Understanding The Importance of Automated Debt Collection Software

Automated debt collection software fills the current need for most banks and credit unions dealing with debt collection issues. Customer payment default has become more common triggering an increase in personal, business owner, and company debts. Efforts for debt recovery have made credit unions and banks more vulnerable to scrutiny. Government regulations have led to automated debt collections. Automated software increases the capacity of collections for overdue debts and invoices while improving customer relationships with predictive analytics and automation tools.

Automated Debt Collection Management

This type of system uses new technology for debt collection to automate, streamline and customize most collection processes. Credit unions and banks leverage this technology to collect past due debts. Full automation eliminates most repetitive collection tasks. Steps required for collection are ensured, streamlined, and simplified with documented reports.

How Are Collections Increased with Automated Debt Collection?

Collections for credit unions and banks must be in compliance with strict state and federal regulations. Required actions can be enforced to increase collections through automation including:

  • Preventing or performing recovery actions
  • Maintaining detailed reports and documents
  • Ensuring consistent compliance with internal and government banking systems

SMS Collections

Debtor payments are automated to provide pay-now links by sending texts and SMS messages. Software programs make certain debt collectors are only communicating with client attorneys as opposed to the clients for those filing bankruptcy. Debt collection programs can effectively:

  • Eliminate improper steps, documentation, and reports
  • Notify clients in advance regarding payments due and billing
  • Maintain client relationships with customized payment plans
  • Enable regular reminders

The need for automated collection systems is increasing due to CFPB regulations for credit unions and banks.

Benefits of Automated Software for Debt Collection

Debtors can be provided with payment links through email or automated voicemails. Debt collection software is a data management solution and good business strategy ensuring technology can be leveraged to achieve the desired results. The additional benefits include:

  • Decreasing costs
  • Improved compliance
  • Increasing account manageability
  • Eliminating the risk of not complying with regulations
  • Streamlining debt collector tasks to increase productivity
  • Growth of financial institutions
  • Simplifying training for temporary staff and new debt collectors
  • Supporting collection procedures and policies
  • Use of numerous collection channels
  • Ensuring debtor payments are simpler
  • Organizing and sequencing work
  • Improving collector effectiveness and efficiency
  • Assigning accounts and debt types

Features of Automated Collection Software

This software serves as an automated collection system capable of sorting debtor accounts according to risk, collectability, and contact ability. Collectors can run analytics and perform customer segmentation based on different scenarios. Financial institutions can assign collectors according to experience and skill. Automated debt collection combines accounts from multiple systems.

Collectors then gain a better understanding of the debtor relationship so they can influence their collection strategies. Information can be obtained from external sources to minimize manual research responsibilities. Communications can be integrated and interfaced with vendor resources while ensuring accuracy and eliminating human error.

The Difference Between Automated Debt Collection Software

There is a wide range of collection systems, advanced analytics, and artificial intelligence tools available. There are several reasons North American financial institution debt collections are unique including the regular scrutiny of business processes and critical documents, the number of debt, and the overall size. Collection agencies also maintain customer relationships for the long term.

Certain software is designed to support unique debt collection needs through automation. Industry experts have created a software with simpler installation to support vendor relationships for the future. Certain systems are for specific types of debt including mortgages, credit cards, and loans. Seamless integration is possible with all core banking systems.

The users receive the power to use fewer employees and spend less time increasing account capacity and recovering more money. Financial institutions can collect past due invoices efficiently while improving client engagement. Bankers do not need to purchase expensive equipment to access files within the system. These systems are compatible with industry standards and technology including:

  • Microsoft Windows
  • Microsoft SQL Server database
  • Generic browsers

Clients are able to access unlimited reports with all account types and debtor contacts automatically imported for every account servicing system. Real-time integration and standard interfaces are enabled with the majority of core account providers. Streamlined communications are enabled through communication channels including SMS texts, letters, emails and mobile phones.

Accounts are consolidated from multiple platforms offering a single collection solution. Collectors can view all accounts receivable and debtors while monitoring status changes including litigation, liens, and bankruptcy. Data screens can be configured, work organized, and customized reports generated. Debtors can make payments by phone immediately 24/7.

Skip trace inquiries are leveraged and integrated including bankruptcy monitoring, collection scores, deceased records, car and property details, liens and judgments, phone numbers, and addresses. A robust library is provided for creating ad hoc and standard reports. Client data can be configured using fully automated data screens, standard history notes, workflows, standard ticklers, and letters.

Data can be updated through non-core, external sources including collateral appraisals, skip traces, and third-party services.