If your financial institution works with a third-party vendor for your collections efforts, you know how important it is to ensure your partners perform at an optimal level. The vetting and on-boarding process alone can take months, so the "set it and forget it" mentality could be detrimental to the overall performance of your collections operation. To ensure your outsourced partner performs at a high level, it’s wise to understand their company procedures and establish agreed upon benchmarks to measure their performance.
To help kick your collections machine into overdrive, we've compiled a list of questions you can ask your collections partner.
1. Institute a performance card
In order to set proper expectations and set all vested parties up for success, it's important to establish a measurement tool. A performance card creates a foundation for your financial institution and your vendor to fully understand how the collections program is being measured. Maybe you measure the success of the program on the number of monthly calls made by the collections team. Or perhaps your idea of a successful program is the number of early or mid-stage payments collected. Whatever the metric, it should be clearly stated (in writing) so there’s little room for miscommunicationwhen it comes to your collections strategy, goals, and overall program performance.
The best place to start is by having a conversation with your vendor's primary contact. This is typically an account manager or business development officer. You will work closely with your rep to outline the performance card. If you already have an outsourced collection provider executing services on your behalf, it's not too late to establish a performance card. This organization is contacting your borrowers on your behalf, so it's important to ensure the performance metrics that are important to you are being met.
2. Evaluate your collection vendor's quality assurance process
Every organization has worth its salt has established quality assurance processes. Because their reputation is contingent on how they perform, they will invest in a number of quality assurance workflows. To help you evaluate your partner's process, ask them these questions:
What percentage of calls are reviewed by the management team and how often are these reviews conducted?
Is there an established feedback process and what does it entail?
Is there a documentation process for collection calls?
How and how often is borrower feedback distributed back to your institution?
The goal here is to determine if your vendor is continuously looking for ways to improve their processes in order to guarantee the best service and performance.
3. Evaluate your collection vendor's training process
A well-established training program is critical to the success and compliance of a collections operation. Since the type and frequency of training the collections staff gets directly impacts your borrowers, having a high-level understanding of the program is important. Three questions you can ask to help you better understand the training process include:
1. How long is your training program and how is it structured?
At SWBC, we believe the best way to structure a training program is with a blended approach that includes both classroom and hands-on training. Our training programs typically last several weeks before collectors are placed on phones, under direct supervision. It's a best practice to find out how your chosen vendor handles their training program.
2. How is compliance training administered?
Compliance is an on-going challenge for most financial institutions. With something as regulation-intense as collections, it's important that you understand how your collections partner administers compliance training to their staff. Compliance should not be a quick review, but rather in-depth so that their staff understands the importance of remaining compliant with the necessary regulations.
3. Do you have ongoing training for your staff?
In an industry such as collections where regulations and consumer behavior are constantly shifting, it's important to work with vendors that are agile and consistently seeking opportunities to learn industry best practices. Ask your partner if they have ongoing training, how often, and if they monitor the latest compliance bulletins for industry updates.
4. Ask about ongoing program monitoring
Most financial institution executives spend a fair amount of time evaluating their partners' performance, but it's also important to work with a collections provider that proactively monitors and reports on their program's performance. Added value such as monthly status reports can help you identify data trends in order to make program tweaks, creating efficiencies. Likewise, a great partner will have tools and systems in place that allow you to self-serve, accessing highly visual, customized reports that give you the data that is most important to your institution.