The word technology refers to the application of science for a practical purpose. To get to the heart of the application of science we reached out to the top collection company vendors. They are the visionaries that stay abreast of what technology can accomplish. Collection vendors are relied on as partners by the agencies that use their products. As we visit agencies, they tell us how important it is for their collection partners to be accessible. To determine who was accessible, we asked for a few minutes to talk with the leaders of each firm as part of the selection process for the Top Collection Product Companies for 2014. Their insights on the future of collection technology and compliance are enlightening.
“Technology does everything for compliance. It is one of the most effective ways to leverage a toolset to manage compliance, like tracking complaints to mitigate your compliance risk,” said Mark Bergmann, COO of CDS Software. “With the ever changing FDCPA, TCPA and CFPB risks, technology is the leading driver for compliance and efficiency. Agencies have become very complex and have been impacted by lower margins. It begins with a fundamental understanding and an organizational commitment to mitigate risks.”
Likewise, Ron Fauquher, CEO of Ontario Systems pointed out the importance of software for compliance.
“We have really just begun,” said Fauquher. “Technology for collections is in its infancy compared to the airlines where everything is connected. Compliance is complex and requires robust technology. Title control is a solvable problem if you can get agreement. The creditor has the documentation; how does it not make it to the agency? The technology exists to point to the documentation to make the linkage to pull the data. This is done in the healthcare world. It will get solved.”
Jack Gordon, CEO of WebRecon expressed hope regarding the industry’s relationship with the CFPB.
“There is no question that the most popular topic is the CFPB,” said Gordon. “It is on everyone’s mind; to not only stay in compliance but to stay off the radar, to not be subject to an investigation. Compliance is an ongoing goal because of ongoing regulatory changes. We understand it a lot better than five years ago.”
However, an uphill battle still remains. The CFPB multiple-choice process leads a consumer to making a complaint and causing them to feel concerned by reading the categories offered.
“The system is skewed to file a complaint against the creditor,” noted Gordon. “Because of this age of vicarious liability, the creditors are liable for their vendor activity which alerts creditors.”
To further improve the compliance situation in the industry, collection technology can also act as a guardrail preventing mishaps on the collection floor.
“Software can stop calls and letters to certain states if the agency is not licensed there,” said Lex Patterson, president of DAKCS. “There is also the problem of interpretation. If the consumer only has a cell phone they might handle it a different way since so many more cell phones exist today.”
Kelly Conway, president and CEO of Mattersight Corporation, believes call recording technology can invoke an, “85% reduction in compliance error rates by tracking the calls that don’t provide the mini-Miranda, or hear a debtor say, ‘don’t call this number.’”
Talk-off Conversations Analyzed
According to Conway, the technology can track this and “see that it gets into the consumer record to prevent it from happening.” Additionally, “you can notice people who are serving in the military. Talk-off conversations can be analyzed to determine where training is needed.”
The after-the-fact analytics can be stored to use the data for call routing. With the desktop and the voice synchronized, you can get the analytics every 15 minutes and sit down with the collector afterwards to coach them on what they are doing with promises to pay versus promises kept, for example.
Terrel Bird, CEO of TCN spoke of software being able to keep a collection professional and his/her superior in the know.
“The system makes sure it does not make a call until an agent is available so there are no dropped calls, said Bird. “Reports can detail any time available during the campaign. The charts and details that come afterwards are served up on dashboards and charts. There is a call recording function along with a listen in and coaching function.”
Peter Ghiselli, VP, U.S. Emerging Markets of TransUnion, emphasized the urgency for compliance-enabled technology.
“It no longer takes federal legislation which we could get used to after the law was passed,” said Ghiselli. “Technology development takes time, but now the response has to be more immediate because the compliance environment changes rapidly, and technology has to be changed and beta-tested based on a new technological build environment.”
Matthew Hill, President/CEO The InterProse Corporation described software being able to perform “compliance tracking [for example] out-of-statute accounts and integrating rules to allow the system to do the heavy lifting for the agency.” In that example, “you can contact the debtor but must tell him he does not have to pay, but if he does it can be removed from credit report.” The technology “enables you to run the business rather than be record keepers for the government,” Hill stated. “The agent needs a register of complaints and disputes to build a nice dashboard and reports to develop the action path to ensure they are not called or treated inappropriately.”
Compliance Places Additional Importance on Software
The growing focus on compliance places additional importance on software. It is no longer a matter of convenience. James Dunlap, CEO of Lariat noted such a shift.
“The burden is falling on your software; its ability to respond,” said Dunlap. “It is a technological arms race for collections software. Collection technology is not one more glitzy feature, it is a fundamental change.”
At one point, the growth from a small firm to a large firm was heralded by a transition to using more technology in more aspects of the collection process; but now is to keep up with compliance demands.
“An RFP is drastically different than it was ten years ago,” Bergmann explained. “There are questions about compliance, data security and financial well being which are more difficult for smaller firms. This is not just a transition, it’s an evolution.”
Aside from aiding compliance, technological advancement has also improved efficiency. John Schaefer, CEO of Interactive Data detailed the evolution of technology in recent years.
“Advances in technology will allow agencies to work more efficiently and effectively by creating more cutting edge products,” said Schaefer. “We have systems so much faster and able to run algorithms so much faster. My iPhone is 100 times more powerful than my computer at Georgia Tech, at 100th of the size. I had four MB of memory, now my phone has 32 GB of memory in my hand.”
Complaint Numbers Down
The introduction of new technology here documents improvement. This is letting the collection industry experience a positive trickle down effect. Gordon, who tracks CFPB data reminded us that, “since complaints are being quantified, they are down from 10,000 to 3,000 a month; 95-98% are resolved without money changing hands.”
Improvements such as this lead many to aspire to the next great advances that will ease the collection process further.
“I believe that new generations growing up with technology will determine they don’t need a keyboard,” said Fauquher. “Talking to your device will become more robust which will increase productivity. When everything is transcribed electronically it will change everything.”
According to technology and entrepreneurial guru Ben Horowitz, “the technology startup world is where brilliant people come to imagine the impossible.” While the opposition to good collection business seems insurmountable, a technology solution will arrive. So hold on unsung heroes, the answers are already being coded. Ghiselli reminded us, “It will bring respectability. We [the collection industry] hold a very important part in the economic health of the United States.”