The online lending space is experiencing tremendous interest, leading to explosive growth and an influx of capital. Many companies grow overnight, raise big rounds of venture capital; vying for a piece of an increasingly competitive market. While top-line growth and customer acquisitions are top of mind for new and existing players, the increase of competition puts a lot of pressure on margins. When focus moves to profitability and unit economics, reducing defaults has a significant impact. After optimizing underwriting criteria, many lenders turn to optimizing collection and recovery strategy.

Now, there is a limited set of tools available to collection strategists, especially considering it’s a service that’s been around for millennia. Traditionally, companies collect in-house, outsource to an agency, sue debtors, or sell their debt (or any combination of the above). Are these tools efficient? Which ones are best? And specifically – should new lenders sell their debt?

Continue reading “Top Three Reasons Lenders Shouldn’t Use Debt Sales (and Two Reasons They Should)” →

Happy to see our name on Forbes’ Fintech 50, recognizing industry leaders. As Forbes puts it, “Digital disruption is going to soon affect every aspect of your money: how you earn it, save it, invest it and spend it.”

Read more here.

The debt collection industry is under increased scrutiny; some say it’s under attack by consumer advocates and government regulators. Though this has been the situation for decades, detractors have had some notable successes in the past few years. Between the CFPB’s enforcement actions and the FCC’s recent ruling regarding consumer consent in phone communications, the key tenets of the industry are on shaky ground. With increased scrutiny on how consumers are contacted via phone, it’s hypothesized that collection calls will disappear from the collector’s toolbox (or be significantly reduced in volume, in favor of legal action).
Continue reading “Three Reasons Collection Calls May Be Vanishing” →

What do collection vendor managers look for in a new collection service? A vendor manager often receives 3-5 pitches a week from new collection services. As it stands, onboarding a new service is difficult due to regulatory compliance while promises of better performance abound. Still, returns are often weak. Currently, technology is limited in the collections space, so the best thing a vendor manager can do is place accounts with a service for 4-6 months; inferring collection rates from monthly remittance reports.

This dynamic no longer makes sense. Technological progress means that debt collection can be a controlled and data-driven process. Being a modern collection service means using more sophisticated tools for better results. Now vendor managers can demand more of the next service that pitches them for their collections portfolio.
Continue reading “Every 21st Century Debt Collection Service Must Include These Three Features” →

In July of this year, I published a post about the importance of feedback – making it part of a team’s day-to-day way of functioning and investing in training on how to give, receive and take it beyond managers and direct reports. Three months later, I am reflecting on how TrueAccord is working to implement these principles.

In TrueAccord’s June/mid-year round of employee performance reviews, the leadership team debated about whether to spend time getting peer and upward feedback. We ended up doing it, though mostly over email (I find in-person conversations with the feedback-giver more effective – but it takes more time).
Continue reading “Active Feedback in Practice” →