TABLE OF CONTENTS. Collection Agency Operations and Technology Survey Page 2

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2 TABLE OF CONTENTS INTRODUCTION... 4 IMPACT POINTS... 5 OVERVIEW... 7 METHODOLOGY... 8 COLLECTIONS DEMOGRAPHICS... 9 BUSINESS STRATEGY: OPPORTUNITIES AND RISKS IMPACT ON GROWTH/PROFITABILITY TOP CONCERNS PAYMENT TECHNOLOGY TRENDS PAYMENT TECHNOLOGY USAGE AND ADOPTION TRENDS TRENDS IN FORMS OF PAYMENT HSA/FSA PAYMENT ADOPTION CONVENIENCE FEE ADOPTION PAYMENT PROCESSING PRIORITIES SERVICE AND TECHNOLOGY NEEDS COMPLIANCE RISK TRENDS PAYMENT PROCESSING AND COMPLIANCE RISKS PAYMENT METHODS AND COMPLIANCE RISKS PAYMENT COLLECTIONS PRACTICES AND COMPLIANCE RISK REPORTING AND OPERATIONAL MANAGEMENT CONCLUSION ABOUT BILLING TREE APPENDIX Collection Agency Operations and Technology Survey Page 2

3 LIST OF FIGURES How many agents/seats does your collection agency employ?... 8 What type of debt does your agency collect?... 9 Which software platform is your agency running to manage your collections? Please rate the importance of each area below as it relates to your agency s projected growth plan/profitability in Please rate the significance of your concerns related to your agency s collection operations in Technology Utilization, All Seat Groups Which types of payments does your agency currently accept? Do you offer your clients the ability to pay with an HSA/FSA account? Does your agency charge a convenience fee to consumers? Please rate the importance of each aspect of your payment processing experience with a payment processor What is the one technology you wish were available to your organization that is currently not available? How would you rate your company s compliance risk concerns as they relate to the following payment processing and account maintenance regulations and guidelines? To what degree do the following payment methods in use by your organization today pose a compliance risk? To what degree do the following payment collection practices pose a potential compliance risk and/or lead to customer complaints for your organization? What level of reporting detail do you typically rely on from your payment gateway to manage payment operations? Collection Agency Operations and Technology Survey Page 3

4 INTRODUCTION Collection Agency Operations and Technology Survey 2015 The 2015 Collections Agency Operations and Technology Survey represents the third consecutive year in which has collected data from hundreds of agencies of all sizes and asked them to share their perspectives about the opportunities and challenges they face to meeting their business objectives. The past three years have represented a period of transition, particularly from a compliance standpoint, with new regulatory agencies, new regulations and new enforcement policies emerging and evolving. During this time, survey responses have been generally consistent, and have painted a picture of agencies looking to technology to help address their biggest operational challenges, which has primarily been operating costs and compliance concerns. This year, some interesting new trends emerged, including: Parity on Portals: This survey indicates smaller agencies have caught up with their larger peers in terms of the adoption of online portals for payment collections. In fact, this year marks the first time in which no discernable trends could be seen by agency size in terms of online payment collection technology adoption. Persistence of Paper Checks/Money Orders: While agencies continue to adopt new payment technologies, acceptance and management of cash, paper checks and money orders persists. In fact, agencies forecast continued utilization of lock boxes for cash/checks/money orders. Convenience Fees: Adoption of convenience fees remains evenly split among agencies applying convenience fees or considering adoption, and those not using fees or discontinuing their use. The debate over convenience fee adoption seems to continue to center around unclear regulations that pose a perceived compliance risk to agencies. Clarity on Compliance: Perceived compliance risk was expressed throughout the 2015 survey, whenever agencies were asked about planned technology adoption or desired technology that had not yet been adopted. Each year, we receive at least one open-ended response that reflects the sentiments of one respondent in 2015 who said, the technology [we want is available, but the law has not been updated. As discussed in this survey, 2015 may mark the year in which additional clarity around regulations like the Telecommunications Communication Protection ACT and rulings from the Consumer Financial Protection Bureau will make it easier for agencies to navigate compliance requirements and allow them to adopt new methods and technologies to communicate with consumers and deliver efficient, quality service. These developments may lead to new innovations and new ways for agencies of all sizes to compete in a marketplace that promises continued growth and opportunity. Collection Agency Operations and Technology Survey Page 4

5 IMPACT POINTS Methodology: This benchmark report is based on a survey of over 200 U.S. accounts receivable management companies collected over a one month period. The survey focused on agencies involved in consumer debt and did not include business-to-business collections. Demographics: Respondents were split among four categories; 18.9 percent of collection agency respondents were from organizations with more than 100 seats, 14.4 percent with seats, 35.6 percent with seats, and 31.1 percent with between one and nine collectors. Importance of industry sectors: In aggregate, agencies cited healthcare as their major source of work (64%), with retail as a distant second (44.4%). Bank cards, Automobiles, and Commercial collections were all tied for the third most common revenue sources, with 35.6% of respondents selecting these options. Business growth: strategies and critical factors: Expanding their client base and adopting new technologies were the two top factors agencies cited as critical to growth/profitability in 2015, with cost cutting ranking a close third. Respondents regarded Compliance Policy/Procedure Implementation/Maintenance and Increased Operational Expenses as their top concerns with regard to their collections operations in Collection Technology upgrades/implementation ranked next in importance, based on a weighted average of responses, but was also most-cited as extremely important. Further underscoring the prominence of compliance as a concern, CFPB Regulation and Audit and FDCPA Lawsuits were ranked fourth and fifth among top concerns. The prioritization of technology and operational efficiency suggests that companies see automation as key to addressing these competing priorities. Forms of Payment and Payment Technology Adoption: Based on responses to the kinds of payment methods and technologies in use today by collections agencies, smaller agencies have caught up to their larger counterparts in terms of online payment adoption. Live agent-assisted payments still dominate as the most common forms of collection, although online payment processing follows close behind. Among agencies that collect credit/debit card payments via live agent, 80% also do so online. Among agencies collecting ACH payments via agent, 90% also do so online. That gap between live agent and online collections becomes even narrower when looking to plans for With regard to 2015 technology adoption plans, the gap between live agent and online collections drops to a mere 3%, with 97% of agencies collecting via live agents indicating they plan to use Web-based collections as well. Surprisingly, a large number of respondents (29.6%) still relied on lock boxes for cash/checks, suggesting that an opportunity still exists to spread awareness and adoption of more efficient and cost-effective payment methods. Nearly five times as many agencies plan on adopting virtual debt negotiation in 2015, as compared to In 2015, 24% of respondents indicated that they planned on adopting virtual debt negotiation, up from 5% in IVR adoption shows significant growth potential as well, with 18.3% of respondents using IVR in 2014, doubling to 32.4% in By comparison, text and social media collections continue to lag behind in current and projected adoption, suggesting that these payment methods still remain the domain of early adopters. HSA/FSA Payment Adoption: With regard to healthcare collections, our respondents indicated clear interest in accepting HSA/FSA payments, though less than half do so today. Over a third (33.9%) of respondents indicated that their agencies already accept HSA/FSA account payments, with more than a third (35.1%) of respondents expressing interest in doing so. Collection Agency Operations and Technology Survey Page 5

6 Convenience fees: Agencies continue to weigh the benefits of collecting convenience fees to offset payment processing costs against the potential risks of litigation or compliance audits. Nearly half of respondents (47.8%) either currently charge a convenience fee (37.3%) or are considering adopting them (10.5%). Consistent with prior surveys, over 40% have no plans to charge a convenience fee for electronic payments. Nine percent of respondents indicated that they used to collect convenience fees, but no longer do so essentially offsetting the number who expressed interest in adoption. Payment processing priorities: System uptime ranked highest in priority for agencies selecting a payment processor, with and PCI compliance and customer service tied for second place. Pertransaction pricing ranked behind customer service, system uptime and reporting capabilities. System integration rose in priority compared to prior years, securing a fourth-place ranking. This suggests that technology integration has been identified as increasingly critical to cutting costs while improving efficiency. Service and technology needs: When asked an open-ended question about services or technologies that they wish were available, respondents in 2015 had a wide variety of needs, though the most often cited responses were virtual negotiation (6.4%) and skip trace technology (6.4%). With regard to skip tracing, one respondent was clear about the need for a realistic and accurate skip tracing solution that is fairly priced. Payment Processes and compliance risks: Respondents cited Reg E concerns and the related regulatory issues with regard to recurring payments as the biggest Compliance Risk related to Payment Processing and Account Maintenance. Technology solutions to support document presentation, payments, and signatures and related compliance may help these agencies to better address these risks. CFPB Enforcement and Credit Card brand guidelines were both ranked closely behind Reg E/ESign, with 9% of respondents citing either CFPB or Credit Card compliance as High Risk. Payment Methods and Compliance Risks: Not surprisingly, agent-assisted payment authorization and notification was identified as the greatest compliance risk related to payment methods, followed by Web payments, with IVR identified as the lowest risk form of payment authorization and notification. Payment Collections Practices and Compliance Risk: Calling a cell phone was cited as the most risky collection practice, followed by securing recurring payments. Consent to Communicate was ranked as the third-highest risk, but was cited second most often as a high risk (12.5% of respondents). Payment Gateways and Reporting: Nearly 84% of respondents indicated they rely on their payment gateways to provide data that supports their management of their payment operations. A majority (62.9%) require full details, while 21% rely on summary information. This suggests that the need for an integrated payment technology solution is critical for agencies who want to effectively monitor and manage their operations. Collection Agency Operations and Technology Survey Page 6

7 OVERVIEW This third annual benchmark survey of accounts receivable management companies depicts an industry that has progressed down a path of technological advancement as a strategy to control operating expenses, support regulatory compliance and increase competitiveness. This year s survey marks a turning point, in which the industry has achieved near-parity from a collections technology standpoint between smaller agencies and larger firms. Continued growth for collection agencies, as expressed by survey respondents, depends on overcoming a variety of obstacles, many of them regulatory. Financial and operation risks resulting from a complex and dynamic regulatory environment represent the greatest challenges faced by collection agencies today. Addressing those challenges threatens to divert time, money and resources from the core objective of efficiently and effectively collecting payments on behalf of clients. As expressed in the responses to a number of survey questions, opportunities for further innovation and additional operational efficiency are technically feasible and desirable to agencies of all sizes. The limiting factor appears to be the pace at which regulations can keep up with technological advancement. Regardless of agency size, target industry or region, all agencies enter 2015 expecting it to be a defining year for the industry from a regulatory standpoint. It is widely expected that two major regulatory events will occur before the end of 2015: the Consumer Financial Protection Bureau will likely issue its proposed rule on debt collection and the Federal Communications Commission will likely take action on a number of pending petitions that seek changes and clarifications to the Telephone Consumer Protection Act (TCPA). Another turning point from a regulatory standpoint, in terms of enforcement, has been the FDIC s January 2015 regulatory guidance that instructed banks to judge their relationships with their customers on a case-by-case basis, rather than refusing to provide banking services to entire categories of industries. This guidance suggests a retreat from the "Operation Chokepoint" initiative, which targeted banks, collection agencies and other businesses serving the -Short Term Lending industry and other industries identified on a Justice Department "hit list." In the 2015 Benchmark Survey Report, first examines targeted industry segments and related growth trends according to the size of the agency. Secondly, we explore agencies specific strategies to achieving growth within these segments and to overcoming the challenges they cited as the most threatening to achieving those goals. Finally, we examine agency attitudes toward technology and automation, and discuss how automation poses a solution to the dual challenge of driving operational efficiency and innovation while protecting the organization from compliance risk. Collection Agency Operations and Technology Survey Page 7

8 METHODOLOGY Over 200 debt collection operations professionals took the survey over a one month period. In an effort to better understand the segmentation of the respondents we wanted to determine the various sizes of the organizations responding to the survey. To do so we asked how many seats or collection agents were employed. Respondents were given 4 categories to choose from: 1-9 seats, seats, seats, and 100+ seats. The results indicated the respondent pool was slightly weighted towards smaller agencies, with two thirds (66%) of responses coming from agencies with 25 or fewer agents and the remaining third from agencies with 26 or more agents. How many agents/seats does your collection agency employ? Agencies with more than 100 seats represented 18.9% of respondents, 14.4 percent with seats, 35.6 percent with seats, and 31.1 percent with between one and nine collectors. When the survey was analyzed through the lens of agency size, results demonstrated consistency across agencies regardless of the number of agent seats. From a technology perspective, results from this year s survey suggest that agencies are approaching parity as it relates to collections technology, particularly when it comes to online collections solutions. Collection Agency Operations and Technology Survey Page 8

9 COLLECTIONS DEMOGRAPHICS Collection agencies compete in a dynamic marketplace with a variety of opportunities across different vertical markets. Respondents to our 2015 survey suggested that most agencies maintain a diverse portfolio of clients, with healthcare presenting the greatest opportunity, followed by retail, auto, commercial and bank/credit card collections. What type of debt does your agency collect? (Please select all that apply) The most important sector to agencies of all sizes in 2015 was healthcare (64.4%) by a significant margin, followed by retail (44.4%) as a distant second. Auto sales (35.6%), commercial collections (35.6%), bank/credit cards (35.6%) were all tied for third place, followed by utility/telecom (34.4%). Student loans (22.2%), Government (22.2%) and Real estate/mortgage (18.9%) were all tightly grouped tertiary markets for collections agencies. Collection Agency Operations and Technology Survey Page 9

10 In 2013, more than half of survey respondents forecast growth in healthcare, more than any other industry sector. The rising prominence of healthcare, as predicted by s earlier survey, reflects the broader trends related to healthcare spending and debt. According to the Commonwealth Fund 2012 Biennial Health Insurance Survey, 41 percent of working-age adults, or 75 million people, had problems paying their medical bills or were paying off medical bills over time, up from 58 million in COLLECTIONS SOFTWARE When asked about the software platform agencies used to manage their collections, a majority of survey respondents indicated Other and Proprietary systems as their agencies choice for software platforms. Which software platform is your agency running to manage your collections? (Please select all that apply) Collection Agency Operations and Technology Survey Page 10

11 BUSINESS STRATEGY: OPPORTUNITIES AND RISKS IMPACT ON GROWTH/PROFITABILITY When asked to rate the importance of a variety of factors to achieving business growth/profitability in 2015 on a scale of 1 (lowest) to 10 (highest), agencies cited client expansion as a first choice (weighted average of 8.3), with new technologies enhancing collections as close second choices (weighted average of 7.8). Cost reduction strategies ranked a close third with a weighted average of 7.7 and received the second-highest number of 10 rankings. These priorities reflect the kinds of challenges that agencies expressed in a follow-up survey question with regard to their biggest concerns related to operations in The close ranking between cost reduction and new technologies enhancing collection suggests that agencies are looking to automate their operations to achieve greater efficiency. The need for greater efficiency and collections effectiveness is in part born out of concerns over increased operating expenses and over regulation as lawsuits. Please rate the importance of each area below as it relates to your agency s projected growth plan/profitability in On a scale of 1-10, 10 being most important, 1 being least important Collection Agency Operations and Technology Survey Page 11

12 TOP CONCERNS The following graph highlights the driving concerns for agencies in 2015, ranked from low (1) to high (10), which center primarily around Compliance Policy/Procedure Implementation/Maintenance (7.7 weighted average) and Increased Operating Expenses (7.6 weighted average). In 2015, Collection Technology Upgrades/Implementation (7.2 weighted average) gained prominence, while fourth ranked FDCPA lawsuits (7.1 weighted average) further underscored compliance-related concerns. Please rate the significance of your concerns related to your agency s collection operations in On a scale of 1-10, 10 being most important, 1 being least important Once again, correlating the question of top concerns back to factors impacting growth/profitability, we can see that agencies are being forced to focus time, money and effort on compliance and risk mitigation, while at the same time needing to reduce operating expenses. Technology and automation is one approach identified by survey respondents that can help them to achieve both by providing greater process transparency and allowing better access to the data needed to demonstrate compliance. Collection Agency Operations and Technology Survey Page 12

13 PAYMENT TECHNOLOGY TRENDS PAYMENT TECHNOLOGY USAGE AND ADOPTION TRENDS Compared to 2014 Survey results, smaller agencies are beginning to catch up with their larger peers with regard to online payment acceptance. Projections by respondents for 2015 suggest that the digital gap will become even narrower among agencies. Live agent-assisted payments still dominate as the most common forms of collection, although online payment processing follows close behind. Among agencies that collect credit/debit card payments via live agent, 80% also do so online. Among agencies collecting debt/credit card and ACH payments via agent, 90% also do so online. These results can be interpreted to suggest that companies adopting credit/debit and ACH payments are more likely to offer more channels like Web payments, accounting for the narrower gap between agency and online payment acceptance. That gap between live agent and online collections becomes even narrower when looking to plans for With regard to 2015 technology adoption plans, the gap between live agent and online collections drops to a mere 3%, with 97% of agencies collecting via live agents indicating they plan to use Webbased collections as well. With mobile collections made through a Web application falling into the category of online portal payments, it is clear to see that there is more than one consumer trend driving the growth of payments online. It is worth noting that we do not believe that survey results for the projected adoption of collection methods and technologies in 2015 suggest a diminished role for collections agents. While survey results show a disparity between agents employed in 2014 (87.3%) and planned for 2015 (83.1%), it is our interpretation that ambiguity in the survey question resulted in some respondents declining to identify live agents as planned if live agents were already in use at that agency in With regard to use of lock boxes for cash/checks/money orders (29.6% in use, 36.6% planned), survey results suggest that agencies continue to offer payment options for those without bank accounts and access to credit/debit card payments. An opportunity still exists here to spread awareness and adoption of more efficient and cost-effective payment methods. Collection Agency Operations and Technology Survey Page 13

14 Nearly four times as many agencies plan on adopting virtual debt negotiation in Used by only 5% of respondents in 2014, adoption by surveyed agencies is projected to be 24% in IVR adoption shows significant growth potential as well, with 18.3% of respondents using IVR in 2014, doubling to 32.4% in By comparison, text- and social media collections continue to lag behind in current and projected adoption, suggesting that these payment methods still remain the domain of early adopters. Technology Utilization, All Seat Groups Collection Agency Operations and Technology Survey Page 14

15 TRENDS IN FORMS OF PAYMENT Paper payments have not gone away, but more convenient methods of payment now dominate. Credit/debit card collections via agent (84.5%) remains the most popular form of payment, followed by bank-deposited paper checks (80.3%). Over seventy percent (71.8%) of respondents accepted credit/debit card payments online the same percentage that continue to accept cash payments. From a compliance standpoint, each form of payment incurs its own compliance risks and must conform to its own standards and guidelines with regard to security and authorization. This adds to the compliance burden for agencies. Those relying heavily on paper transactions likely have not automated their processes, resulting in higher operational costs and greater exposure to compliance risk or human error when reconciling. Which types of payments does your agency currently accept? (Please select all that apply) Collection Agency Operations and Technology Survey Page 15

16 HSA/FSA PAYMENT ADOPTION With regard to healthcare collections, our respondents indicated clear interest in accepting HSA/FSA payments, though less than half do so today. Over a third (33.9%) of respondents indicated that their agencies already accept HSA/FSA account payments, with more than a third (35.1%) of respondents expressing interest in doing so. Do you offer your clients the ability to pay with an HSA/FSA account? Collection Agency Operations and Technology Survey Page 16

17 CONVENIENCE FEE ADOPTION Convenience fees: Agencies continue to weigh the benefits of collecting convenience fees to offset payment processing costs against the potential risks of litigation or compliance audits. Nearly half of respondents (47.8%) either currently charge a convenience fee (37.3%) or are considering adopting them (10.5%). Consistent with prior surveys, over 40% have no plans to charge a convenience fee for electronic payments. Nine percent of respondents indicated that they used to collect convenience fees, but no longer do so essentially offsetting the number who expressed interest in adoption. Does your agency charge a convenience fee to consumers? Collection Agency Operations and Technology Survey Page 17

18 For debt collectors, convenience fees represent an opportunity to lower operating costs for themselves as well as their clients. The practice of collecting a convenience fee for alternate forms of payment has been considered a common practice in the ARM industry. In some cases, agencies collect fees from the consumer to help cover operating costs associated with alternative forms of payments, in exchange for the convenience of a simple, effective payment method. In other cases, vendors (usually the payment processor) collects a convenience fee to cover the agency s transaction processing costs. In light of the ascendance of the CFPB, however, debt collectors and their clients are seriously evaluating how to proceed with convenience fees. Today, convenience fees and surcharges represent the most illdefined and most contentious practice among merchants and their third party representatives. With federal, state, credit card and bank stakeholders continuing to sort through the issues, it is more critical than ever that agencies assess and monitor their risks with regard to convenience fees. Because the (re)interpretation of existing laws and standards remain in flux, policies must be evaluated continuously, with revisions to procedures according to changes in federal, state or local laws, as well as bank or credit card guidelines. Collection Agency Operations and Technology Survey Page 18

19 PAYMENT PROCESSING PRIORITIES In the competition between cost cutting and reliability, on a scale of 1 (low) to 10 (high), respondents overwhelmingly chose reliability (in the form of system uptime and PCI compliance) over cost (or transaction pricing) when it came to selecting a payment processor. System uptime (8.6 average rating) ranked highest in priority followed by PCI compliance (8.5 average) for agencies selecting a payment processor, with per-transaction pricing ranking seventh (7.9 average), customer service (8.5 average), integration with a core payment system (8.5 average), reporting capabilities (8.0 average) and bank relationships (7.9 average). The importance of reporting and integration above transaction pricing further emphasizes the importance and value of automation and efficiency to agencies today. Please rate the importance of each aspect of your payment processing experience with a payment processor. On a scale of 1-10, 10 being most important, 1 being least important Collection Agency Operations and Technology Survey Page 19

20 SERVICE AND TECHNOLOGY NEEDS When asked an open-ended question about services or technologies that they wish were available to their organization, one respondent summarized the needs as expressed by the majority of survey participants; the technology is available, but the law has not been updated. As reflected in a variety of responses to questions throughout the survey, collection agencies of all sizes have clear goals and well defined strategies to achieve them. They acknowledge that technology and automation is available to assist them in achieving their goals. Where they see ambiguity and uncertainty is in how the tools and methodologies at their disposal align with a dynamic and multi-faceted compliance environment. In light of this challenge, respondents value technology partners that provide a higher level of service and expertise, offer data security and assurance of compliance and provide integration to existing automated systems. While a majority of responses to this open-ended question could not be categorized (76%), a trend emerged among those agencies who desired solutions for IVR (9%), Skip tracing (7%), virtual negotiation (7%), compliance technology (7%) and compliant communications solutions (4%). What is the one technology you wish were available to your organization that is currently not available? Collection Agency Operations and Technology Survey Page 20

21 Other Additional responses/comments included: REG E Compliant web payment portal for recurring payments Telephone messaging without fear of lawsuit. Data encryption Cloud call center with chat and mobile phone capabilities. Enhanced reporting Ability to auto block recording of csv/security codes taken via account rep over phone. Automated calls to consumer smartphones Speech analytics Collection Agency Operations and Technology Survey Page 21

22 COMPLIANCE RISK TRENDS Since prior-year surveys exposed agency concerns regarding compliance risks, opted to expand the 2015 survey to explore the specific regulations, payment methods and payment collections practices that pose the greatest risks to their operations. PAYMENT PROCESSING AND COMPLIANCE RISKS On a scale of 1 (low risk) to 10 (high risk), respondents cited Reg E/Esign concerns (5.0 weighted average) and the related regulatory issues with regard to recurring payments as the biggest Compliance Risk related to Payment Processing and Account Maintenance. Technology solutions to support document presentation, payments, and signatures are available today to help these agencies to better address these risks, including support for mobile devices. CFPB Enforcement (4.9 weighted average) and Credit Card brand guidelines (4.9 weighted average) were both ranked closely behind Reg E/ESign, with 9% of respondents citing either CFPB or Credit Card compliance as High Risk. How would you rate your company s compliance risk concerns as they relate to the following payment processing and account maintenance regulations and guidelines? On a scale of 1-10, 10 being most important, 1 being least important Collection Agency Operations and Technology Survey Page 22

23 PAYMENT METHODS AND COMPLIANCE RISKS On a scale of 1 (low risk) to 10 (high risk), agent-assisted payment authorization and notification (weighted average 4.7) was identified as the greatest compliance risk related to payment methods, followed by Web payments (weighted average 4.1), with IVR identified (weighted average 3.1) as the lowest risk form of payment authorization and notification. The risks related to live agent-assisted payments are no surprise. Whether these risks relate to interaction in which agents may or may not speak from scripted communications for compliance purposes, or the risks related to agents manually gathering payment information, human error is an ever-present concern. While Web payments present the same degree of automation and process standardization as interactive voice response (IVR), the perceived risk of security breaches or fraud likely resulted in a higher risk rating for Web payments. These results suggest a role for IVR beyond providing 24x7 convenience to mitigating operational and compliance risk. As survey results reflecting the adoption of IVR suggest, opportunity exists for agencies to capitalize on the twin benefits of IVR solutions for inbound and/or outbound collections. To what degree do the following payment methods in use by your organization today pose a compliance risk? On a scale of 1-10, 10 being most important, 1 being least important Collection Agency Operations and Technology Survey Page 23

24 PAYMENT COLLECTIONS PRACTICES AND COMPLIANCE RISK When asked to rank compliance risks from 1 (lowest) to 10 (highest) associated with collections practices, Calling a cell phone (average rank 6.1) was cited as the most risky collection practice, followed by securing recurring payments (average rank 5.4). Consent to Communicate was ranked as the thirdhighest risk (average rank 4.7), but was cited second most often as a high risk (12.5% of respondents). Today, technology solutions are available for agencies who wish to comply with TCPA regulations and communicate with consumers. Mobile voic solutions allow agencies to leave a pre-recorded message onto a cell phone voice mailbox without calling the consumer s phone. The legality of Mobile Voic Messaging hinges on two major points: 1) the Federal Communications Commission (FCC) has defined voic as an Enhanced Information Service and has chosen not to regulate these enhanced services; and 2) the Mobile Voic Messaging service creates a landline to landline call directly to the telephone company s voic server, therefore there is no direct contact with the consumer. To what degree do the following payment collection practices pose a potential compliance risk and/or lead to customer complaints for your organization? On a scale of 1-10, 10 being most important, 1 being least important Collection Agency Operations and Technology Survey Page 24

25 REPORTING AND OPERATIONAL MANAGEMENT Nearly 84% of respondents indicated that they rely on their payment gateway servicer to provide data that supports their management of their payment operations. A majority (62.9%) require full details, while 21% rely on summary information. This suggests that the need for an integrated payment technology solution is critical for agencies who want to effectively monitor and manage their operations. What level of reporting detail do you typically rely on from your payment gateway to manage payment operations? Collection Agency Operations and Technology Survey Page 25

26 CONCLUSION From the perspective of, technology service providers have a more critical role to play than ever in helping collection agencies remain competitive in a dynamic marketplace by maximizing revenues and controlling operational costs while mitigating compliance risk. Beyond simply processing transactions, industry-leading payment processors partner strategically with their clients to provide education and guidance on best practices to maintain regulatory compliance. They share technology knowledge and expertise to help ensure security and streamline and automate processes. They foster industry relationships to support technology implementation and integration among payment collections systems to maximize clients return on investment. By 2016, we expect to see prevailing trends in terms of payment technology adoption to continue, with agencies increasingly turning to their technology partners for knowledge, guidance and expertise. As the compliance picture becomes clearer, 2016 should reveal new opportunities for agencies to further streamline operations and adopt new, even more innovative ways to serve the needs of their clients while providing quality service and 24x7 convenience to their customers clients. Collection Agency Operations and Technology Survey Page 26

27 ABOUT BILLING TREE Headquartered in Phoenix, Arizona, Billing Tree is developing ways to make it easier for people to get paid for their products and services. Billing Tree has become the trusted, competitively priced, and proven solution provider to a variety of industries looking to increase efficiency and process payments quickly. Billing Tree has lead the way with progressive, innovative solutions that address the diverse needs and challenges surrounding the payment process. With our experience in the payment industry, we have developed the most reliable, user friendly payment solutions in the world today. The Billing Tree mission has always centered on simplifying the often-confusing world of electronic payments, thereby allowing clients to focus on their core competencies. Billing Tree combines state-ofthe-art technology with decades of customer-service experience to give clients the latest payment solutions available to succeed in a highly competitive marketplace. Billing Tree continually strives for excellence through superior technology and industry expertise. Driven by a need to create solutions that provide customers with strategic advantages in their marketplaces, Billing Tree has become the industry expert in payment technology. APPENDIX Results from s prior Collection Agency Operations and Technology Surveys can be found on the Web site at the following locations: 2014 ARM Survey Report: ARM Survey Report: # # # Collection Agency Operations and Technology Survey Page 27