Magazine article Business Credit

Cutting Loan Delinquency Rates

Magazine article Business Credit

Cutting Loan Delinquency Rates

Article excerpt

Our collectors at Frost National Bank, San Antonio, Texas previously handled installment loan collections manually from a hard copy report each morning. This system allowed for approximately 14,000 calls and 2,000 letters each month. The delinquency rate was approximately 2.65 percent, which management considered to be above the acceptable level. However, collectors were spending too much time on the paperwork and not enough time on the phone.

In an effort to reduce the delinquency rate and increase productivity, we evaluated a variety of computer-based collection systems. We were already using a local area network, and the users were familiar with PCs, so we wanted a system that could be executed on a PC without depending on a mainframe system. We selected the Shaw Systems CS/2000 collection software because it can run on a PC and is suitable for high-volume collection work.

The greatest advantage of the CS/2000 system is that it allows a fairly computer-literate manager to automate many time-consuming aspects of collections without the help of a computer programmer. The first workflow feature we used was the predefined support list. It allows a collector or supervisor to process paperwork simply by entering the proper activity code in the program. If a supervisor's approval is required, the collector assigns the account to the supervisor's list and adds a note requesting approval. If the supervisor approves the request, he or she can then assign it to the proper clerk without leaving the workstation.

The more complicated procedure for requesting an extension was automated with only slightly more effort. I added a list to the work area, created an activity code for it, and assigned the list to the clerk who previously handled extensions. Now, when a collector requests an extension, it is assigned to this list, goes on the supervisor's list of activities, and automatically to the clerk's list of activities.

Skip-accounts previously took a large amount of time for collectors not experienced with this kind of work. Our old system was too cumbersome to efficiently transfer skip-accounts to our expert in skip tracing. With the CS/2000, the process has become almost instantaneous. Our skip expert has been successful in locating 90 percent of those accounts. The productivity of the other collectors has increased as well because they have been able to focus on their calling volume.

Changing the workflow of the organization is simple and can only be made by a manager. It is very easy to include a supervisor's review before an account is transferred to a different list. …

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