shift, new challenges emerge. Subsequently, financial institutions will need to lean on data, technology, and partnerships to support their goals moving forward. Technology, in particular, will need to be robust enough to help collectors and auditors with several key needs, including:
Intelligent collections—Leveraging AI through machine learning and data optimization to focus on the right cases at the right time.
Regulatory compliance—Keeping pace with regulatory changes, including tools that can track, audit, and report compliantly.
Enhanced communication—As expectations and communication styles evolve, FIs can create a tailored, personalized experience for communicating with consumers, using SMS and email in addition to traditional methods.
Collector optimization—As FIs continue to experience staffing issues within collections teams, technology can automate and augment teams to optimize efficiencies while remaining compliant.
These specific needs are tethered to high-level challenges that collectors often face, including:
Management—FIs struggle with complicated configuration, administration, and management of existing platforms, as well as new releases and upgrades, which strain IT resources.
Efficiency—FIs deal with too many manual processes and a lack of necessary third-party integrations, automation, and workflows.
Support—Tiered support structures mean frontline staff can’t get the additional support they need without long wait times.
The solution to these obstacles lies at the intersection of data, technology, and collaboration.
Your Solution To Streamlining the Collection Process
Adopting a flexible, data-driven approach to collections allows FIs to meet the needs of their consumers and the demands of a dynamic regulatory environment. Under the umbrella of the MeridianLink® One platform, financial institutions gain entry to a suite of interconnected, data-powered products to support the entire lending journey for consumers, from deposit account opening, consumer and mortgage loan origination, data access, analytics, consulting, scoring, and collections.
Within this composable, cloud-based platform, MeridianLink® Collect allows users to shift their focus to managing delinquent accounts, sparing them from the intricacies of back-end technology and system updates.
Here are a few key ways MeridianLink Collect can support you in efficiently handling delinquencies while evolving alongside operational goals.
First-Party Data
First-party data is king, which is what makes MeridianLink Collect so powerful. Integrated seamlessly into the broader MeridianLink® One ecosystem, Collect taps into core and payments data, along with other critical data sources within the system, such as direct application data, credit information, and analytics. The accessibility of first-party data through MeridianLink Collect means FIs can remain relevant and foster relationships with existing consumers due to a 360° view that allows FIs to make the right decisions at the right time for case resolution.
Third-Party Data
FIs can also leverage valuable third-party data from a comprehensive suite of external integrations. This helps support collectors and improve operational efficiency. MeridianLink Collect’s third-party integrations include everything from payments, identity reporting, skip tracing, repossession, government reporting, and third-party collections to capturing e-signatures, communications for SMS, and compliance.
Better yet, these seamless integrations keep collectors within the platform, eliminating the need to bounce between systems. The result is more data—and more reliable data—so collectors can easily work cases as they arise in the workflow.
Customizable Workflows
Customizable workflows allow collectors to tailor the process for their FI, setting up checklists, automation, reports, and omnichannel communications to reduce process-heavy activities.
System admins and collection managers can customize MeridianLink Collect, creating tasks and queues to define the steps needed to work an account in a particular queue. Users can also apply filtering for different case strategies, further reducing manual activities.
Omnichannel Communication
Our robust queue engine allows collectors to build rules aligned with a particular collection strategy. This includes omnichannel communication via email, phone, SMS, and text messaging, which can be done at the individual entity level or via templated bulk sends. This enables collectors to do behavioral outreach and communication within one platform—that is audited, tracked, and compliant.
Compliance Support
Everything in MeridianLink Collect is done through a lens of supporting your compliance efforts. FIs enjoy built-in functionality to support compliance and set up customized internal workflows that support staff, policies, and procedures. This includes features to support a wide band of application regulations and the tracking and management of opt-outs.
Financial institutions and collectors can help consumers by not only keeping a finger on the pulse of prevailing trends and challenges within collections but also finding and leveraging the right tools to enhance their strategies without draining resources. Innovative solutions like MeridianLink Collect are indispensable when it comes to solving the many challenges associated with collections.
