It’s Time to Integrate Collections and Recovery Systems, FICO Says

Nowadays, managing a collection system and a recovery system separately proves difficult, according to a webinar hosted by FICO yesterday.

Keeping two systems has become harder to defend when a single system lowers labor costs and is more efficient, FICO said. There are many similarities between collection and recovery systems, such as the audit process, managing agents process, reporting process, and analysis process. Therefore, integrating the two systems will significantly save in labor, technology, and process automation.

“An integrated system is flexible and extendable,” said Martin Germanis, vice president of Solution Sales at FICO. “It incorporates multiple systems and staff.”

In an integrated environment, both collections and recovery accounts reside in one system and center around the debt manager. When the host system triggers a charge-off event, the money will be moved to loss buckets through the debt manager and sent to the general ledger and payment vendor. Financially, the integrated system will combine maintenance contracts, reduce support staff, and reduce training time when agents transition between groups in the department.

“It’s very important to interview vendors upfront when considering combining collections and recovery,” said Terry Collins, collections and recovery manager at Trustmark National Bank, during the webinar. He suggested lenders ask vendors specific questions, such as requesting detailed technology descriptions, learning about their independence in building up the system, inquiring about their configuration process, and getting to know their technology stack.

“I believe data mapping is the first and foremost step,” Collins added. “With the debt manager in the integrated system, we shall be less dependable on IT staff.”

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