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3 Ways Tech Integration Is Failing ARM Businesses

3 Ways Tech Integration Is Failing ARM Businesses

This is the first of four posts in our OS blog 2.0 series highlighting the “ARM ecosystem”—what it is, how it works, and how ARM businesses can benefit by adopting this approach.

 

In their quest for market dominance, more and more collection agencies are vying to become the earliest of early adopters. They stay on top of the latest advances in ARM technology and move quickly to avoid being left behind.

Maybe you can relate. As tech innovators, researchers, and developers, we certainly can.

The allure of point solutions offering predictive analytics, AI-powered bots, personalized consumer engagement, etc., is strong. Like Tantalus’s mythical fruit, they dangle in front of business owners and IT teams, begging to be integrated into core collection platforms—a seemingly simple path to a much more streamlined, successful operation.

But the reality is a bit more complicated.

Best-of-breed solutions should, in theory, excel at their respective functions while working together in harmony to simplify collections. But inherent flaws in the classic ARM bolt-on integration model can have the opposite effect, thus working against business goals and interests.

Here are three big problems that tend to accompany the typical ARM tech stack.

 

Problem #1: Outsized Technical Burdens and TCO

Bolting ancillary solutions onto an existing tech stack creates the need for custom integrations and multisource business logic to ensure the level of interoperability collection agencies need today. A unified, seamless tech environment is crucial for streamlining account management, helping adhere to day-to-day compliance demands (in step with ever changing rules), and achieving optimal revenue recovery.

By virtue of its disparate multivendor design and architecture, the classic ARM bolt-on integration model shifts the burden to collection agencies to play the role of IT provider. System maintenance is a never-ending cycle that eats valuable time and resources.

When an otherwise routine update or technical fix is performed, it reverberates throughout the system. Disparate but interdependent parts, like links in a chain, then require their own reconfiguring so they remain compatible and fully functional.

For businesses, this unwieldy setup translates to a higher total cost of ownership (TCO) and increasing IT investments over time. It also means less time spent on developing high-value IT initiatives and strategies that drive revenue (e.g., onboarding new clients faster).

 

Problem #2: Ongoing Compliance Risks

According to BillingTree’s 2018 ARM Operations and Technology survey, compliance is the industry’s foremost operational concern. That concern may also be the industry’s greatest obstacle to progress.

While most ARM businesses aim to provide a better experience for consumers—thus becoming a “sticky” provider to clients and increasing recovery rates—many feel trapped in a complex web of federal, state, and municipal laws governing contacts and payment methods. Paralyzed by fear of risk, these businesses are reluctant to move in new directions.

Consider, for example, the CFPB’s proposed new rules. Agencies must abide by call caps, meet conversation history requirements, and get E-Sign consent for use of text and email messages in legally required notices. But visibility gaps between and among point solutions in an integrated tech stack pose major risks.

There’s no system-wide awareness of consumer preferences, consents, and prior communications. There’s no way to track customer data and communications through the entire operational cycle, without adding that data flow burden to the agency, adding again to the TCO. Therefore, there are no built-in protections against initiating too many or the wrong types of contacts.

For ARM leaders who are looking to improve their long-term prospects but concerned with maintaining compliance, the opportunity costs and potential liabilities they face make the classic ARM bolt-on integration model a lose-lose proposition.

 

Problem #3: Lingering Inefficiencies

Classic ARM bolt-on integration not only consumes resources on the IT side, but also limits gains in operational efficiency. The same lack of visibility that increases compliance risks also denies collection agencies the insights they need to take control of and streamline the collections cycle.

Even with best-of-breed solutions powering collection functions across the board, there’s no central brain governing and tracking account activity. As a result, agents continue chasing low-value accounts, or chasing high value ones at the wrong time, or with the wrong channel, or for too long. Productivity suffers, as does revenue recovery. Business leaders can’t make informed decisions, and agencies risk falling behind in a fast-moving industry.

In this environment, a central brain is the key missing ingredient. In fact, it’s the very thing ARM businesses need to thrive. It can help ensure every account is worked properly, minimize operational and cost burdens, make compliance the default, and empower IT personnel and agents to bring more value to the business.

 

What’s the Alternative to Classic ARM Bolt-on Integration?

An ARM ecosystem differs from an integrated tech stack in ways that free and enable businesses to accelerate their success. All tools in the ecosystem are designed from their inception to fit and work together seamlessly in a single unified system. All account data is shared, and accounts are easy to track and manage. System management and customization are simple, and built-in safeguards greatly reduce compliance risks.

You can read more about how the ARM ecosystem works and how it transforms collections in our complimentary eBook “The ARM Ecosystem: Advancing Beyond Integration.” Download your free copy today.

 

Don’t miss these other posts in the ARM Ecosystem series:

 

For more insights and tips you can use to accelerate your success in the ARM market, subscribe to the OS blog. We’ll deliver high-value content straight to your inbox.

 

Boost collections. Lower costs. Close compliance gaps.

Your approach to innovation may be hindering your success. Download “The ARM Ecosystem: Advancing Beyond Integration” and learn what a holistic, seamless collections operation can do for you.

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2020 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

Don’t Miss Your Opportunity to Automate These 3 Parts of Your Account Workflow

Don’t Miss Your Opportunity to Automate These 3 Parts of Your Account Workflow

 

Now that you’ve run your A/B testing, listened to your agents, and established clear account segments, it’s time for the real automation to begin.

Using these three methods to identify your best tactics (analyzing them from day 3 through 96 for example), you should be able to identify some key account triggers that push your treatments forward. For example:

  • Does a group of accounts warrant a certain letter or a certain call? What comes afterward?
  • At what point do you consider an exhaust treatment on an account?
  • When do you opt to extend settlement, and what terms do you offer?
  • When and under what conditions do you pursue legal?

Free up time to monitor how each of these choices perform, then repeat as necessary and carry out analysis again. Doing so will give you the best idea of which practices are your best ones, and where you should place your focus as you establish efficient workflow.

You will likely find three factors don’t need a manual touch for optimization:

  1. Distribution of account placement
    When you bring in a group of accounts from a creditor, how are you distributing them to your agents? Demographic information, scoring, balance ranges, and account types are all common metrics that inform which agents work which groups. For example, if you conduct an account analysis and see Collector A is particularly good with a certain demographic, your technology should be able to automatically place that account into their work queue – You may have millennial agents work millennial accounts, for example. Pooling can also be completed automatically, grouping a certain type of account for collectors to work as a team. Analytics drive this process, and you should pay close attention to how frequently each type of account gets worked, and by whom.
  2. Initial account treatment
    When an account enters your system, do you send a letter or make a phone call right away? Making a phone call before letters are sent may save you a significant amount on letter costs, but be careful to ensure those letters are going out accurately, and on-time while maintaining compliance. Either of these paths can be automated. Based on the outcome of an attempt, you can then gauge the success or failure and take the next action. No response to a letter? Make a series of phone attempts, rotating through daytime, evening, and weekend attempts to known phones. Still no contact? Consider additional skiptrace efforts. Point being, your system should be able to decide automatically what the next appropriate action is, take that action, return an automated response, and build appropriate work queues for your agents’ manual efforts.
  3. Running reports as time goes on
    As you continue your efforts, your system should tell you what’s working and what isn’t. Ask yourself how you’re measuring, assessing and making changes to your account treatments – If a group of accounts are stuck in a workflow of a phone call every week, or a letter every month, and nothing’s happening, what changes do you need to make? Your exhaust strategy is an important part of an account’s workflow: If you’ve made four or five contact attempts to no avail, then your reports should show that failure, and move an account to a manual pool before possibly taking it out of the system entirely. Late-stage score and skiptrace requests can also be made automatically. Your system should automatically review these attempts and make decisions about the next treatment.

Products like our Artiva RM, RevQ, and TCS solutions all have capabilities to perform these automated account treatments, and optimize the inventory you have in your system. What opportunities are you missing? And how many more accounts could you work by setting up these low-touch workflows?

 

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2017 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

Use These 3 Methods to Make Your Best Account Tactics Your Only Tactics

Use These 3 Methods to Make Your Best Account Tactics Your Only Tactics

 

Your organization’s workflows are likely automated to the point that your agents may not be making many decisions about account treatment – But those they do make have a big impact.

Most agencies determine workflow before accounts are placed and set up in a software platform. And those decisions are often based on successful practices discovered in other lines of business.

For example:

  • Is sending a third letter after the first and second effective? Is it never effective? What are the conditions affecting results?
  • With what account segments does that extra work become meaningful?
  • Are different kinds of work more effective? Do letters get better results than phone calls to a certain group of accounts?

In other words: Which treatments are the right ones to apply to a given set of accounts? How do you find out?

Identifying proper tactics for more efficient operations first relies on analytical skills, and your use of reports, dashboards, and other tools to discover what’s working well and what isn’t. And if you’ve used many different account workflows, and automated them, chances are you have a lot of data to work with.

By treating your data like a trusted advisor and asking it questions, you will very likely discover there is not a single “best practice” when it comes to treating accounts. Some portions of your portfolio will answer your questions differently. For example, you might find a third letter might be twice as effective with one client’s accounts as it is with your average portfolio. Or for accounts over 180 days old, a renewed phone calling campaign might be more effective than a third letter. Perhaps accounts of a certain balance warrant a late stage score and skiptrace effort.

But if you’ve only used a single workflow in the past, this data might be hard to come by. In that case, it may be more effective to ask what little data you have to point you toward your most effective agents within each segment of your portfolio.

If you are not sure where to start, try these 3 tactics:

  1. A/B Testing. Find two batches of accounts that look particularly similar – in lines of business, demographics, score, age, etc. – and separate them, so they can be logged and analyzed apart from one another. If you haven’t done so already, create these batches with an alpha sort on a client assignment. Then, discuss possible treatment among your managers and agents for these kinds of accounts, design workflows for each, and test them. Try sending a letter both before a phone call, or on contact. Try more frequent phone calls with one group than the other. Try changes in caller ID for those calls. Try setting a schedule on one group that calls for three weeks, then stops for three weeks, then comes back for three weeks. When the trial is over, compare the results. How is each batch performing and liquidating? Are the results different than expected? Why?
  2. Give ownership to your best agents. Take one of these segments, and distribute the accounts among your agents. Set automation to ensure compliance and minimum SLAs are met. Establish workflow ceiling and floor rules, and let your agents work within these guidelines, determining the best course of action. Then, review their tactics, and tie them to results. Your best agents will be able to identify weaknesses in the workflow you’ve designed, and inform its refinement. The most effective tactics uncovered can then be set in workflow automation for all agents to follow.
  3. Focus on segmentation. Many agencies fail to place a special focus on clearly delineating treatment for particular groups of accounts, doing so broadly, or not at all. Different account segments very likely deserve different account treatment, perhaps even by different agents. One group of agents might be particularly adept at handling 365 day and older medical accounts, for example, while another might be better on student loans. Segmenting your account inventory makes this process far more efficient. Segmentation can be applied on a much more granular scale than simple business class – retail, medical, student loan, auto deficiency etc. There are very likely unique account segments within each of these lines of business, and they may overlap between each. Scoring is one way to segment across business class. Your own analytics will show you other criteria as well, including previous payers, consumers with a higher than normal number of accounts, geographic regions, age of accounts, and more.

Your system and your agents can tell you a lot. Become acquainted with both, learn how to better apply the skills with which your people are adept, and identify accounts that pay. Becoming close with all these important criteria can lead to big gains for any receivables operation. Enlisting your agents not only provides operational insight, but staffing know-how. That knowledge will ultimately allow you to marry your account analytics to your staff analytics and get the best accounts to each agent.

 

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2017 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

These 6 Progressions in Telephony and Compliance Could Define Your Receivables This Year

So, we’re more than 6 weeks into 2017. We have a new administration developing in the Federal government, new industry challenges to tackle, and new tools to meet them. The time has come to discuss which developments really matter to our industry, and where to place our attention and resources as the year goes on.

Take some time this week to gather an inventory of the resources available at your disposal. Then, consider these important issues that will define the receivables landscape in the coming months:

  1. New CFPB Guidance and Perspective: In June of 2016, the CFPB released its Small Business Regulatory Enforcement Act (SBREFA) outline, providing the industry with a clear view of reforms the Bureau will seek this year. Many unknowns still exist, but at the very least the CFPB has provided us with some interesting perspectives on the trajectory of consumer contact they’re attempting to influence. Items like; a new “Statement of Rights,” limits on contact attempts to both the consumer and their related parties, and a new contact category called “Confirmed Consumer Contact” may all come to bear on contact management within ARM, healthcare and government receivables in 2017.
  2. The Critical Nature of Security: Data security has become a top-of-mind issue nationwide not only for business owners, but for consumers. We saw its influence during the 2016 election, we’re constantly reminded of identity theft’s influence on e-commerce, and high-profile data breaches – when they occur – make headlines both online and in print. Data security is critical to the success of any organization, but as time passes it becomes even more critical to those in accounts receivable management. New regulations, guidelines and standards are popping up regularly to keep up with the discipline’s evolution, and many will struggle to keep up. Belief in your security and passing a third-party audit for compliance are very different.However, data security isn’t a single set of checkboxes against which to compare yourself. Why isn’t security compliance a clearly-defined issue? Because its practice depends on the vertical you serve. Rules regarding data security of medical records differ from government rules, which differ from debt buying. Circumstance and mitigating controls have an influence too. Sometimes guidance and case law even seem to conflict. As you seek to navigate your security practices this year you’ll find some items to be cut and dry, and others a matter of risk tolerance – But being able to tell the difference, and how to respond will be a critical factor in success.
  3. Big Data Coming to Bear: How many accounts do you manage in your system? Thousands? Millions? Tens of Millions? Are you able to identify out of that inventory which accounts are involved in complaints or disputes? Which should warrant additional collection efforts and which should receive less? These are questions at which the concept of Big Data has hinted, but in 2017 will become real, and pressing. Increasingly, analytics are less about liquidation rates, and more about predicting consumer behavior. Receivables managers need to know what data they have at their disposal, and what questions to ask of that data to better manage their portfolios and workflows.
  4. Telephony in the Cloud: Telephony has been at the center of compliance for a very long time. Regardless of the collection vertical you serve, you are subject to the TCPA and a host of other regulations regarding your telephone usage – An issue that should be at the core of your analytics. The industry has moved quickly to the cloud, and continues to push in that direction as premise-based hardware ages and comes due for replacement. The issues above that we’ve discussed already all apply as you navigate your business’s needs this year – But those who address them will find major rewards in the form of lower ownership costs, better service reliability and security.
  5. Call Recording Made Standard: There was once a time when very few agencies recorded calls – Today, very few don’t. Call recordings can be not only a tremendous asset in protecting your business from litigation, but a boon to your training programs, a checkpoint for your clients, and a useful aid to quality assurance. Many receivables managers overlook the sensitive and private information their call recordings contain, including PII, PHI, FTI and PCI data, along with the rules that govern whether they should or shouldn’t be stored in the first place. If you’re already recording your calls, make sure you’re aware of the standards to which you’re being held. If you’re not, make sure you’re aware of the advantages you’re foregoing.
  6. Handling and Optimizing Fractured Communication: Interest in consumer communication practices is at an all-time high. DNC voter polling shows less than 1% of people with landline phones answer them for a survey, further highlighting the fact that their answer rates have dropped sharply across most demographics and verticals. Cell phone answer rates certainly haven’t filled that gap. And yet consumers today are more connected than ever, commonly using 5 or 6 communication channels a day, or – depending on demographic – as many as 9 or 10. Texting, email, and web portals all need to become common considerations for collection efforts, along with their required compliance practices.But that doesn’t mean jumping right into the deep end of the pool. Texting as a collection tool has increased recently, for example, despite declining use by US consumers since 2011, largely believed to be because of apps like Snapchat, WhatsApp and Facebook Messenger. Email use continues to increase, but growth has been sluggish. Agencies in the early stages of collections report as much as 30% of their payments coming through portals, but electronic payment standards confuse and stymie many attempts to adopt them. So as a whole, multi-modal communication with consumers still requires careful thought and consideration before it’s put into practice.

Taken together, these progressions in telephony and compliance put a lot of power in your hands. Evolved technology, while fraught with potential legal and security pitfalls, has the potential not only to provide new options for communication, but new ways to learn about consumer preferences, share documents, and gather consent. In turn, that means new opportunities for advanced analytics that can help offices like yours develop better and more profitable communication strategies. Take the opportunity to seize on them this year.

 

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies. 

© 2017 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.