Unfortunately, a certain percentage of accounts eventually going delinquent is an inherited problem for financial institutions in the lending industry. Delinquent accounts can become expensive, time-consuming issues for your institution, especially when you do not have the proper resources in place to handle them. For some institutions, the best solution for this issue might be one you haven’t yet considered: outsourcing. Here are the 3 best reasons to choose an outsourced collection service:
Reduced Collections Costs Between proper staffing and expensive collection technology, collections can become a pricey proposition for your institution. This is especially true in a time when proper staffing levels are increasingly difficult to maintain, and hiring has become an arduous task. Besides rising salary demands, there are also the costs of employer paid benefits, payroll taxes, and of course the inherent cost of hiring and training. With an outsourced service solution, your institution will avoid all of this. Instead, you will only be charged on a per-account basis, meaning your collection cost will be strictly related to your delinquency levels. You will also avoid the costly expense of collection technology itself, utilizing your partner’s technology while having full access to view account activity and report generation
Ensured Collections Compliance The rules and regulations when it comes to collections are some of the fastest evolving compliance measures in the banking world. It seems as if the CFPB is making monthly updates to what are compliant practices and what are not, how collectors can communicate with borrowers, collection timelines, etc.. These updates can be difficult to keep up with, and noncompliance with them can result in extremely harsh financial penalties for lenders. Partnering with a professional collections partner is a way of guaranteeing your institution will not fall out of compliance with federal and state collection mandates, as it is their job to stay on top of them. This kind of peace of mind is one less thing for your institution (and compliance department) to have to worry about.
Scalability Partnering with an outsourced collection service is a way to ensure your institution maintains effortless flexibility in the collections space. Whether your concern is the rise and fall of delinquency rates over time, or you are looking to expand your lending volume that would likely result in increased delinquent accounts, you will have a partner in place that can handle this for you. You will never have to worry about hiring additional staff if your current team becomes stressed or being overstaffed and paying employees for down time when delinquency rates drop. You will not have to purchase software updates and additional licenses as you add collection agents or pay for unused licenses if your staff is reduced. Instead, you can just simply continue paying per delinquent account worked.
The most important thing to consider after making the decision to outsource collections is choosing the correct partner. While many collections outsourcing companies operate in a call center warehouse environment often located overseas, Coastal Outsourced Solutions provides a more personalized touch with our team of professional agents located here in Massachusetts. We pride ourselves on acting not just as an outsource service, but as a partner and extension of your institution. Rather than simply dialing for dollars, our agents take the time to learn your borrower’s story, providing education and next steps to them to ensure the best outcome for them, as well as your institution. Coastal Outsourced Solutions will also build a custom collections plan for your institution, ensuring you are only paying for the services you need.
Contact us today to learn more about how outsourcing could be the correct answer for you.
– Richard Fernandes