Our main objective is to gain an understanding of how financial institutions handle their receivables portfolios. We share this knowledge with our esteemed Clients and potential business partners to offer them a glimpse into how their peers manage their receivables portfolios.  Moreover, we aim to inform decision-makers on ways to remain competitive in the current economic climate. The findings of this survey can equip financial institutions with effective techniques to decrease costs and boost revenue, all while enhancing collection efforts and remaining competitive.

Utilization of Collection Agencies

58% of the respondents indicated that they currently use less than three (3) collection agencies. Our research has found that financial institutions achieve better outcomes by relying on established relationships with fewer, but higher-performing partners. By consolidating your business with one or two of your top-performing collection agencies, you are guaranteed to increase the percentage you recover for every dollar you spend. Another way to streamline the process is to place your accounts within 6-12 months to optimize collection results. It only makes sense to move accounts to your top-performing partners to begin yielding a higher return more quickly.

Collection Agency Scorecards

It’s surprising to note that 94% of those surveyed indicated that they do not currently share an evaluation or score card with their agencies.

Financial institutions that require their agencies to supply monthly dashboards can proactively monitor established goals and KPIs. This consistent reporting will allow you to recap the year’s successes and identify improvements needed. With the reporting you receive from your agencies you can then create a score card that will allow you to assess your agency partners against each other, allowing you to evaluate their return on investment and the overall value they bring to your organization.

Assigning Accounts to Higher Performing Agencies

A majority of those we surveyed, 51%, place more accounts with collection agencies that produce higher recovery rates.

If you’re looking to improve your collection results, consider consolidating your business with one or two of your top-performing agencies. Since they’re already delivering excellent results, you’ll see an immediate improvement. This consolidation guarantees that you’ll recover more for every dollar you spend, which translates into an instant return on investment, and you can start recovering more right away.

Key Differentiators of Top-Performing Collection Agencies

67% of respondents indicated that their best agencies ensure compliance and exceptional customer service better than any other agency, followed by 59% indicating that their top agencies return the highest recovery results.

These results are not surprising. In such a heavily regulated industry, collection agencies need to prioritize compliance and data security, not only to protect their company, but also to protect your Consumers and ultimately you – the originating creditor.

Amidst a dynamic industry that emphasizes compliance with regulations and intricate data security systems, institutions are faced with a unique set of challenges. As the spotlight on new rules and regulations regarding debt collections and accountability and documentation continues to grow, the burden of protection shifts. Security breaches and their aftermath are costly: The price tag includes notification of affected individuals, investigation, remediation, credit monitoring, and legal expenses – not to mention the intangible cost of branding and reputational damage.

Online Portals

Results show that 39% of respondents use their agency’s portal weekly, whereas 33% use them on a monthly basis. Only 23% use portals on a daily basis.

Many financial institutions prefer their agencies offer 24/7 self-service options that allow them to manage their accounts on their own terms. In the financial services industry, dedicated secure web portals have become the vehicle of choice for customers to place new accounts, oversee existing accounts, make changes and conduct transactions, upload and share documents, and download real-time reports and other helpful resources. Ensuring your agencies offer a robust portal with regular training will be fundamental to successfully managing your collections portfolio.

Conclusion

If you’re looking to implement or enhance your third-party collections strategy, it’s essential to partners with a debt collection agency that prioritizes compliance, customer service, performance strategies, and maintaining a robust and secure Client Web Portal. By focusing on these key factors, financial institutions can establish effective collections process that benefit both their institution and their Consumers.

Contact us today to learn how ConServe can become an extension of your institution and begin helping your Consumers take back control of their finances.

_{This online survey of 106 financial institution leaders was conducted between October 10 – 17, 2023.}

_{1 Urban Institute}