3 Ways to Wow Governments (And Everyone) With Your Tech

In 2010, the framework for massive technology updates in healthcare was set in motion. It started with the introduction of the health insurance marketplace for the public sector. This resulted in hospitals, medical facilities, insurance companies, claims processors and third-party agencies racing to upgrade systems and technology for patient-account management, privacy and data security, compatibility, and simply to keep up with the changing trends. For the agencies servicing healthcare accounts, technology updates and upgrades were necessary to stand out and to survive as a provider of receivables management services.

Now, in 2017 and stepping out of the healthcare vertical, are we about to see another massive technology update impacting third-party agencies? For those in the government space, the answer is probably yes. Without launching a political debate, there is uncertainty surrounding what is taking place and will take place with the federal government as well as with state and local governments. Nonetheless, technology advancement and increasing IT budgets appear to be a priority. A report from Forrester Research published on govtech.com forecasts that IT spending at the state and local levels will overtake IT spending at the federal level as soon as this year and then continuing into 2018.1 More specifically, the report details that the largest investment will be in cloud-based software and solutions.

Technological advances are nothing new but there does appear to be an evolving understanding that a fundamental change is underway. Innovation is essential. Younger generations rely heavily on mobile devices and therefore are always “connected.” The device market is growing and changing rapidly. There is an expectation that technology in other markets is keeping up. Increased IT spending at the state and local levels could help to close this gap.

We can tie this all together by looking back at the question raised – Will any of this impact third-party agencies? Sooner or later it will so the new question is how can agencies prepare? In my opinion, agencies should upgrade their technology so it stands out as if they were attempting to sell their services to government entities. Essentially, make your operation appear cutting edge. “Appear” is the most important word in that statement because nothing needs to change with your collection process. Instead, pretend you are working a state government contract and are in a position to give them the data they need, the reports they are looking for and the analytics they want. Here are three things your agency can do to stand out:

1) Data Centralization

Use a data warehouse, data lake, master data management (MDM) system or whatever you want to name it to gather all the data from all your systems. Most agencies have many database systems in place to run the business. Common cases include collection software, client or debtor access portals, accounting software, outside vendor services and a CRM. These are all standalone systems with their own data sets. By getting as much of the overall data as you can into a central location, you are in a position to report on the entire enterprise and to use the data to really understand how the business is performing. To stand out even further, put your data centralization solution in the cloud.

2) Performance Reporting Package

Develop a package of canned reports about your agency’s performance at the portfolio level that rolls all the way up to the entire organization. There is a good chance you already have a pile of client reports to start with. Having a performance reporting package available shows you are ready to take on more business and you have an understanding of what creditors and first parties want to see from their agencies. If your client does not have hard report layout and formatting requirements, use your package to eliminate a large chunk of the new client onboarding work. You will onboard quicker and will not miss reporting deadlines with your new client.

3) Business Intelligence

An element of this includes report development but with business intelligence (BI), you are adding the bells and whistles. A BI solution can be tough to implement because similar to developing a reporting package, you must know the information that is critical and the data points that are key performance indicators. Only when those elements are understood, a slick set of dashboards and analytictype reports can be developed. To really achieve a noticeable BI solution, an outside provider is almost always necessary. BI is a popular topic these days and there are many good providers in the industry but Tableau offers the best product I have seen. I highly recommend their product and at the very least, it is worth a demo.

An initial push to upgrade your technology and keep up with trends does not have to break the budget or involve a massive overall in how your business operates. It is forecast that government IT spending will be increasing in the coming years and a few updates now could reduce the amount of work that may be required later this year or next. Additionally, the element of change is naturally a challenge and most are comfortable with the way things are but a little change now could ease the pain from a big change coming soon.

1 http://www.govtech.com/civic/Stateand- Local-IT-Spending-to-Outpace-Federal- in-2017-and-2018.html

* This article is also published by Collection Advisor

Advertisements

Managing Unstructured Data with Big Data Notions

Data is traditionally structured. It makes the data easy to read and simple to consume. Are those statements actually true? I have a hard time accepting that perception. What if I told you we collectively perceive data as traditionally structured because we select to ignore unstructured data? All that remains is the structured data and because that turns into the primary focus, it becomes natural to claim data is traditionally structured. It makes the data easier to read and simpler to consume.

Unstructured data is defined as information that does not have a pre-defined model or is not organized in any sensible manner. This is not a new phenomenon. However, the sheer quantity of unstructured data is on the rise across all industry verticals and there is growing interest in the ingestion of that data. One of the largest examples of this is in the healthcare space. Take a minute to think about all the pre-printed medical forms, questionnaires, insurance forms, procedure and diagnosis forms, and claim forms you are exposed to as a patient or guarantor. That is what you see. Those same forms can exist in a variety of formats and layouts based on the insurance company, hospital or medical facility, or the state or locality where the services are performed. It may be a single field variance or a completely different looking form altogether. Whether typed into an electronic form or scanned into a system as an image, the data is likely unstructured making it nearly impossible to develop software to read, recognize and accurately ingest all of the data all of the time.

Instead of setting unstructured data aside, we need to use technology to reduce the constraints and structure the data. This will allow for the consumption of more data, which is really what enterprises are after. By understanding the data, you are creating a modern architecture ideally easy to use, repeatable, and secure. What could you accomplish with more data? What could society accomplish with more data, specifically in the healthcare space? Could we prevent outbreaks? Could we cure disease?

All enterprises deal with unstructured data. Some have more than others but unstructured data does exist everywhere. There are many methods of thinking about unstructured data, getting it into a structured format, and ultimately loading it into the system or data warehouse. It can be done manually with users reading and inputting the data, it can be done electronically with extract, transform, load-type processes to deal with most of the data, or it can be a combination of electronic and manual effort. Making the process as electronic and systematic as possible will be very helpful but remember it is nearly impossible to consume 100% of the data this way. Some manual effort will still be required when a form field is blank or has been moved to the next box, for example.

You need the right challenges while making the decision to ingest and make sense of unstructured data. It is important to know or at least question what you are possibly missing or what you can possibly gain from this additional data. Do not go blindly into the effort of managing unstructured data. Also, do not get caught up in the immediate issues or only a few use cases. Architect the process for a long term and comprehensive build out. You may know the challenges you are facing today but consider what challenges you may face down the road. Regulation, security, and technology are examples of ever-changing items in our industry that may present future challenges. Finally, data governance must be addressed. This is particularly true in the healthcare industry. The days of only a few fields being deemed personally identifiable information (PII) are fading away. If you are dealing with healthcare data, you are better off considering everything as PII. Secure access to the data on a need-to-know basis or at least with the vision that not everyone requires access to everything.

The concept of ingesting unstructured data is relatively new in the debt collection industry. Much of what I have presented crosses the line between what is considered data integration and what is considered Big Data. Managing unstructured data requires integration processes but understanding why unstructured data is important is a Big Data thought. Regardless of your approach, plan to pay for the sins of the past. Not capturing all the data and randomly dropping data into fields that “look” good may end up skewing your results as you ingest unstructured data.

* This article is also published by Collection Advisor

Managing Unconventional Skip Tracing Data

The common skip trace practice many third-party agencies follow after loading a new placement file is to address skip trace, phone number skip trace, bankruptcy skip trace, deceased skip trace, and credit score. Most collection professionals are well versed on this now monotonous routine. All agencies do it. The difference lies in how the return data is evaluated, captured, and embedded into the daily workflow for managing the inventory. However, there are some other, unconventional skip tracing services and often, they will provide some very revealing information. This information may be just enough to separate you from the competition. I would like to detail three unconventional skip tracing services and more importantly, ideas for how to manage them in your receivables management software.

Possible Incarceration

You may eventually discover a consumer is incarcerated over the course of working the account but have you considered running a skip trace for incarceration before any effort goes into contacting the consumer or sending a letter? Executing this skip trace and identifying a consumer is incarcerated will allow your representatives to focus on accounts that are more collectible. The possible incarceration skip trace should be scheduled one of two ways. First, the request can be automated to run with your normal skip trace service requests (address, phone, bankruptcy, deceased, credit score). Alternatively, you have your regularly scheduled requests run first and then based on those results, segment the ideal consumers for a possible incarceration skip trace. For example, if you receive a return that a consumer is deceased or has a credit score less than 400, your automated workflow may be set up to automatically close the account. In those cases, your skip tracing automation should bypass that consumer altogether for the possible incarceration scrub.

When receiving a hit for incarceration, some decisions need to be made. Most often, a release date (if applicable) is provided with the incarceration hit. Depending on the duration of the incarceration, you may option to close the account and re-open it immediately after the release date. On the other hand, you may just want to close the account and archive it. Either way, let your system handle it with built-in automation.

Possible Litigious Debtor

The litigious debtor skip trace could save thousands of dollars in legal costs. This may be one of the most fascinating services available these days. A returned hit on this service may indicate you are facing a consumer who has filed one or several lawsuits against agencies. It exists because consumer lawsuits against agencies and first parties are on the rise. Furthermore, consumer initiated lawsuits are steadily increasing because more and more consumers are becoming well educated on the FDCPA and other federal or state regulation.

Unlike the possible incarceration skip trace, you may want to set up workflow to run the possible litigious debtor skip trace right away. If a hit is returned, most agencies establish rules in the software to immediately flag and close the account in an effort to eliminate any contact whatsoever. When going this route, utilize workflow or other automation to close the account, remove it from any dialing queues, stop any other skip tracing efforts, halt all contact attempts, and flag the consumer so it is understood to steer clear of this account.

Property

This skip tracing service is a fun one and can arm your representatives with some very valuable information prior to contacting the consumer. The property skip trace will inform you if the consumer has recently purchased, leased, or somehow acquired new property. A house, condo, and land are all property examples. This information is especially valuable when a representative is working a consumer who indicates they are on a tight budget or simply does not have the financial resources to repay the debt.

As for automating this service, it is best to send the request after your first blast of skip tracing. You will want to carefully segment and select the consumers you want for the property skip trace. Construct the workflow to select consumers with a valid phone number and address, populated with full SSN, an outstanding balance that justifies the property skip trace, and a moderate to high credit score. Unlike possible incarceration and litigious debtor, turning on monitoring is a great idea for this service. This will allow your skip trace provider to continuously seek property hits for the consumer, rather than a one-time scrub, and notify you when a new hit becomes available. With this information, a representative can easily counter an excuse-ridden consumer by simply questioning his financial position since he has recently purchased a new property.

Before jumping right into unconventional skip tracing, you must first develop guidelines for isolating and marking the consumers for these different services, for identifying them when hits are received, and for the special handling they require. Regardless of the decisions for implementing unconventional skip tracing or managing the returns, store the data in your software or data warehouse and make the process automated in your software by including it in your everyday workflow.

* This article is also published by Collection Advisor

4 Compliance Areas Debt Buyers Must Address

For years, debt buyers could operate outside the scope of compliance and regulation in the accounts receivable management industry. This was not because debt buyers were attempting to be deceitful, rather this sector of the industry was so new and innovative that too much was unknown to attempt to govern it. Those days are over and no longer are debt buyers overlooked. In fact, they are now very much on the radar of the CFPB. It was only a matter of time as compliance administration was on the rise with larger creditors and other first parties. The CFPB is already visiting the organizations. Most would agree that debt buyers are not far down the list.

What can debt buyers do to prepare themselves for a call from the CFPB? Debt buyer certification programs are fairly new in the industry and several options are available. The standards for most of these certification programs focus on the primary areas of concern debt buyers are facing these days. Topics including media, chain of title, agency management, and credit bureau reporting all make the cut. I would like to examine these four primary topic areas and present some solutions for capturing and maintaining the compliance related information using the same technology debt buyers are using to manage their inventory. Let’s set the precedence that present day debt buyers are managing their inventory with proper, enterprise level software. Any debt purchasing operation still managing inventory using spreadsheets is destined for compliance violations and trouble with the CFPB should there be an audit.

Media

Also referred to as account and debtor documentation, media is crucial for debt buyers and it is important to have software that will allow for media attachments on a per account basis. Often, media is not included in the actual purchase agreement. It usually must be requested from a separate entity, or if the seller does have the media, it comes with an additional cost. In many systems, media attachment components are not included but hopefully your software allows for custom configuration and you are able to add media attachment options.

Make sure media attachments are available at both the account and consumer levels. For example, there may be a contract at the account level but separate credit reports if there is more than one responsible party on the account. The setup should be able to store the credit report for the respective responsible party. Most media is large in file size and because of this, disk space will be consumed quickly. Proper system sizing is often overlooked and needs to be planned accordingly. Lastly, in the event a consumer pursues litigation, the debt buyer will need to be in a position to confirm the consumer opened the account and is a responsible party by presenting media.

Chain of Title

The history of account ownership is referred to as chain of title. When a debt buyer purchases an account from a creditor or another debt buyer, the ownership is transferred. Like media, chain of title is additional documentation for the account. It should be requested at the time of purchase and any information or media related to chain of title should be stored in the software at the account level. You will want to have this information for compliance purposes, in the event of litigation, or if you eventually sell the account. Storing the chain of title in your software will also position you to set up your placement strategies with external agencies and provide them with chain of title for each account in the placement file.

Agency Management

As a debt buyer, knowing the agencies you are placing with is almost as important as knowing your own agency. At least that is what an auditing entity will expect. Until sold and ownership changes hands, debt buyers are responsible for all their accounts regardless if being worked inhouse or placed with an external agency. There is some very nice software available for debt buyers that will not only allow for automated account placement strategies, but will also include features for ranking an agency, certifying an agency, and tracking compliance related data points for an agency. If you cannot find the latter in your current software, it is in your interest to build out the agency management module to capture compliance related information. For example, you may be expected to know any certifications your agencies have achieved, how they enforce and maintain data security related to your inventory, and their backup and restore procedures. In most cases, this is not only a single field of data. You should be able to capture and store short text descriptions of the processes or attach documentation to the external agencies that are configured in your software.

Credit Bureau Reporting

How debt buyers report to the credit bureaus is one of the most common violations in the industry. Far too often, workflow elements for credit bureau reporting is not detailed enough. Ensure your credit bureau reporting workflow is not re-reporting debtors and is also deleting debtors from the bureau’ s file upon resolution of the debt or in the case of bankruptcy. Be ready with documentation that details your process. It is much easier to hand an auditor a detailed document and walk through it together than attempt to explain your process for others to appraise. Credit bureau reporting practices are also key processes debt buyers should understand about each of their external agencies.

Understanding and documenting compliance standards such as those described above will help prepare you for a visit from the CFPB. At the very least, you will have addressed and standardized some important, compliance related business processes should the CFPB never call or visit.

* This article is also published by Collection Advisor

Increase Telecom Recoveries with Robust Scoring Models

When handling telecom accounts, agencies need to have a distinct approach to be successful in their recovery attempts. Customer delinquency is on the rise in the telecom market. Higher subscriber prices, providers combining services, the competitive nature of the players in the market, and third-party involvement is to blame for the growing number of delinquent subscribers and rising write-off amounts. News like this should be welcoming to agencies servicing telecom accounts, but with it comes increased pressure on the agencies to recover.

It is a mistake to think of telecom accounts just like every other account. It is an even greater mistake to treat telecom consumers as you would treat bank card, student loan, or medical consumers who have delinquent accounts. Take a minute and think about yourself as a consumer in the telecom market. This should be easy as you likely have some combination of telephone, cable, satellite, or streaming service accounts in your name. As a consumer in the market, do you understand what you signed up for, how much you owe, and in what respect the money is applied when you make a payment? Generally, consumers in the telecom market cannot answer these questions and furthermore, cannot explain the contract they signed or if they even signed a contract. We see this phenomenon in the telecom industry because it has been commoditized to the extent where it is too easy for consumers to switch suppliers. When a consumer switches, he/ she usually either does not know or does not care he/she owes money. The point is the industry is different so how an agency utilizes systems and technology to collect needs to be different.

Closer management is essential. Creating and implementing finely segmented profiles using strong scoring models is one way to manage telecom accounts in your collection software. First and foremost, identify the data elements that should factor into generating your recovery score and how each may positively or negatively impact the score. The list below includes some data elements and considerations when generating a recovery score for your telecom accounts.

Credit Score

In most cases this is undoubtedly the top data element to include when generating a custom recovery score. It should weigh heavily in determining the collectability of an account. The workflows or queue logic in your software should stage consumers with the higher credit scores to receive the most attention. Likewise, you may set up your workflow to all but close out accounts with a credit score in the 300 or 400 range.

Quantity and Quality of Data

It is important to know how much data you have per account and the quality of the data. Generating a custom recovery score with not enough and or unqualified data may hurt your recovery attempt more than helps it. Ideally, you already have the data captured in your software. If not, most data should be included in the placement file from the service provider or can be obtained by interfacing with data scrub service providers like LexisNexis, MicroBilt, or any of the major credit bureaus. At a minimum, make sure you are receiving and storing data points like full name, social security number, full and verified address, and verified phone.

Number of Delinquent Accounts

Any consumer with multiple delinquent accounts in your system should receive a lower score. It is an indication the consumer is hopping suppliers when better deals or introductory offers are available.

Geographic Location

Some may question the significance of this data element but in remote or lesspopulated areas of the country, consumers do not have many options for telecom service. They may even be limited to a single supplier for Internet, cable, and/or telephone service. In these cases, a higher recovery score is reasonable as the consumer must satisfy the debt in order to resume service or to receive new services from the supplier.

Type of Residence

You may consider increasing the recovery score if the consumer owns versus rents or shares a residence. In just about all cases, the telecom accounts for a homeowner are in his/her name. When working with consumers in an apartment, condo, or other renting situation, the telecom services and responsibilities may be split among many of the residents, making it somewhat easier to neglect their portion of the service.

After identifying and detailing the data elements important for generating your custom recovery score, they must be built into your software for automatic and fluent management. Some recovery software platforms include modules to set up custom scoring but none I have encountered are very impressive. More flexibility and options are likely available outside of the software. In most cases, custom scripting will be required to consume the data and make systematic scoring decisions. If you have strong programmers on staff, their skills will certainly be required to configure your scoring model. This can be handled strictly with scripting a solution that will integrate with your recovery software or externally in a data warehouse or “black box.” The terms data warehouse and black box are interchangeable on this topic. It is a place external to the recovery software where data from your recovery software, accounting software, web portal, CRM, or any of other in-house system is captured.

Custom scripting can be applied here as well and may be a better option than against the recovery software database because you may have more data elements to work with in the data warehouse. Regardless of the database(s) utilized, it is imperative to apply the recovery score logic uniformly and against all consumers in the system. One mistake agencies make when implementing new logic is only applying it on a go-forward basis. Circle back on all the existing telecom consumers in your system and run them through your new custom scoring logic as well. Allow the system to make decisions and commit to allowing your scoring to drive collection efforts.

* This article is also published by Collection Advisor

Launching Your Data Warehouse for Skip Tracing

The production data you receive can be simply classified into two categories. It is good data or it is bad data. We refer to the bad data as “garbage data” because it breaks your automated processes, will not load into your software, and in most cases requires some agonizing manual intervention. However, it is important to intelligently collect all skip tracing data and build automated processes for managing it. Technology solutions should be in place to manage your skip tracing data and to avoid your agency being buried in a landfill of skip tracing data.

Although, most collection software includes some sort of inherent module, feature, or perhaps even integrations for interfacing with skip trace service providers, a data warehouse should be implemented as a paired solution for housing and evaluating your skip tracing data. Your agency may already have a data warehouse that can be enhanced to include skip tracing data. Here are some considerations when launching or enhancing a data warehouse for your skip tracing data.

Basic Considerations

The basic, or not-that-exciting, considerations include:
1) Location – You need a server. If your security, compliance, and client requirements do not force you to host the data in-house, I recommend outsourcing to a hosting company. Most hosting companies can dedicate a physical server in a secure environment or implement a virtual environment with the same levels of safety and security.

2) System Sizing – Aside from the other data structures in your warehouse, how much disk space or how much processing power will you need to account for your skip tracing data? The disk space should be enough to house the production data from all systems feeding the data warehouse and from all the ancillary sources, such as your skip trace vendors. Regarding performance, there should be enough muscle to execute all jobs, rules, and interfaces in enough time to not interfere with any regu lar backups. If utilizing a hosting company, they can help you figure this out.

3) Software and Licensing – For most agencies, Microsoft Windows Server and Microsoft SQL Server will do the job. You may require .NET framework, Java, or special drivers based on your preferred technology for interfacing with the data warehouse. This is another area your hosting company can assist with.

Complex Considerations

The complex, and more stimulating, considerations include:
1) Data Structure – All skip tracing data should be captured and stored in your data warehouse even if it is not utilized today. After all, you are paying for it. It is safer to have the data and not need it than to need the data and not have it readily available. Try to construct an intuitive data structure. This will make future build out and scalability much easier.

2) Business Rules – There are many considerations on this topic but let’s focus on the skip tracing data your agency deems important. If you do not have documented business rules stating which pieces of returned data are imperative and how that data is used, you should. Let’s look at a simple business rule example. Most agencies run a skip for phone and address. Of course this information is imperative but how are you handling this returned data? Is it accepted as the best and always overwrites the primary phone and address in your system? Are you running a process to validate the returned phone and address prior to overwriting data in your system? Are you handling the returned data differently based on the source? These are some of the questions your documented business rules should answer. Finally, program these rules into your data warehouse so the process is fully automated.

3) Data Analytics – Many agencies overlook the importance of data analytics and thus lack the understanding of data trends. If you are going through the process of implementing or enhancing your data warehouse to include skip tracing data, you should absolutely run systemic analysis to understand your skip tracing data. This is more than identifying which skip tracing data points are important. Rather, it will show you what the data means. With proper build out, you will understand where you are getting the best skip trace results, what is not working within your business rules, and will likely identify cost saving opportunities.

* This article is also published by Collection Advisor