There are many channels where IT innovation can bring impact tothe credit union's bottom line, but one of the most challengingchannels for IT to target is collections.

For some reason both departments have a difficult timecoordinating. IT has a need for specific scopes of work andCollections has a difficult time breaking free from the volume oftheir daily efforts to articulate their needs.

This innovation disconnect can be overcome by focusing on threestrategic areas:

• data gathering to improve skip tracing
• shortening the window of successful promise to paytransactions
• Monetary opportunity tracking

Not having current member data to work with can be a seriousobstacle to skip tracing. Phone numbers, emails, and addressesare sometimes out of date, which can hamper a collector's effortswhen trying to make contact with the borrower.

So where does IT fit in this effort? What programming hasbeen done to regularly update member data at the CU? Does theage of the current data require re-validation?

It is odd to me that many credit unions do not feel comfortableasking its membership to validate their email, phone, and mobileinfo but places like Walmart and Best Buy have no problem askingfor its customers to confirm email and phone number information ateach purchase.

If IT were to address one area only, this would be it. If youensure member data is current, your collection recoveries willlikely improve.

Have you ever noticed that most departments have their own buzzwords and jargon? If you are an IT professional and plan onworking with your collections group to find opportunities you needto understand the impact of a “promise to pay.”

A promise to pay is simply that. It's an agreement betweenthe credit union and the borrower on when the past due payment(s)will be made. Once a promise to pay is made, your collectionsdepartment must track whether the borrower met theobligation.

It goes without saying your collections department will needautomation for tracking these promises, and the manager will needto see the results per collector.

The good news is that most collection systems provide thistoday. And while a promise to pay is better than no contact,receiving payment “in the moment” is far better.

That is also possible today by offering pay by phone services,including payment by debit card and check (ACH). SWBC is onesuch provider. Some credit unions are also considering usingPayPal.

Not all collection activities are “member-friendly.” Onelittle-used process is what I call “monetary opportunity tracking,”which is essentially a real-time deposit alerts forcollections.

These alerts are triggered by an in-branch deposit or anincoming ACH item. Using the SSN as the key, when funds aredeposited into a past due account, the collections departmentreceives a real-time alert via email or even text message, if theydeploy the use of cell phones (a little trick for those creditunions who want a non-credit union number to use when contactingcertain borrowers). You could also place automated holds on thesefunds.

Most IT innovation is currently focused on front-line servicedelivery. However, I think time would be well spent placingefforts in working with these behind the scenes groups that,unbeknownst to some, has a significant influence on the creditunion's bottom line.

Improving collection efforts will more than pay for the time andenergy invested by IT. And in most cases, the return isalmost immediate (wish we could say that about all the “swank”things we deliver to the front-line).

JamesBurke-Frazier is with the Department of Special Projectsat Wescom Resources Group.