Unfortunately, it was reported yesterday that firms are going bust at the fastest pace since 2009. In the rapidly changing world of financial services, maintaining a healthy loan portfolio and managing delinquent accounts is critical to success. Having a first-class collections and recovery team may be a huge differentiator in 2024 and beyond.

All businesses are a collection of people. Even product led businesses required someone to invent the product. In service-based industries, like financial services, employing and hiring the right talent is everything. The key first step is to have a leading employee value proposition(EVP). Firms have been incredibly busy since the pandemic and whilst EVPs have adapted and changed, they need to be regularly and formally reviewed to ensure that they position you as an employer of choice.

Simple changes to hiring processes can also make an enormous difference. Create an interview panel, which tests candidates’ skills in different ways. Perhaps incorporate role-plays into the hiring process. Make sure the panel has clear guidelines on the skills and competencies required to take the team to the next level. Ensure job descriptions are accurate and identify the skills required will help attract the right talent and will again help interviewers screen against agreed competencies. Technical knowledge is key to collections and recoveries teams, a knowledge of the legal and compliance requirements essential, but high performing collections and recovery professionals also have outstanding interpersonal skills. Build a diverse team, which reflects the needs of customers and who bring different experiences to problem-solving. Finally, once you’ve secured great people, make sure they are inducted properly and that you continuously train and develop them.

Great people also need great tools. Access to high-quality data-analytics and an up-to-date CRM system can massively improve transparency and the effectiveness of collections and recoveries teams. Audit existing processes and workflow to ensure that they are right for the world we are in today and automate simple and repetitive processes where possible. Also, ensure that the team has access to a variety of communication tools to reach delinquent borrowers.

Never lose sight of the fact that a first-class collections and recovery function is a team game. Ensure that leadership is inclusive and gets the best from the team. Ensure that the team knows what good performance is and the steps required to achieve this. Collections and recoveries work can be draining. Work with the team to establish a culture which celebrates small wins and ensure that team members feel emotionally supported. Burnout is a real risk and managers need to be aware of the challenges individuals face in these roles. Small breaks and having an open culture can increase resilience. Meet regularly to ensure that cases are discussed in a transparent manner and to share best practice. This can help the team problem-solve far quicker than working in silos.

Building a first-class collections and recovery team in the financial services market requires careful planning and execution. By recruiting the right talent, providing them with the necessary tools and technology, and fostering a supportive team culture, you can significantly enhance your firm's ability to manage delinquent accounts effectively. In a competitive industry like financial services, a strong collections and recovery team can be a key asset that sets you apart from the competition.