How does technology ensure compliance?

As part of our series on compliance, Patrick O'Neil discusses how technology can ensure compliance.

These days consumers  expect instant access to information, wherever they are. Whether on their desktop or, increasingly, on their smartphone, the answer to any query is only a Google away. This doesn’t generally stop at football scores and celebrity  birthdays, the average consumer has become accustomed to having real-time access to a range of far more useful (if not as interesting) data, such as their bank balance, energy usage and remaining mobile phone minutes, all of which  help them manage their day to day lives.

This doesn’t change once a consumer begins to struggle financially. Understanding, and being able to take advantage of, the technology solutions available in the debt industry provides an opportunity for debt collectors to improve performance and drive a more positive consumer outcome.

Reaching the right person when you contact them, a Right Party Contact (RPC) in industry parlance, is precious and shouldn’t be wasted. We all know that when a consumer raises a query the call can go one of two ways, and a delay in answering queries can risk losing customer engagement and damage the potential call outcome. If it takes a week to provide a copy statement you might never hear from that consumer again! On the other hand, providing the answer to their question, whether through giving the consumer  easy access to the right data, having the data to hand yourself, or by being able to provide actual bills and statements in real time, can make all the difference. Studies have shown an over 10% improvement in cash collections when copy bills are instantly available, and being able to discuss the specifics of the account during the first phone call leads to greater clarity and faster resolution for the consumer.

Consumers expect the person they speak with to have the answers to their questions. Proactively providing this data to the collectors on the front-line should be the norm and be viewed as a performance driving tool, not an afterthought and an operational burden. Doing so will drive the best outcomes for both creditor and consumer.

 

By Patrick O’Neil, Head of Pre-Sales Consulting, TDX Group

 

TDX Graduates: The “Eric the eels” of the debt industry

Having completed my first month as one of the new graduate trainees on the rotational scheme at TDX, I feel like the time is right to write a blog about my experiences to date. After a bit of thought, I felt there was only one thing in my mind that I could write about - being thrown in at the deep end in a fast paced world; immediately learning a lot and contributing to the organisation.

Analogies of Michael Phelps jumped to mind, but at this point I could hardly compare myself to the best in the field. Instead I thought back to the Sydney Olympics in 2000 and a man called Eric Moussambani, better known as Eric the eel, who represented Equatorial Guinea in the 100m freestyle. A man with little experience compared to the others around him, yet given plenty of responsibility, really resonated with me in this instance, as that was me in September.

Fresh out of Swansea University I joined the TDX advisory team, with limited experience. Within days of starting I had been given my first project, where I would take the lead reviewing an internal process with support from other members of the team – whose help was invaluable.  Their friendliness and willingness to help was surprising, especially to someone who had a more stereotypical  impression of what life would be like in a successful and growing business.

Initially my reaction was to question my own ability, and whether I would meet expectations. I won’t lie, the task was hard and I felt some pressure as, at the end of the day, the responsibility fell on my shoulders, but I worked hard at the project and the helpful nature of everyone that I came into contact with meant that I could draw some interesting and helpful conclusions.

As a graduate, this approach of immediate involvement and responsibility has great benefits. I already have an appreciation for how I am supporting the wider business in achieving its goals, and I am developing my skills from day one and learning a great deal.

My key learning from this is that in a fast paced, growing company like TDX everyone is given opportunities and a chance to shine from day one, much like the wildcard draw designed to encourage developing countries without expensive training facilities. Like Eric the eel I surprised myself with the success I achieved. Although his success had a huge element of luck, mine was driven by both hard work and support from a great team.

Ben Dalton, Graduate Trainee, TDX Group.

See more about the Advisory team here.

C is for Compliance

I often wondered whether my name, Chetan, has any specific meaning. This also led me to think why my parents chose to begin it with a ‘C’……..but I’ll come back to that part later……

The debt recovery industry has many links to the letter C. In recent times, the compliance journey our industry has taken - from the development of the Consumer Credit act, the generic Compliance Codes and Standards we operate under today and, more recently, the onset of these principles turning into rules that protect Customers and Conduct expectations. Debt Recovery businesses must manage Consumers fairly. Not managing Compliance properly can lead to specific cause and effects – whether that is on Collections and/or Complaints……….Is your tongue twisted yet?

So, how can Creditors do this? Traditionally Call monitoring ensured Compliance, but nowadays this has been augmented by technology  – if you have a Complete view of your Customer you can tailor your strategy to their Circumstances . That allows you to recover more of their debt, at a time and in a way which is suitable for them, and ultimately leads to happier Customers and improved debt recovery (otherwise known as Compliance). 

That sounds great, you may say, but understanding my Customer’s Circumstances isn’t easy. Actually it is now easier than ever-before.

The growth of systems and technology which allow you to segment your Customers better than ever before has been rapid. Data exchanges, data appends, online payment channels, flexible payment channels, Customer journey data, online data portals……all these systems are relatively new and are transforming the industry. We can now ensure that the most appropriate treatment is applied to each Customer at the right time, to maximise positive outcome and therefore liquidation.

Knowing more about individual payment behaviour and Circumstances also enables debt collectors to tailor their conversations by acting as a guide to help the Customer make an informed decision on the best outcome to resolve their situation. 

However, we must remember that data is only good if you use it well. Having the ability to execute and the flexibility to constantly enhance your debt collection strategies as you learn more about your Customer is key to maximising both financial and Customer experience performance.

Now back to the letter C. In Hindu Sanskrit naming culture the parents choose a specific letter of the Sanskrit alphabet which is associated with the baby’s lunar birth sign and which is supposed to be lucky for the child. This is defined by the child’s date and time of birth and the baby is then given a name starting with that letter. Mine happened to include the letter C……and there I have my answer. I was named Chetan and so it seems my parents had chosen my career path for me - from a very early stage. I was destined, it seems, to work in the world of Compliance !! There are various translations of the name Chetan, including  "Perceptive", 'Spirit Full' or 'Full of Consciousness'. And there you have it, key skills and associations that we use today to manage compliance in our industry.

By Chetan Patel, Compliance Manager, TDX Group

How innovative thinking can turn data processing risks into business opportunities

Data, it’s everywhere isn’t it?! Every time I pick up a newspaper or surf the web I can’t seem to avoid stories about data (albeit usually about something going wrong or getting lost!).

The amount of data created or exchanged in the world has grown exponentially over the past decade. In fact, 90% of all the data in the world has been generated over the last two years! **
So it’s hardly surprising that the systems and processes to manage that data have to continually adapt to keep up with demand.

It’s no different in the debt industry. As TDX has grown over the past few years, so has the amount of data that our operations teams have to process - a great thing for any business, but a nightmare if we were to get it wrong. We have extremely high standards regarding the ways in which we treat our clients’ data, after all, their data represents people’s lives.

Our TIX (The Insolvency Exchange) operation manages 20,000 accounts on a monthly basis to complete account balance validation, commonly known as the Proof of Debt (POD) process, for our clients. Traditionally we have exchanged this data with clients on spread sheets via email, but we’ve always thought that there had to be a better way to achieve this data exchange, so we put our thinking caps on and came up with a new product.

Proof Of Debt Online (PODO) takes advantage of our existing portal technology and allows our clients to complete the POD process through an online interface. Not only is this a revolution for TIX and our clients, but it also represents a step change in the IVA industry for data exchange.

We launched PODO in July 2013 and now have seven clients using the platform. Since then our own data, as well as client feedback, has told us that PODO improves:

1.  Speed: PODO is twice as fast as using spread sheets (no surprises there!)

2.  Security: less people have access to the data now, as the client uploads it to the portal themselves, and this enhances security

3.  Flexibility: as PODO prioritises work based on which balances need confirming most urgently, and gives a better view of all work outstanding, colleagues can be utilised more effectively

4.  Data integrity: this has improved significantly, and with PODO allowing instant access to quality assure data that has been entered by an individual user, mistakes can be spotted and fed back quickly and effectively

5.  Treating Customers Fairly (TCF): data is transmitted much faster (no waiting for a spread sheet to come through) via the portal and so clients are able to mark accounts as insolvent much sooner, therefore removing them from collections queues and ensuring confirmed balances are accurate

6. Performance data: PODO captures data by individual user, allowing 'super users' to have a plethora of data on team performance

We’re delighted with PODO’s performance. What started out as a way of improving data security and streamlining processes, has been achieved with imagination and innovation and has created a platform that will fundamentally change the way data is exchanged for TIX clients.

By Richard Payne, Head of Operations, TDX Group.
See more about PODO here.


** http://www.sciencedaily.com/releases/2013/05/130522085217.htm

An apple a day: The pro-active approach to managing ever-changing regulations

The phrase “an apple a day, keeps the doctor away” was made famous by Benjamin Franklin, this outlines the benefits of taking a pro-active approach to your health and not just waiting for the doctor to give you a cure when you are sick. Exactly the same principle applies in today’s compliance-led collections environment where pro-activity will help to keep the regulators at bay.

The regulatory-driven approach of the US market provides issuers with a clearly defined set of regulations that must be followed; these are then rigorously enforced with severe consequences for failures, as exemplified through a number of recent high-profile cases. This approach has resulted in issuers being solely focused on meeting current requirements; they then await the next wave of regulations and respond accordingly. As such, the compliance agenda tends to be driven by the regulators, with issuers facing challenges in keeping up with ever-increasing requirements.

In a world of pro-activity regulators provide guidelines which issuers then interpret and adhere to. Although this may appear to provide less clarity and room for uncertainty, when applied correctly, this model results in issuers building an ingrained approach to ensuring the fair treatment of their customers rather than just meeting requirements. The key benefit for creditors is that they no longer need to react to growing regulation; instead they define it through their actions.

How do creditors become pro-active, by responding to, and having their own interpretation of, guidelines, rather than awaiting the regulators to impose changes. In our world of late stage collections this means reacting to growing guidelines around the management of third party debt suppliers, and utilizing the techniques we developed over the past 10 years to monitor performance, such as detailed monitoring and exception management, to now monitor compliance. Further to this, we can develop audit and compliance activity by focussing on policy and processes to ensure that these are being followed through account level auditing.

With this approach to compliance the industry can work with regulators to understand the pro-active ‘apple’ required to keep the ‘doctor’ away, this in turn will help to define future regulation and  ensure that issuers are well positioned to meet future requirements.

By John Telford, CEO - North America, TDX Group

Compliance: why should we do it, and how will it change our industry for the better?

In the second decade of the 21^st century compliance is the new king. Markets are changing fast across all consumer-facing industries with regulatory forces becoming increasingly influential and customer service expectations rising.

Within the current complex and changing economic environment creditors face a tough challenge balancing the increasing pressures between delivering greater levels of liquidation, reduced cost to collect and a more compliant and customer- centric manner.

Over the last five years I have noticed a shift in how companies manage their compliance agenda as the importance of this has increased to be on a par or, in some cases, even more important than recoveries liquidation.

With the increased media and regulatory scrutiny around debt collection practices and the recognition that it can cost more to acquire a new customer rather than keep an existing one, (even one that pays late or who has hit financial hard times) companies have been forced to react to ensure they are doing more than simply ticking boxes and following best practice guidelines. They now need to base their compliance performance around 'outcome' and ensure that they find the right one for all parties, including the debtor.

So, against this tide of customer-centricity, what knowledge do we need to ensure compliance in everything we do? Do we need specific systems and technology? And is it actually possible for companies to increase collections, reduce costs, be compliant and improve customer experience all at the same time?

These are all key questions facing today’s industry managers and ones which we would be well advised to understand as soon as possible. In this blog series we attempt to answer these questions, and clarify what we all need in this fast-paced and ever-changing world.

By Beth Whelan, Senior Client Relationship Manager, TDX Group

Why Local Authorities need to plan now to mitigate the impact of the upcoming changes to bailiff regulation

It is the opinion of the Ministry of Justice that ‘Bailiffs are necessary for both the economy and the justice system. They carry out a difficult role in often challenging circumstances, and the majority operate in a responsible and proportionate manner. However, a significant few use intimidating behaviour, treat debtors unfairly and cause unnecessary distress, destroying the reputation of the majority. The Government is committed to strengthening protections against these rogue bailiffs and the unsound, unsafe or unfair methods that they use, while at the same time making sure that debts can still be collected fairly’.

It is for this reason that the Government is introducing new measures in April next year to clarify the law, introduce a transparent fee structure and regulate the industry. The implementation of Part 3 of the Tribunals, Courts and Enforcement Act 2007 (TCE Act) scheduled for 6 April 2014 is, amongst other things, going to set into statute the fees that bailiffs can charge.

Based on the proposed fee structure, and some assumptions around inflation and VAT, I think it is fair to assume that the fee for a single bailiff visit after 6 April 2014 will be around £400 (administration fee plus enforcement fee). This is significantly higher than the fees currently contracted by local authorities for a single visit and will be considered disproportionate by many publicly elected councillors. So, whilst, in the opinion of most, the increased regulation of the enforcement industry is long overdue, these changes are undoubtedly going to have a significant impact on how local authorities recover arrears in a number of crucial revenue areas. At a time of funding cuts, welfare reform and increased scrutiny, councils would be well advised to start planning now to mitigate the impact of these changes.

However, I believe councils can take comfort from tried and tested techniques already in use in the private sector and, as a result,  these changes could actually result in increased recovery rates, improved internal efficiencies and a reduction in the total bailiff fees charged. The key is the administration fee stage. If councils can provide the right information and motivation to enforcement agents to collect at this stage, then time to collect should shorten, fees reduce and the customer experience improve.

For some years now private sector creditors have been implementing increasingly sophisticated debt recovery strategies designed to maximise collection rates whilst at the same time adhering to Treating Customers Fairly (TCF) principles. Many of them have similar challenges and processes to the public sector; there are some particularly strong parallels with the water sector, for example.

A debt recovery strategy that includes data enrichment to improve access to contact details, alongside a better system of matching and managing enforcement agencies, could help  free up resource, improve performance and limit fees.

Adopted from the private sector, a new breed of tools and services are finally allowing councils to implement and execute strategies suited to the unique circumstances and goals of local government. This could include managing enforcement agencies in a manner that incentivises them to collect at administration stage rather than letting cases escalate to the more expensive enforcement stage. What is more, with the right tools in place, strategy becomes an iterative process allowing councils to test and learn, continuously improving and reacting to an environment that is, by its very nature, constantly evolving.

In the present climate local authorities are dealing with significant change. Unprecedented funding cuts, welfare reform and regulatory change all combine to make an extremely challenging climate. But there are also opportunities. Enterprising authorities are finding imaginative solutions that mitigate the changes and improve their position both today and for the long term.

If you would like to be sent our White Paper on this topic, or would like further information, please request more information here. 

 


Paul Fielder, Strategic Account Director, TDX Group