5 Ways to Turn Compliance into A Profitable Proposition for Your Collection Operation

If you are a collection practice, you would understand the paramount importance of compliance to your business. But all too often, compliance can be seen as an expense that can potentially eat away at your bottom line. The truth is compliance can help improve your profitability and doesn’t have to be a drain on your resources.

Recently we sponsored a webinar, hosted by Mike Gibb, CEO, and Editor of AccountsRecovery.net, where a panel of experts discussed how compliance can be leveraged to improve collection operations’ bottom lines. Debra Ciskey, Executive Vice President, CACi, Sara Woggerman, President of ARM CBS, and Katie Zugsay, CEO of Finexus Insurance, joined the webinar to discuss how compliance can benefit your business and strategies for maximizing your returns while minimizing your costs. If you missed attending the webinar, here are key takeaways (shared in two-part series).

Rethink your compliance team 

A solid foundation of a compliance department is critical to the success of a collection operation. Some of the key functions of your compliance department should include compliance monitoring (not just collection calls, but letters, and any account activity), complaint investigation and resolution, and internal audit functions.

The structure of a compliance department may vary depending on the size of your organization but should encompass critical job functions to ensure regulatory compliance. These functions can include a Chief Compliance Officer (for designing, implementing, and monitoring the processes by which an organization will comply with all applicable laws and regulations) and Chief Risk Officer to assess and mitigate risks. For small businesses, hiring for these roles may not be feasible. In such cases, creativity and resourcefulness can come to your rescue.

Reimagine compliance training

Compliance training is a critical component of any successful collection operation. The Consumer Financial Protection Bureau (CFPB) has also emphasized the importance of compliance training, whether it’s managed separately or by the compliance department. Effective compliance training can positively impact your bottom line by increasing agent confidence and awareness. When agents know what they can and can’t say on a collection call, understand their job, and are trained on key compliance subjects, they become more assertive and effective in their roles.

Slowly and steadily, the industry is acknowledging the need for compliance training programs with the latest content, especially during the onboarding of new employees. Rushing through the training program or inadequate onboarding can negatively impact new employees and result in greater attrition. As shared by one of the panelists during the webinar (Sara Woggerman), a trainer can lose 70% of attendees before the end of a training session if not paid attention to.

An effective compliance training program (broken into assorted sessions) can help your agents understand what they can say on call and how they can negotiate with the consumer within the compliance framework. The program can help them understand what regulators expect of them and encourage them to ask clarifying questions during training sessions.

Use automation responsibly

When automation is available, it’s easy to set and forget, but this can lead to compliance issues. While using tools like CMS (for certain automated workflows) and speech analytics (for automated call monitoring and maintaining compliance) makes sense, it’s wise not to leave it all on platforms. Combining these tools with human review can help your business identify areas for improvement. With better compliance monitoring, you can answer questions from regulators and credit bureaus more confidently. Additionally, increased audits can help you identify red flags and improve compliance in time while keeping costs low.

Ensure seamless collaboration between compliance and training departments

Collaboration between different departments is critical to ensuring that compliance is integrated into all aspects of a business. To begin with, your compliance department should work closely with the training department to ensure that your employees receive the necessary training to maintain compliance.

The training department may also require training programs to ensure they have the knowledge and resources to develop training materials effectively. Hence your compliance team should identify the training needs of trainers regularly and evaluate training assessments, testing, and quizzes to identify gaps in the program.

Continuously assess the performance of your compliance investment

If you are wondering how tech investments like an advanced compliance management system (CMS) saved you X amount of dollars, use a few metrics to identify the effectiveness of your compliance tool stack.

Evaluate the costs of noncompliance and lawsuits, including attorney fees and costs associated with internal investigations. For example, if the average lawsuit costs you $3,500 at the commission rate of 20%, you will need to collect $17,500 to cover the revenue lost in the lawsuit. By assessing these costs, you can know ROI improvement after implementing CMS into your business. Comparing your NPS (Net Promoter Score) before and after the CMS implementation can also give you a sense of the effectiveness of the technology.

If you are wondering how compliance with a balance between technology and human touch can help you cut down on your labor and operational costs, reach out to our representative today. To learn more about our compliance management system, click here.