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Is your organisation using the right collections software? 8 APRIL 2021

Is your organisation using the right collections software?
5 minute read

A collection system, at its very heart, is workflow and decisioning, with the ability to manage the entire customer journey throughout the credit lifecycle; this includes not only agent interaction, but also all customer contact channels, overlaid by the organisation’s policy and compliance measures to ensure everything they are doing is within the guard rails of their operating model.

Collections systems have different levels of sophistication; they can provide a comprehensive suite of capabilities to help manage the customer throughout the entire credit lifecycle, or they can be simple bolt-on products that integrate with other existing solutions.

The collections systems market was historically dominated by a number of established players and typically those were the go-to providers for our clients. However, owing largely to a lower cost of entry and the ability to build on more modern technology infrastructures, in recent years the market has opened up significantly, meaning there is more capability on offer than ever before. This boom in the market over the last decade has made it increasingly difficult for creditors to choose the right collections system for their organisation. So, how do you know if you’re using the best system for you?

What makes a system the right system?

The right collections system for an organisation is the one that aligns most closely to their key considerations and what they need, and what’s right for one will not necessarily be right for another.

There are a number of different factors to take into account when selecting your collections system, as the current market has upwards of 30 key vendors.

Arum uses a framework to bring the viable options down to five or six that closely match a client’s needs, including:

  • What are your hosting preferences?
  • How does your service model fit together?
  • What is your costing model?
  • What specific elements of capability do you need?
  • Do you need a system of record?
  • Do you need third-party integration?
  • What will the system need to integrate with?
  • Are self-service channels available or needed?
  • Will you want all services in-house or do you need managed service support?
  • What is your target operating model?
  • How much do you have to spend?
  • What is the use case?
  • Can any of your existing systems integrate with the new technology?

The right system for you will always be the one that matches your needs best, rather than the one with the best rating or price.

What are the benefits of having the right system?

The benefits of having the right system can be easily identified when comparing the systems’ usage with the business case:

  1. Cost reduction - having the right system in place can result in significant cost reduction and better allocation of expenditure as a result of automating processes and providing an efficient user interface and experience.
  2. Increased efficiency - the right system will also greatly increase efficiency, a benefit that grows as your team becomes increasingly familiar and capable.
  3. Earlier cash collection - you also gain the benefit of having better processes in place and collecting cash earlier, which will have a knock-on effect, allowing you to collect more cash in general.
  4. Improved customer experience – you should see some unexpected benefits such as better customer loyalty gained through better customer experience. This is a result of the chosen system being able to better deal with customer contact and management.
  5. Regulatory compliance – you could expect regulatory benefits in the way of reducing regulatory and compliance risk, ultimately reducing the risk of fines and issues of non-compliance.
  6. Better IT support – if you decide to choose a SaaS (Software as a Service) or cloud-hosted solution, you may also see a reduction in your IT costs and cost to services, alongside regular updates ensuring you are on the best version of the software, and continuous insight and support from the vendor.

What is the risk of having the wrong system in place?

At Arum, we have noticed during the pandemic that there is a need for organisations to be able to quickly implement new champion and challenger strategies, as well as continuously improve and be able to react to the rapidly changing business environment. This is easily enabled through a modern and flexible system.

With the wrong system this ability is inhibited, but worse than that, it invites situations in which organisations are not servicing their customers correctly, creating ‘black holes’. This means that the customer is not getting treated in the way they should be, as outlined by the regulations and the organisation’s policy. This can inevitably lead to regulatory breaches and fines.

In terms of having legacy infrastructure, there is a risk that comes from the lack of real-time support and decisioning which inhibits what you can do within that digital and omnichannel self-service strategy as you are limited by the processing that can occur. Customers expect a fully digital 24/7 process that can only be facilitated through real-time decisions, integration and high availability.

Ultimately, having the wrong system can severely inhibit a client’s growth and ability to properly manage their customers in an efficient and effective way.

What can Arum do to help?

Arum is the leading independent provider of IT & programme delivery for third-party credit, collections and recoveries software, we have worked with over 30 system vendors including FICO, Qualco, Exus, Debtrak Katabat, Oracle, Experian, CGI and more. We offer End-to-end management of selection, implementation and optimisation of all leading collections and recoveries software and can help you make sure you have the right system. Additionally, we can train your staff to make sure you are getting the most out of your system and provide a host of complimentary services to help support your IT and collections operations.

Matt Riddall
Director of Advisory

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