CRM System Doubles as Collections Support

Around the same time FirstOntario Credit Union was launching a new CRM system in April 2013, the $2.7 billion credit union was also reorganizing its collection department to improve efficiency and comparing three vendor solutions for collection management software.

But Chief Risk Officer Lloyd Smith and his team kept coming back to the idea of adapting the Automated Contact Expert (ACE) system—which already supports “constant communication” with members through its 27 branches and member contact center—for use in collections.

“It made sense for our programmers and Neocog [the vendor behind ACE] to work together to leverage this primary communication/sales tool that every staff member already opens every morning,” Smith says.

FirstOntario CU, Hamilton, was recognized with a Central1 Innovation Award for this solution. The new system, which replaces manual collection cards, automatically identifies accounts for contacts when loans are two days past due. At days five and seven past due, the credit union’s internal data center routes the accounts to the credit union’s partner, Credit Risk Management Canada. The firm makes auto-dialer contacts with these members using a script developed by FirstOntario.

At day 15, the ACE system refers the account for further action with in-house collectors, and if it is not up to date by day 75, it sends the account to Credit Risk Management Canada to continue collection efforts.

“The beauty of relying on ACE is that the system is intelligent enough that if an account is brought current, the collection contact is automatically closed,” Smith explains. “It facilitates connectivity, workflow and re-engineered collection reports.”

Collection officers can record when members promise payment on delinquent loans (for example, “I’m expecting a check on the 20th”), and the ACE future task function sends them automatic reminders to follow up with members on those dates.

The centralized collection department replaces a “fingers and toes approach” that involved branch staff, sometimes reluctantly, spending an hour or so a day contacting members with past-due accounts.

This new approach “offers more control and consistency in collections and recovery and frees up our member-facing staff to focus on the member in keeping with our strategic goal to enrich the member experience,” Smith says. As a result, delinquencies are down without additional staff even as the credit union continues to grow, and the new system should operate efficiently “even when we’re a $4 billion or $5 billion operation.”

FirstOntario CU is the first to use ACE for collections, but it may not be the last. Neocog plans to offer the collection functionality to other clients, Smith notes.

Karen Bankston is a long-time contributor to Credit Union Management and writes about credit unions, membership growth, marketing, operations and technology. She is the proprietor of Precision Prose, Stoughton, Wis.