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This story appears in the November 2008 issue of Cards&Payments.
Relatively few card issuers are eager to invest in new technology and risk-management software during one of the worst economic downturns in recent history. Profits are down, and operations are under pressure to cut costs, not rack up new expenses.
But some 25% of the nation's largest consumer lenders, including card issuers, plan to sink funds into new, large-scale collection systems during the next 12 to 18 months, according to a report issued in August by Aite Group, a U.S.-based consultancy.
The latest generation of such systems is designed to integrate early-stage and late-stage collections, loss management, liquidation, bankruptcy, recovery, and all support functions with useful data across lending organizations. Such data might include information about how an account was originated and whether the customer has other loans and deposits with the lender, according to the report.
Costs for such systems are in the millions, but issuers deem the investment necessary for long-term success, the report says.
