Members won't pay? It's getting easier to fix that
April 22, 2019 4:19 PM
How has technology disrupted collections?
Technology has changed and disrupted many industries, so why not credit union collections departments? At the recent 2019 annual conference for the National Credit Union Collections Alliance in Las Vegas, Credit Union Journal asked attendees how their job has evolved in recent years due to advancements in technology. Read on for their responses.
Art Sookazian, VP of collections and risk management, $970 million Los Angeles FCU, Glendale, Calif.
The technology is available, but a lot of it is on mobile, so regulations make using some of it problematic. We get more responses to text messages than other forms of communication, but with the [Telephone Consumer Protection Act] there are fines if the members are not opted in. The core of collections is negotiating and strategy, so we are working with our vendors to make our collectors more efficient. With risk-based scoring, we can spot a group of loans that are more likely to default. We also use predictive modeling and credit migration. A 700 credit score sounds like a good score, but if it was 800 a year ago, suddenly it is not so good.
There are workflows on repo requests that can be sent out electronically, which means fewer errors than hand-written requests and we get data back on recovery. If you are leveraging data you can drive production. If workflows track promises, collections and other data points, you can see which collectors are performing better. We can track month to month. This creates incentive-based collections.
There are workflows on repo requests that can be sent out electronically, which means fewer errors than hand-written requests and we get data back on recovery. If you are leveraging data you can drive production. If workflows track promises, collections and other data points, you can see which collectors are performing better. We can track month to month. This creates incentive-based collections.
Andres Serrano, collections supervisor, $818 million Frontwave CU, Oceanside, Calif.
Automation is key. The more automation you have in your collections department, the more you can produce. Technology has become a huge part of our operations. We have a repossession agent that scans license plates. If we contract them to locate a vehicle they can find it even if it is in another state. Then there is the ability for members to pay by phone, credit cards, ACH and wires. We can use text messaging both for communication and payment by texting them a link.
Ronald Kurtz, asset recovery manager, $572 million People First FCU, Allentown, Pa.
Thanks to cell phones, we do not have to wait to call people after 5:00 p.m. so we can catch them at home after work. However, with the California Collection Practices Act we have to be very careful with automated calls. More important than the technology is making a connection. I think it is important to talk to people as a member and help understand the situation.
My biggest wish is to have technology to rate my collectors. I want to know how much money each one has collected, and how many of the promises they receive have been kept or broken. I haven’t been able to find anything yet that does all that I want.
My biggest wish is to have technology to rate my collectors. I want to know how much money each one has collected, and how many of the promises they receive have been kept or broken. I haven’t been able to find anything yet that does all that I want.
Alan Salzano, $38 billion State Employees' Credit Union, Raleigh, N.C.
We recently installed collections software and are already starting to see efficiencies. We have 265 branches collecting on loans. Because we are very member-centric, previously the process was done all by hand. With our new system, it presents accounts in a much more organized manner. We don’t have to leave one system to go to another – all of our collection activity is in one system.
Dawn Rogers, collections manager, $1.6 billion Arizona FCU, Phoenix
License plate recognition is huge. Our members take cars to California or Mexico, but thanks to technology we have found many of those. Technology helps us manage our various buckets efficiently, and we can connect people to make payments.
Shannon Stewart, director of risk management, $749 million Southland CU, Los Alamitos, Calif.
For the vantage point of indirect lending, technology allows credit unions to be at the front of loss. Technology has allowed credit unions to lend deeper and be more risky, because they can handle the risk at the back end. Credit unions that are not technology savvy are going to have to be.
