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FOREWORD
We all know that the pressures for those involved in the collections and
recoveries of overdue accounts are becoming greater. The economic
situation with which we find ourselves is constantly changing and we
need to ensure that we have the best processes in place to enable us to
concentrate on those customers where additional attention is required.
These processes can only be optimised by taking a holistic approach by
combining the skills in the operational areas of the business and the
right tool.
Alvin Toffler was the first writer to identify the accelerating rate of
change, in his 1970 best-seller ‘Future Shock’. Nowhere is that more
true than in collections and recovery management. Systems are becoming
integrated and intelligent; they are becoming customer-centric and open.
Scoring and strategies are now common place, embedded in the culture as
well as the structures.
The tools are moving us rapidly towards what could be classed as
‘optimal solutions’. And on the human side, ultimate flexibility is now
available with virtual call centres and Internet collections
communication and systems. The achievement of the cost-efficient
collections function is available. And yet it has never been more
complicated. The only way to grasp the golden chalice is to use the
available tools. The tools can not do it by themselves.
So management must have the understanding and the skill to use the
available tools. This is the main change to the collections industry of
the early 21st Century. Collections management need the
age-old management skills, but also an appreciation of the new
techniques and technologies. The cost-effective operation will be the
one where the tools are not only in place, but the management have them
under control.
What does this mean in practical terms? In the recent past, Risk
Management has built scorecards, they have often designed and
implemented the strategies. The Collections department have - on the
whole – simply been the users. There have been may cases where
Collections have not followed ‘the rules’ or Risk have designed bad
scorecards or strategies. To optimise performance, Collections must own
the whoel solution. The management must set the strategies, ensure that
the scorecards are appropriate, track the performance with an holistic
view and apply the principles of continuous improvement. Only by having
a complete appreciation and, ultimately, control over the process, can
optimal cost-efficiency be achieved.
Collections management need to manage people (who are, after all, the
greatest tool of collections) in tandem with the strategies which in
turn must be flexible. They must also be consistent with the systems
functionality, whether it be a customer-centric approach or simply
resource allocation for a power dialler. The Collections Manager
requires the skills from operations to strategies.
Between the covers of this book you will find contributors with expert
knowledge in their field of expertise. The subjects covered will be of
considerable interest to the whole range of people who impact this
complex issue from the operational groups, credit risk analysts, those
involved in setting the strategies and to the implementers and
maintainers of the related systems. It is only by taking this approach
that the financial institutions will be able manage the relationship
with the customer effectively and efficiently.
Gordon Crawford
Chairman, London Bridge Software Holdings plc
October 2002
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