The Importance of Compliance

“Demonstrating a track record in complying with the highest industry standards – has now become critical.”  (CCR Magazine, 2012)

Performance is now not only about increasing productivity and developing revenues streams. But also about the importance of balancing with the compliance requirements, that are set out by numerous industry bodies.

Every collection and trace organisation has to adapt and adopt techniques that are right for them, in order to develop process driven ways of working, to allow collections and trace to be undertaken within a compliant environment, whether this is through automation, workflows or any number of other options.

2012 a Tough Year Ahead for Debt Collection?

After a hard year in 2011 many predict an even tougher year ahead. With increasing pressure on personal incomes, people are having to economise further in order to get by, with a significant minority seeing debts as a none priority item. This has led to an increase pressure on collection rates. This is set to continue with inflation running at 4.8% and wages remaining stagnant across many industries. 

This said a recent Plimsoll report has shown that in some areas of the collections market there is still significant growth. A small number of collection firms have added 25% to the size of their business over the past year. It would seem they have done this through being innovative in their approach to collections and trace, through adopting cutting edge collection strategies and investing in technologies to help improve their market knowledge and insight.

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Great British Debt Collections Review

A recent Global Collections Review highlighted a number of interesting things about the collections industry within the UK. Firstly, Debt Collection Agencies are used significantly more in the UK than other countries. Secondly, the main reason for selecting one DCA over another was down to ‘Success rate’ with ‘Price’ and ‘reputation’ being placed 2^nd and 3^rd as the most important considerations.

Maybe most telling cost of service has reduced in importance over the past year, this could possibly be explained through the growing importance of compliance. Another reason for selection of a particular DCA which is growing is protection of a customer’s reputation. The UK market is much more flexible on price charged for collections than their European counterparts, possibly owing to the importance of reputation protection. Also interestingly 63% of organisations who out source debt just work with one DCA, this highlights the importance of good relationships within the industry.

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Press Release - tracehunter - Free Trace Productivity Report

Trace management software developers, tracehunter, have compiled a free report looking at the issue of productivity within the debtor trace process. The paper deals with the key issues faced by the debtor trace industry at present and with some trace departments and firms being 6 times more productive than others it makes for interesting reading. tracehunter’s productivity report is available through the link on their monthly news bulletin

or by emailing info@tracehunter.co.uk for a PDF copy, alternatively you can ring on 0161 713 2213.

tracehunters report identifies some of the main issues that a trace firm or department needs to take into consideration when looking at both the issues of productivity and compliance. These two issues must go hand in hand, as there is no point increasing productivity if you do not do it in a compliant manner.

In particular, the tracehunter report on trace productivity outlines how trace departments and firms can increase their case closure rates per agent as well as maximising the usefulness of data and resources available in a cost effective manner. By harnessing the power of the tools available it is possible to drastically increase volumes without any increase in head count.

Paul Coxson CEO of Focus Software Systems explains “through seamless integration of all your trace in to one simple to use function, it is possible to automate large amounts of trace, thereby allowing more time to be spent on the more complex trace cases. Some users we currently work with now send all of their collections cases through trace, to validate addresses and prevent unnecessary time being wasted through collection agents having poor contact data.”

Compliance, an Opportunity to be the best

The recent OFT guidelines on debt collection have reiterated the importance of high quality trace data on debtors and the management of that data. The OFT speaking at the Collection Awards in Manchester on Wednesday the 9^th of November said “when you’re acting on data you must have a fair degree of certainty that it is adequate and correct”.

How do you create certainty? Well it is imperative to have the correct systems in place to manage, control and enhance data quality. However, more importantly it is about motivating your staff in the best way possible. Staff should be motivated and driven not purely by success, but compliance, their treatment of debtors and their way of working.

Productivity, Compliance & Revenue

All of the above are greatly affected by data and how that data is used, now more than ever the data that is required is available it is just how that data is interpreted. Accurate customer data is required in order to achieve organisational goals, which in most cases revolve around revenues and profitability. Untrustworthy data results in wasted time and resources, with a need for forced rechecking of the facts. Poor-quality data affects the ability to comply with industry standards and expectations, leading to unnecessary fines and poor publicity.

Therefore having the correct systems in place is paramount to a successful operation.