Who wants to play … Debt Collection Strategy Training?

Realizing that the typical PowerPoint-delivered company training session tends to put people to sleep, financial firms are using technology-enabled role-playing exercises that incorporate gaming tactics as a way to reinvigorate training. Just this week, Bank Technology News has learned of two such emerging programs targeting the debt collection industry.

San Diego-based BankersLab introduced Tuesday CollectionLab, a training product that uses simulation and games to help bank participants improve their collection approaches and better understand what variables drive good decisions when collecting delinquent debt. The course, which is targeted toward middle management and senior professional bankers, takes place in person but relies on software to train students.

Participating students break off into smaller teams that compete against one another in interacting with data and interpreting trends in hopes of operating the most profitable virtual bank while also gaining the most satisfied customers. CollectionLab, which runs for several days, focuses on collection management, including topics like staffing, resource allocation, economic stress and product growth. To put it simply: It's like a flight simulator but for bankers.

"It's a better way to approach learning — having people figure out the answers for themselves," Gail Galuppo, COO, says.

An example of a CollectionLab exercise would go something like this: Based on data like a credit score range, a player decides which collection treatment to use for a delinquent account, such as calling the debtor or making an in-person visit. Once a decision is made, a player can graph out how many accounts they lost or retained, receivables balances and cumulative net income over the course of 24 months. Too aggressive treatment for customers with high bureau scores will lead to early pay-off of balance and too weak treatment will cause more write-offs for those with low scores. The game is meant to help a player better juggle risk and reward in a safe environment as well as see the results of their decisions during the program, rather than having to wait a year or two like the employees would have to do in their actual line of work.

"Our training lets them build real-world training," Galuppo says.

BankersLab was founded in the U.S. earlier this year. Fullerton India Credit Company Limited, a BankersLab client, is evaluating CollectionLab.

Meanwhile, a debt collection trade association is also readying a gamified simulation program, but gearing the offering's content toward entry-level third-party debt collectors. The offering is expected to hit early next year.

"Gaming really plays a big role in education going forward," says Jessica Hartmann, senior director of Campus ACA at ACA International. "People learn by doing."

The forthcoming program from ACA International will have a collector student sign onto an online system and run through a series of simulated calls that test his ability to collect debt correctly. The calls correspond to the trade association's existing course entitled "Essential Collection Skills & Techniques," which explores topics like best practices when opening a call with a debtor. Throughout the simulated calls, the collector will have questions they must properly answer in order to move the call forward.

"It's a way for a collector to put into practice and apply what they are learning," says Hartmann. "Every response a collector uses will branch them off into a different conversation."

Though Hartmann has seen examples of such tools existing for human resource efforts or for training bank tellers on how to identify fraudulent checks, she says the technology hasn't been widely used to coach collectors yet.

"Trainers in the collection industry have been using interactive role playing in their classroom training programs forever," says Hartmann. "The technology available today allows us to take role playing to the next level."

ACA's program will be set up as an individualized program where a collector competes against himself because "that's the environment [a collector] will be working in," Hartmann says.

Whether ACA offers a program for more senior level collectors is unknown for now.

Meanwhile, BankersLab plans to continue to introduce credit risk-related training products to the market. In the pipeline are programs that will relate to payments.

SimArch also offers simulation training to the banking industry.