Debt Servicing Automation Case Study

A Debt Servicing Company Sees a Need

This story reflects the experience of a confidential client: a manager and servicer of domestic and international consumer debt portfolios for credit grantors and debt buyers.

This company manages and collects on accounts that are serviced by various creditors and debt owners. The company uses its network of independently owned and operated collection agencies and law firms to further enhance its abilities to collect on a nationwide basis. The Customer Service Department handles traditional customer service issues on behalf of account owners for the accounts placed with them. In 2006, they were handling 12.8 million accounts in conjunction with more than 50 collection agencies and more than 200 attorneys.

On average, the company receives approximately six million pages of correspondence annually; 750,000 of which are customer service related. The growth in mail volume required regular overtime and additional hires within the Customer Service Department.

Due to the sensitive nature of the industry, there were a lot of compliance issues and extensive manual precautions that needed to be enforced to ensure customer privacy. This resulted in a push to examine the current system and find ways to improve efficiency. The goal was to handle the consistent growth in volume while maintaining compliance standards, without hiring more staff.

After careful consideration and the implementation of Lean and Six Sigma methodologies, the company pinpointed areas for improved efficiency. They decided to use Hyland Software’s OnBase and came to KeyMark for a customized solution.

It Begins in the Mailroom

This clients Mailroom handles millions of pieces of mail a year and 300 different types of standard documents. They decided to automate to better organize and track customer service mail.

The previous process for customer mail was to receive, count, track and log the mail. They would then generate letters, make calls and send the physical mail to Iron Mountain for storage. With KeyMark’s assistance, they began to automate by scanning customer service mail with two Kodak Alaris scanners and implementing OnBase Workflow and the application enabler modules. The goal was to streamline the customer service mail process and to have the mail serviced within one day or in real time. Within the implementation time of OnBase, they experienced a 37% decrease in cycle time. They now receive, sort and scan all customer service mail and they no longer hand deliver mail to customer service representatives.

Along with the scanning of incoming mail, they established an OnBase workflow system to request unscanned documents that were kept in permanent storage. The client was able to integrate its document request and delivery process with OnBase through the use of application enabler. Users now receive an automated notification of a documents current status, resulting in less uncertainty and follow up for the end-user. Cycle time was also reduced drastically.

All Mail Accounted For

Scanning mail in the Mailroom has given them an increased sense of security for all incoming documents. Previously, incoming mail would touch a number of different hands in a number of different departments. Today, incoming mail never leaves the Mailroom.

The Mailroom and the Customer Service Department can now track the volume and type of incoming documents electronically from their desktops. There are no more manual counts and all mail is tracked and monitored, leading to less human error and a greater level of accountability. The Mailroom and the Customer Service Department also witnessed a 50% reduction in paper and printing costs as a result of the KeyMark implementation.

Due to the efficiency of OnBase and the reduction in manual time spent on non-value added activities the Mailroom Manager was able to streamline her processes and is now beginning to cross train employees in other areas of the business. The Mailroom is currently investigating the potential uses of Captaris’ RightFax as well. In the past, two full-time employees were responsible for processing daily faxes. Now, one person handles faxes for only a portion of the day. With the potential implementation of RightFax, the need to print and store faxes will be reduced or eliminated. The Mailroom was so successful in reaching its overall goal that their Mid West office is now considering automation as well.

Better Serving the Customer

This client saw the greatest impact of the implementation of OnBase in their Customer Service Department. The Department handles roughly; 35,000 inbound calls, 8,500 resolved disputes, 31,000 resolved credit bureau disputes and 18,000 answered mail correspondence monthly.

“Mail processing has sped up from one person handling four pieces of mail an hour to one person handling 12 pieces of mail an hour,” said the manager of the Correspondence and Dispute Team for the Customer Services Department.

They have seen a 300% improvement in customer service correspondence handling and they have been able to increase response times so all mail is received and processed within 48 hours.

Before OnBase, customer correspondence was summarized into notes and used as a reference when talking to customers. Now the full electronic version of the document received is available for representatives so they can find the information from their desktop instead of physically retrieving it from Iron Mountain or permanent storage.

Often customer correspondence needs to be processed and sent to outside credit vendors.

This process is now completely automated. Correspondence is forwarded electronically on a nightly basis, saving money on mailing costs and reducing the amount of time required for vendors to receive and respond to customer related correspondence. Outside vendors are also happier because they prefer receiving the documents in an electronic format for storage.

The Management Perspective

Managers see huge benefits in the increased visibility of the full correspondence process in real time. There is now a clear indication of when things happen and where they could be improved.

“I am thrilled to be able to better utilize my team,” says one manager. “Where 24 people used to be needed to manage mail, I now only need 16.”

The company’s management team is in control of the priority strategy of all correspondence needing to be handled, which has led to positive gains in training new employees. They can hand select correspondence (using a search) for training purposes. They are able to train with real documents in their training queue. They can also search for specific types of documents, allowing employees to learn in real time without affecting accounts.

The client has been able to manage work more evenly amongst employees. Documents are scanned into the OnBase system and prioritized. The most vital documents are processed first and documents that require more time are evenly distributed to employees so there is an even work load.

“Support amongst employees has been incredible,” said one manager.

Employees are compensated with bonuses for processing a certain amount of correspondence. Management is able to track a representative’s entire output more efficiently. Within OnBase, the client is able to utilize audit queues that provide audit documentation to help keep track of their progress. On top of the other benefits of automating, they are able to have a clean desk policy improving privacy and security for their customers.

Reduced Error, Increased Efficiency

Overall, the client has been able to track huge gains in the past year and half with the implementation of OnBase.

“The OnBase system has reduced our margin of error by up to 95%,” said the Senior Director of Customer Service.

The prior mail sorting and managing system had huge opportunities for error due to the amount of hands that were involved with each correspondence.

“Due to legal requirements, efficiency was made very difficult,” said the manager. “With OnBase there have been huge gains in efficiency, a reduction in resources applied to the correspondence process and less manual movement of documents.”

The system has already paid for itself in full and the company looks forward to calculating the full return on investment at the end of the year.

Future Plans

The company has future plans to implement OnBase Workflow into other departments.

“The current application works great. KeyMark has been very hands on and helpful – a great cooperative effort,” stated the client.