Collections software vendors weigh the consequences an Internet-driven society will have in the collections world.
By Darren J. Waggoner
With the Internet reshaping how the world does business, it comes as little surprise to see collections software vendors studying the Internet's role in their business.
Collections agencies and lenders are using the Web to communicate with clients, and sometimes debtors. But the prospects of the Internet moving beyond a role as an alternative communications tool for agency-debtor contact seem slim, software vendor executives say. "The only debtors who are going to go online to manage their accounts are those who have an inclination to pay on their own," says Andrew Geffen, president of Jamm Software, Baltimore. "I'd say 50% to 80% just don't want to pay, so the call center isn't going away anytime soon."
Software developers, aware the Internet can make the collections business easier, began making room on their database applications, like Microsoft Visual FoxPro, SQL Server, and Oracle, to support the Web's XML and HTML languages as native file formats. This allows data to be saved to that format for use on the Web.
Creditors now get real-time productivity reports on collections activities, greatly improving the speed and effectiveness of their business, says Brad L. Chenoweth, Muncie, Ind.-based Ontario Systems' vice president and general manager, collections system division."Rather than sending stacks of reports on a monthly basis, everyone can just dial up an Internet connection and get the information any time," he says.
The Internet's role in agency-to-debtor negotiations is murkier. Collections agencies realize that a Web-savvy generation left school years ago and its members are now racking up debts like the generation before them, prompting a desire to offer some functionality on a Web page.
"There is heavy interest in giving debtors the ability to go through a website and ultimately arrive at a promise to pay off a debt, all without the involvement of a person on the other end," says Steven M. Gerow, Ontario Systems' manager of strategic marketing.
Ontario Systems believes the industry will evolve from having call centers to contact centers, with features like Web-chat sessions becoming the norm. "The generation coming out of college is used to communicating in that fashion," he says. "It could take the place of a verbal telephone conversation with the debtor."
Privacy concerns, legal issues, and the fact debtors can always change their e-mail addresses make it doubtful, at least in the near future, that agencies can count on the Internet to be anything beyond a separate communications source, says Thomas J. Bacak, vice president of development, Lonestar Turn-Key Systems, Houston. "We've seen a lot of folks want more and more integration with the Internet, as far as contacting their customers or working with vendors, and being able to get information back and forth faster," Bacak says.
Lonestar is developing many products to help, including in the area of using the Internet to help collections agencies and debt buyers work with creditors, says Brian R. Belger, Lonestar's vice president of marketing and business development.
Some collections agencies are taking advantage of the technology to make payment arrangements with debtors, who in many cases prefer negotiating by e-mail rather than on the phone with a real voice. Imperial Collection Services, a San Francisco-based contingency agency, uses its website to communicate with clients whose accounts they are working in WinDebt, Lonestar's collections software product.
They also use it to make payment arrangements with debtors. Jamm Software plans to add Web capabilities to its software this spring, enough to allow debtors the option of setting up payment plans online. Geffen believes all collections software packets will carry some type of Web interface within the year.
"Some debtors are just embarrassed to call up and talk to someone about their debts. They may want to pay, but don't want to talk to a collector, who they think might be mean or rude," he says. "That's where the Web comes into play."
Otherwise Geffen, whose company makes Caesar Collections Management Software, believes the Internet is simply the industry's latest buzzword.
"There's a lot of hype to it. Everyone thinks they have to get on the Web," he says. "It's convenient, no doubt about it, and it allows clients to get online whenever they want and not have to bother the agencies. So there are certainly some advantages."
Marlene Rosati, marketing director, CenterForce Technologies Inc., believes the collections industry has been slower to adopt Internet technologies than the customer service and retail sectors.
CenterForce instead concentrates on helping customers measure performances, something it believes is getting lost as the technologies available to customers grow. "We've built a system that collects performance information and learn things like, 'What effect training has had on performance?' or, 'What are the star employees doing right?' "
But Daniel R. Hornung, president, Roydan Enterprises, Manitowoc, Wis., believes vendors must pay attention to the Internet. The need for the immediate availability of information will change the market.
Hornung agreed to an online interview while working on a relief project in Honduras, an interview that illustrates how the Internet is changing the way business is done, he notes.
"Communication and control is what we all seem to be seeking," he says. "Instant communication of account information, agency statistics, and creditor's employee conformance with internal policies allows creditors to obtain a sense of control that was heretofore non-existent."
Roydan Enterprises is the developer of Bloodhound debt collections software and a forerunner in creating a commercially available Web interface for its software. Company officials believe the Internet offers a great opportunity to add efficiency to the collections process, and they report that their agencies call the Web interface an "instant sell" for their own clients.
Collections agencies now can get account listings through e-mail or file transfer protocol sites, rather than on paper or diskettes. "Bloodhound's Web interface provides a secure method for an agency's clients to access its accounts, instant information, 24 hours a day," Hornung says. "Our software allows the client and agency to share information rather than just displaying it."
Jim Hubbard, president of Birmingham, Ala.-based Jim Hubbard & Associates, developer of the Collection Partner software system, has used the Internet for at least four years to help send information from law firms in its attorney network to various credit-granting clients.
Hubbard believes there is ample opportunity to use the Internet for business-to-business communications, but contact with debtors will be a tough sell because of possible Fair Debt Collection Practices Act violations. "I see the Internet as a logical alternative for contacting debtors, but not a replacement for call centers," he says.
Chenoweth and Gerow, of Ontario Systems, both have witnessed a high percentage of agencies working to establish a Web presence, from a simple website to a system allowing them to receive communications from debtors. The next step, they say, is providing two-way communications. "A lot of what has been done at this point, these companies can do without any integration from us," Chenoweth says. "The clients we have met with about the Internet all feel like they would deploy it first in their relationships with their existing clients."
Gerow says interest in how to best use the Web is high. "Right now, most collections agencies spend tons of money on postage contacting debtors. A lot would like to be able to send e-mail instead,"he says.
Who's Who in Collections Software
Accelerated Data Systems
Provides software set-up for debt collections operations.
Account Receivable Processing Co.
CashApply, a PC-based cash application system customized to client business rules, accepts EDI and bank lockbox cash receipt files, creates small item write-offs, debit memos for deductions and verifies cash discount amounts.
Affirmative Technologies Inc.
Palm Harbor, Fla.
Offers a full range of check services, including electronic payment processing, NSF check recovery, check guarantee, verification, and collections software.
American Management Systems Inc.
International business and information technology consulting firm that provides Next-Generation Enterprise business and technology solutions.
American Software and Computers
Offers CreditSmart, credit bureau access software, and Credit Star, credit access, bureau reporting, and complete credit management.
ARCH Development Corp.
Forest Hill, N.J.
Provides Marc-The Creditor's Assistant, collections software suitable for networking or single users.
Aries Data Corp.
Pound Ridge, N.Y.
Bank search and subpoena software, collections software.
Austin Logistics Inc.
Develops decision support systems for risk management, including collections and recovery. Lead product is CALLTECH.
Automated Collection Control Inc.
User-friendly collections software designed especially for collections agencies.
Offers patented checks by phone or fax system for collection agencies and credit departments.
Beresford USA Inc.
Provides specialized software for the client/server marketplace, including new technology for banks and other creditors.
BFrame Data Systems Inc.
BFrame 2000 is a flexible, comprehensive collection and recovery management system with large agency power and features in a low-cost file server.
Specializes in e-commerce, bill presentment and payment, ACH processing, and portfolio management software.
Chi/Cor Information Management Inc.
Manufactures Internet-enabled, integrated deduction management and promotional trade funds management software for consumer goods manufacturers.
Collection Data Systems
Simi Valley, Calif.
Offers receivables management solutions, including CollectOne-Tiger, CDS-RMS-Tiger, Claimstat medical billing module, and the CollectOne predictive dialer.
Columbia Ultimate Business Systems Inc.
Solutions include The Collector System management software, ManageMed healthcare receivables, Immedia letter outsourcing and data management services, and the Quantum family of integrated dialers and voice response systems.
Commercial Legal Software Inc.
COLLECTION-MASTER, a Windows application for high volume debt collection specialists includes trust accounting, commercial and consumer billing and remitting, report generator, integration with WordPerfect/Word, imaging, credit bureaus, and EDI interfaces.
Compass Computer Solutions Inc.
East Meadow, N.Y.
A leading developer of imaging software for collection agencies.
C.A.M.S., a full-featured cardless collections agency management system specializes in retail consumer with commercial, medical, and legal extension, and offers predictive dialer, letter outsource, credit bureau, skip trace, and client import interface.
Computer Associates International Inc.
PC-based host interactive systems designed to automate delinquency collections and recovery of problem loans and/or special assets.
Computer Manager Inc.
Debt$Net provides business and collection services and works with DOS, Windows 3.1, Windows 95, Windows 98, and NT.
Comtech Systems Inc.
Collect! for Windows features data import, mail batching, contact management, account matching, and credit bureau reporting.
Comtronic Systems Inc.
Cle Elum, Wash.
Debtmaster has real-time collector statistics, user configurable desktops, and special quick-entry data forms.
Cornerstone Collection Support Inc.
Assists collections agencies and attorneys with license and compliance issues nationwide.
CR Software Inc.
Designs, markets, installs, and supports collection resource system package that automates debt recovery process.
CSC Financial Services Group
Provides management consulting, information solutions, and technology to the global financial services marketplace.
DAKCS Software Systems Inc.
Produces software systems for the accounts receivable management industry, including utilities, healthcare facilities, financial institutions, collections agencies, and credit bureaus.
Dubuque Data Services
The DDS "ADVANTAGE" is a full featured computer solution for collections agencies, tracking collector activities and debtor contacts while maintaining information for client reporting.
E Commerce Group.
Develops applications for the financial services industry in areas such as collections, recovery, and payment processing and specializes in bankruptcy recovery services.
Provides credit, financing, and receivables management solutions for business-to-business and business-to-consumer commerce.
Provides "bolt-on" credit, collections, and deduction management software for any A/R System.
Guthrie Phillips Group
Its Windows Collections Activity Tracking System lets clients manage overdue accounts, efficiently organizing workloads.
GWA Information Systems Inc.
Provides products and services, including the Advanced Collection System, to the digital equipment user community.
Intelligent Banking Solutions Inc.
New London, N.H.
Provides debt management solutions to the financial industry.
Caesar collections software is fully customizable and flexible, and includes all technology upgrades.
Jim Hubbard & Associates Inc.
Collection Partner includes such legal collections options as automatically generated checks, remittances, and invoices; trust accounting; document generation; standard and flexible reporting and more.
JS Technologies Inc.
Easy-to-use collections software automatically calculates interest, fees, and remittance amounts.
Offers ESP, a client-definable tool with a product suite to manage all phases of debt collection, and Partner.net for management of accounts placed with outside agencies and attorneys.
Lonestar Turn-Key Systems Ltd.
Provides WinDebt collections software and other leading-edge technology solutions for the collections and bad debt markets.
NMC Technologies Inc.
Owings Mills, Md.
Develops accounts-receivable and credit software solutions that support multiple companies and divisions, multiple currencies, and three-level customer hierarchy.
Ocwen Technology Xchange Inc.
West Palm Beach, Fla.
Collections!, a year-2000 compliant graphical product, supports
residential mortgage collections, plus the servicing of REO and default loan bankruptcies.
Ontario Systems Corp.
Offers FACS, a leading third-party platform, and CT Vision, a flexible first-party platform, and plans to release ARCHITECT RMS, giving companies complete access to their databases to better manage accounts.
PaySys International Inc.
Provides financial transaction processing applications such as VisionPLUS, CardPac and VISION21, as well as the Commercial Payment System, a web-enabled solution.
Process & Technology Consultants Inc.
Specialized consulting and technology services for interface development, file transfer management, process automation, portfolio analysis, scoring and collection host systems.
A/R management system with inference engine designed to be utilized with user-defined knowledge base to make decisions on par with those
of a human.