Case study: Accomplishing four major business goals by outsourcing collections
Sponsored by CUES Supplier member SWBC
Partners Federal Credit Union, Burbank, California, was founded over 50 years ago to serve employees of the Walt Disney Company and their families. The CU’s first office was a couple of rooms behind the camera shop on Main Street at Disneyland Park, but it has grown over the decades to a credit union with $1.8 billion in assets, 13 branches and more than 170,000 members across the country.
When inefficiencies in a collections operation exist, one of the major challenges is a streamlined and accurate way to deal with mounting queues. Before collaborating with CUES Supplier member SWBC, San Antonio, Texas, for outsourced collections, Partners FCU did not have an efficient way to handle a growing increase in delinquencies specific to its indirect loan portfolio. Collectors’ queues were becoming unmanageable and they were not able to handle calling on 30-plus accounts daily. The CU realized it needed to do something to reduce delinquencies and the time employees were dedicating to the collections process.
After Partners FCU started using SWBC’s outsourced collections services, it was able to accomplish four main business goals through the partnership.
1. Deployed cost-effective collections strategy using scalable and technology-rich solutions
Taking advantage of scalability to save on costs, SWBC deployed its collections personnel and resources to accommodate the ebbs and flows of the delinquent queues without being under or over-staffed at any one time. In addition, SWBC integrated a high percentage of part-time resources within its staffing model, further reducing the cost. SWBC utilized robust telephony and dialer technology to facilitate timely collections, allowing Partners FCU to reap all of the benefits of advanced technology without the expense of purchasing and implementing it internally.
2. Quickly reduced delinquencies month after month
Because SWBC employs professionals who specialize in collecting, Partners FCU essentially gained a full-time staff of employees dedicated to recovering past-due funds on their behalf, during and outside of Partners FCU’s typical working hours.
The SWBC collections team was able to step in and get the job done efficiently because it knows the best practices for collecting funds and has the experience and patience to handle situations that may arise in a professional, courteous manner. SWBC’s collectors also know the best (and most compliant) tactics for getting delinquent accounts up to date before they progress into the later stages of delinquency management.
3. Dramatically reduced collectors’ queue sizes
Partners FCU’s staffing model before outsourcing consisted of a few staff members focusing only a portion of their time on collecting delinquent accounts, allowing some to fall through the cracks and become extremely past due. The time their employees spent working in a collections capacity meant time not spent selling or generating new revenue.
When Partners FCU started outsourcing its collections efforts, it gained access to SWBC’s external staff of employees that were able to dedicate 100% of their time to collections efforts and get accounts cured as quickly as possible. This increased focus created a consistently shorter collections cycle and reduced the time spent collecting on a delinquent account.
4. Increased successful collections rates, reducing the volume of repossessions by 50%
SWBC was able to utilize resources in staffing and technology to help Partners FCU increase its collections rates, effectively decreasing the volume of repossessions by 50%. This helped improve both the CU’s balance sheet and its bottom line.
SWBC’s dialer typically sends more than 100 calls an hour. Partners FCU’s more manual environment gets through about 25. SWBC’s team of collectors was able to make more calls per hour, creating more opportunities to talk to borrowers and more opportunities to cure the loan. With these improved efficiencies, Partners FCU was able to collect on more loans.
When asked about their experience working with SWBC, Jerad Broaddus, VP/loan services at Partners FCU had this to say:
“SWBC is easy to do business with, responsive to expressed needs and is a scalable solution. Thanks to our partnership, our delinquencies are currently sitting at a 10-year low. Our collectors experienced a dramatic reduction in their queue sizes, resulting in reduced workload, improved efficiency and less collector burnout.”
John DeLuccia is account vice president at CUES Supplier member SWBC, San Antonio, Texas. Have you evaluated your credit union’s collections operation lately? Take our self-assessment, A Guide to Auditing Your In-House Collections.