Four Strategies for Tuning Up Your Outsourced Collections Machine

smiling mechanic tunes up a car engine
By Brad Young

4 minutes

Ensure your partner continues performing at an optimal level.

Sponsored by SWBC

If your credit union has outsourced its collections tasks, you more than likely understand the process of vetting potential vendor partners, selecting a partner and the ever-so-fun implementation process. Often, institutions and vendors set and forget, meaning once they go through the initial set up of the operation, the institution will leave the outsourced collector alone and vice versa. To keep your outsourced collector performing at a high level for your institution, it’s best to establish a few benchmarks and understand their processes to ensure your vendor partner continues performing at an optimal level. 

Here are four best practices and questions to consider asking your outsourced collections team.

1. Establish a performance card for collectors.

Setting up all parties for success requires a measurement tool. By creating a performance card, you create a foundation for your institution and its collector to fully understand how the collections program is being measured by each party. Is your measure of success the number of calls made per day or month, how many payments are collected in early or mid-stage collections or something else? With each metric clearly stated (preferably in writing), there’s little room for miscommunication when it comes to your collections strategy, goals and overall program performance. 

Not sure where to begin? Start by having a conversation with your vendor’s representative to begin outlining the performance card. If your outsourced collections vendor is already executing its contract and a performance card wasn’t established—ask why not. Work to keep your vendor working for you. At the end of the day, they’re contacting your borrowers on your institution’s behalf.

2. Understand your collections vendor’s quality assurance workflow.

As we’ve noted, outsourced collectors are often established and then left alone to operate. Remember, because they’re acting on your financial institution’s behalf, knowing how your collector monitors its own performance will help you rest easy at night. A few questions you could ask your vendor regarding its quality assurance process include:

  • What percentage of collections calls are reviewed by supervisors or managers? How often are these reviews done?
  • What’s the feedback process for the vendor’s collector?
  • What’s the process for documenting collections calls, and how do we receive feedback from our members?

Your vendor should be able to answer these questions rather quickly. If your vendor is continually self-evaluating its representatives, it generally means they are striving for the highest quality possible. 

3. Establish a training process.

Without proper training, an outsourced collector will not be an effective extension of your credit union. First, be sure your vendor has a training process in place. Next, make sure you have a high-level understanding of that training program. You may want to ask a few questions to get a better sense of the program and how the training your outsourced collector receives impacts the service your members are getting. Here are a couple of questions to consider asking:

  • What’s the length of your training program and how is it structured? 
    • An outsourced collections partner should have a blended training program that incorporates classroom and hands-on learning. Typically, training programs last several weeks before a collector is placed on the phones, under direct supervision. 
  • How do you train for compliance?
    • Gaining an understanding of how compliance training is administered will help you feel at ease as your vendor works on your behalf. Compliance training shouldn’t be a quick review. Your vendor should incorporate in-depth compliance training to ensure the representative knows the significant impact of not following specific Telephone Consumer Protection Act and Fair Debt Collection Practices Act requirements.
  • Is there an ongoing training process for collectors?
    • Again, going back to the mindset of set and forget can be troublesome in the ever-changing world of compliance and collections. Your outsourced collections vendor should have opportunities for collectors to continually learn new industry best practices and receive updates on the latest compliance bulletins.

4. Proactively monitor your collections program.

Many credit union leaders, like yourself, are probably already actively monitoring the institution’s collections programs. Awesome job! However, does your outsourced collections vendor proactively monitor for you as well? It’s best to find a vendor partner that will provide added value by reviewing your program’s status monthly. Regular reviews can lead to finding trends in the data, helping to make program tweaks with the intent of creating efficiencies.

Consider how easy it is to pull reports, see account-level details, and gain visual insight through charts and graphs to take a quick pulse of your collections program. An outsourced collections partner should have systems in place that allow you to immediately gain access to your program’s performance at any time. 

Like a finely-tuned machine, getting the best performance out of your outsourced collections team requires asking the right questions and having an understanding of collections best practices. 

Brad Young is EVP/AutoPilot services for CUES Supplier member SWBC, San Antonio, Texas. To learn how outsourced collections can contribute to a holistic approach to risk management, download our free ebook, The Recipe for Risk Management

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