Debt collections is a complicated business. There are many moving pieces to juggle and any number of things that can go wrong. That’s why many banks choose to outsource some of their debt collections operations to third party agencies.
Problems, however, can arise when there is a communication breakdown between banks and agencies, or when there is a disagreement. This is where solutions like the EXUS Financial Suite (EFS) step in to help organisations work together and recoup debts reliably and consistently.
Until recently, most systems or ways of working didn’t give banks and agencies an easy way to collaborate in real time. The workaround was always to work on a staggered basis. This meant a bank outsourcing a part of their portfolio by sending account and customer data to agencies at an agreed interval, which could be every day or every week. Only then could the file be returned to the bank with notes describing what they managed to achieve for each customer and how they are being handled.
This is problematic for a number of reasons.
This is an incredibly convoluted and complicated way of working that can be easily circumvented by a system where everyone is (quite literally) on the same page and the bank is able to monitor agency performance and interact in real-time.
The traditional spreadsheet approach means there is a lack of direct insight on the actual team working on the assigned portfolio. It’s left very much up to the agencies to decide whom to contact and when and how to contact them. As agencies tend to work on commission, this often leads to cherry-picking the accounts with greater past-due amounts, leaving the rest unhandled.
With no real-time access there is no way for the bank to enforce its collections strategies on the agency. This is particularly problematic if the bank in question has a strong reputation to uphold and it is spreading its debt portfolio amongst multiple agencies.
Arguments between banks and agencies over commission can be depressingly common in the debt collections game, particularly as collections agents so often depend on commission to make their money. Without a definitive system tracking the effectiveness of an agency and its collections tactics, these disputes are likely to continue.
Third-party portals – such as the flexible outsourcing module contained within the EXUS Collections solution – allow banks to see exactly what is happening with the accounts being handled by third parties in real-time, without having to wait for a report at the end of the day or the week.
A third-party portal offers several valuable solutions for banks that might have become frustrated with how they manage their collections partners. Firstly, working online via one system means that everyone has access to the same real-time information. This has various benefits that can improve workflow and results. For example, the collections strategy and order of contact that the bank has designed can be more carefully and reliably enforced and the bank is able to gain more substantial real-time insights.
Those are the obvious solutions, but the EXUS platform specifically boasts several others that might solve problems banks were not even aware of. If you want to outsource part of your portfolio to more than one agency, for example, the EXUS outsourcing module allows you use set business rules to select what parts of the bank’s portfolio you want outsourced and to which agency you want them to be outsourced. An agency’s performance can also be evaluated automatically based on certain criteria. For example, if you offer an agency a portfolio of accounts in late delinquency, if at the end of the assignment the accounts are even worse, they can be automatically passed to another agency based on rules set within the system.
You can also use the system to split your products between individual customers, so multiple agencies can potentially handle a customer’s entire portfolio. Because if a customer has a credit card and a mortgage with your bank, you might want one agency to handle the former and another to handle the latter. This way, they can receive different calls from different agencies about different products, but it’s all going through one system.
You might also desire more options when it comes to the geographical distribution of accounts based on location, particularly in larger countries where you have field agents working across vast distances and multiple regions. The EFS contains these options and plenty more besides.
The EFS third-party portal is also an incredibly flexible and powerful solution for security. The rule management system within the EFS can control what each agency sees. They will only have access to the portfolios assigned to them, which is truly vital when you consider the importance of privacy and security when dealing with such sensitive data.
Implementing a third-party collections portal such as the EXUS Outsourcing Module is not only about making operations run smoother, but also about achieving better results. Implementing the outsourcing module could see a reduction in customer complaints from agencies as a result of the system’s seamless integration.
The real-time monitoring also allows a bank to know exactly how and when to adjust the accounts that agencies are handling, leading to a reduced flow to higher buckets and an increase in the amounts collected. The fully automated process for calculation can also lead to significant decreases in commission and can allow the agency to improve its bottom line and its reputation with the bank and its debtors.
Another positive result of implementing a third party portal is the increase in transparency between bank and agency. This is reflected in the way commissions are calculated, with the bank and agency able to see in detail whether the customer has paid, when they paid and what action the agency took. These criteria can then be used to automatically calculate commissions based on quantifiable records, meaning time wasted disputing commissions and an overall decrease in agency commissions.
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