Katabat Attracts Significant Growth Investment from Tritium Partners and Terminus Capital Partners

News provided by

Tritium Partners; Terminus Capital Partners

Aug 05, 2020, 13:00 ET

WILMINGTON, Del., Aug. 5, 2020 /PRNewswire/ — Katabat, a leading global provider of debt management software solutions for lenders, fintechs, and collection agencies, announced today a strategic growth investment from Tritium Partners, a growth-focused private equity firm with extensive experience investing in fintech and financial services companies, and Terminus Capital, an enterprise software private equity firm. The investment provides Katabat with significant resources to expand and enhance its industry-leading suite of debt collection products. The transaction also represents an exit for Katabat’s venture backers, including Camden Partners, Osage Venture Partners and Activate Venture Partners. Terms of the transaction were not disclosed.

Katabat is a recognized global leader in cloud-based debt collection managed service software products. Founded by consumer lending experts, the Katabat platform has been built from the ground up to provide unparalleled ease and flexibility. The software synchronizes customer offers, implements customer workflows, and builds integrated content and treatments across all customer channels. Powered by machine learning, Katabat’s products are easily deployed to enable speed to ROI for its clients, and its products ensure full compliance with policy and regulatory guidance.

“We were made for this moment. Having begun operations during the 2008 financial crisis, we are battle-tested and ready to support our clients, both today, as they grapple with the economic effects of Covid-19, and in the future,” said Ray Peloso, President and CEO of Katabat. “We recognize the criticality of product functionality, flexibility, speed and auditability as our clients require unprecedented speed to react to today’s rapidly shifting credit environment.” Mr. Peloso added, “We are thrilled to have Tritium and Terminus as our partners as we enter the company’s next phase of growth.”

Chris Steiner, Principal at Tritium Partners, commented, “Katabat has created a world-class platform that delivers a clear and compelling return on investment to its clients, making it the debt collections software solution of choice for credit and collection professionals. We see significant potential for Katabat as a leader in a market that is increasingly seeking out intelligent, compliance-minded, and data-driven work-flow management capabilities that enable a true omni-channel experience for consumer customers throughout the entire credit lifecycle. No other platform can duplicate the unique capability that Katabat offers to its clients.”

Alex Western, Managing Director at Terminus, added, “We are focused on ensuring a quality customer experience and creating a transparent, positive presence in the sector. We are investing to expand Katabat’s go-to-market team and further enhance its product differentiation to meet the demand from clients who seek technology to improve operational success and better serve consumers.” Mr. Western also commented, “We are thrilled to be partnering with Ray Peloso, CEO, and Ye Zhang, Co-Founder and Head of Product Strategy, and we are confident that the company is well-positioned to dominate the market for debt collection software.”

About Katabat

With more than a decade of experience delivering debt collection solutions to global banks and debt collection agencies, Katabat combines collections and machine learning expertise to help clients engage with customers and increase collections. Katabat partners with lenders and collectors across multiple industries to stay at the cutting edge of debt management, machine learning, automation, regulatory compliance, and data security. To learn more about our full range of debt management products, contact Katabat at info@katabat.com.

About Tritium Partners

Founded in 2013, Tritium is a private equity firm focused on companies with exceptional growth potential. For over 17 years, both at Tritium and prior vehicles, Tritium’s founders have deployed over $850 million of equity capital while partnering with talented founders and executives to build market-leading companies. Tritium’s approach emphasizes creating long-term value through strategic growth initiatives and acquisitions, with a focus on internet and information services, financial and business services, and supply chain and logistics.

About Terminus Capital

Terminus Capital Partners is a private equity firm focused on business software companies, founded in 2017 and based in Atlanta, GA. Differentiated by its industry expertise, sourcing engine, operations playbook, and buy-and-build methodology, Terminus strives to be the premier partner for capital providers, bankers, and management teams in the enterprise software sector.


For Tritium
Caroline Luz
Lambert & Co.


Lisa Baker
Lambert & Co.

For Terminus
Alex Western

KATABAT APPOINTS GUY ABRAMOVITZ AS NEW CFO: Veteran Finance and Consulting Leader to Support Strategic Growth

Wilmington, DE — January 23, 2020 — Katabat, a leading global supplier of debt management software solutions, recently hired Guy Abramovitz as chief financial officer. A finance industry veteran, Abramovitz brings over two decades of experience to the Katabat team in both software product and services businesses.

“Katabat is in a time of tremendous growth, and Guy’s experience in strategic deal-making and growth capital is a major asset,” said Ray Peloso, CEO, Katabat. “His deep financial knowledge and business acumen will help propel Katabat towards its next stage of development.”

Prior to joining Katabat, he served as the CFO of e-commerce platform company Workarea (formerly WebLinc) where he secured additional capital, refinanced the company’s debt, and ultimately managed the sale of the company’s services business.

At Veterinary Practice Partners (VPP), Abramovitz directed the finance team as the company grew by a factor of five through an aggressive acquisition strategy. He also led the recapitalization of the company through its sale to a private equity investor. Prior to VPP, Abramovitz worked for several national accounting and consulting firms, specializing in transaction services.

“I’m excited to join Katabat as it continues to transform customer experiences within the debt collection industry,” said Abramovitz. “The company has put in place the right pieces to take advantage of the market opportunity before it, and I look forward to continuing to drive the financial strategy that combines developing our innovative technology with globally scaling the business.”

Abramovitz holds a BBA in accounting from Temple University’s Fox School of Business Honors Program, and an MBA in finance from the Wharton School of the University of Pennsylvania.

CMC Announces Name Change to Katabat™

CXM Solutions Fuel Continued Company Growth and Expansion

November 28, 2017

CMC — a leader in customer experience management (CXM) solutions for the consumer credit lending industry — announced today that it has changed its name to Katabat. The name change and rebrand reflect the company’s continued evolution and its strategic path forward. Its broader commitment to innovation and solutions beyond debt management is shaping the future of consumer lending relationships.

“As CMC, we experienced tremendous growth and success. This supported a natural, broader evolution of our products over time. We reached a point where our name felt restrictive and perhaps a bit confusing. Our values and priorities to serve our clients well remain unwavering, but it was time to update our brand,” said Ray Peloso, CEO of Katabat. “Now, through our name change to Katabat, we more clearly convey how our products and solutions meet a more comprehensive set of market needs across global consumer credit lending.”

A katabatic wind is channeled and commanding, conveying power and energy. Katabat’s solutions help bring order to its clients’ fragmented and swirling data and technology infrastructure, helping them move forward confidently with their business agenda.

Launched as a collaboration between technologists and lending industry experts, Katabat was founded in 2006 to bring a unified customer experience management solution to market. The great financial recession spurred particularly high demand for its collections-focused solutions. However, Katabat has throughout its history delivered a diverse set of products built upon its proprietary strategy, workflow, and customer self-service engines.   And with powerful built-in compliance controls, Katabat’s platform is a preferred solution for cutting edge CXM execution.

For more information about Katabat, please visit us at www.katabat.com or @gokatabat or info@katabat.com.

About Katabat
Katabat serves organizations around the globe with its leading customer experience management solutions. In addition to its U.S. headquarters, Katabat has offices in the United Kingdom and Australia. Learn more at www.katabat.com.

Christina Cadmus, 302-830-9262
Marketing Manager

Two Portfolio Companies Named to Deloitte 2016 North America Technology Fast 500™ Rankings

FSAStore.com #156 and CMC #484  **Click here to view complete list**


SAN FRANCISCO, Nov. 16, 2016—Deloitte today released the 2016 Technology Fast 500, an annual ranking of the fastest growing North American companies in the technology, media, telecommunications, life sciences, and energy tech sectors. Loot Crate claimed the top spot with a growth rate of 66,661 percent from 2012 to 2015.

Based in Los Angeles, Loot Crate delivers monthly curated mystery boxes of entertainment and pop culture themed collectibles to fans. Founded in 2012, Loot Crate has more than 650,000 subscribers worldwide in 35 countries. Loot Crate’s position at the top of this year’s list showcases how innovation isn’t always about new technology and invention, but also about ingenuity, the recombining of existing assets, and know-how in new ways to maximize value.

Awardees are selected for this honor based on percentage fiscal year revenue growth from 2012 to 2015. Overall, 2016 Technology Fast 500 companies achieved revenue growth ranging from 121 percent to 66,661 percent in the 2012 to 2015 time frame, with a median growth of 290 percent.

“Our personal and professional lives are shifting in response to new technologies and business models that are changing the way we work and live,” said Sandra Shirai, principal, Deloitte Consulting LLP and US Technology, Media, and Telecommunications leader. “The 2016 Technology Fast 500 winners are supporting this shift by creating experiences for their customers, surpassing expected possibilities, and helping to envision even more effective and ingenious solutions. Loot Crate is just one example of how effective organizations face disruption with confidence, striving to understand and harness the potential to propel forward. That means taking risks, encouraging experimentation, and embracing transformation.”

“Being recognized by Deloitte as the fastest growing technology company on the Fast 500 List is an incredible honor,” said Chris Davis, CEO and co-founder of Loot Crate. “Our desire to curate unique experiences for our customers through our shared passion for pop culture, games, and entertainment brands gives our fan commerce business a sense of purpose as we scale and makes coming to work a lot of fun.”

The top 10 ranked companies are as follows:

2016 Rank Company Sector Revenue growth (2012 to 2015) City, State
1 Loot Crate Digital content/
66,661 percent Los Angeles, California
2 Yieldbot Digital content/
39,783 percent New York, New York
3 ARIAD Pharmaceuticals, Inc. Biotechnology/pharmaceutical 21,191 percent Cambridge, Massachusetts
4 SearchMarketers.com. Digital content/
16,547 percent Irvine, California
5 BounceX Software 14,575 percent New York, New York
6 Doximity Software 14,350 percent San Jose, California
7 Gainsight Software 12,730 percent Redwood City, California
8 Lexicon Pharmaceuticals Inc. Biotechnology/pharmaceutical 11,839 percent The Woodlands, Texas
9 Datadog Software 10,303 percent New York, New York
10 AppLovin Software 10,276 percent Palo Alto, California
Regional innovation remains strong

Deloitte’s Technology Fast 500 winners hail from cities far and wide across North America—from Los Angeles to New York to Canada. Of the dozens of locations represented on the list, some have a particularly strong track record of turning out successful, fast growing companies that are releasing new, emerging technologies.

Silicon Valley, well-known as an innovation hot spot, continues to lead in representation with 20 percent of the companies on the list, 63 percent of which are in the software industry. The New York Metro area and the Greater Los Angeles area came in next, with 17 and 8 percent respectively of companies on the list in software and digital content, and the media and entertainment sectors. Rounding out the top five markets, the District of Columbia dominated in software and New England in software and biotech.

Following is a list of innovative cities with a significant concentration of winners:

Location Percenage of list Fastest-growing company in the region Overall company ranking Dominate sectors in location
San Francisco Bay Area 20 percent Doximity 7 Software 63 percent
New York Metro Area 17 percent Yieldbot 2 Software 47 percent; digital content/media/entertainment 25 percent
Greater Los Angeles Area 8 percent Loot Crate 1 Software 49 percent; digital/ content/media entertainment 27 percent
Washington, DC  6 percent Supernus Pharmaceuticals, Inc. 12 Software 63 percent
New England 5 percent ARIAD Pharmaceuticals, Inc. 3 Software 44 percent; biotech 33 percent
Software companies maintain 21-year stronghold

Software continues to have the greatest impact across technology sectors, representing 58 percent of the entire list and five of the top 10 winners overall. Of the private companies, 44 percent identified themselves in software as a service (SaaS), 24 percent in enterprise software, and 10 percent in security. Since the creation of the ranking, each year software companies have made up the majority of winners, with a median growth rate of 275 percent this year.

Furthermore, biotechnology/pharmaceutical companies make up the second-most prevalent sector in this year’s rankings, comprising 13 percent of the Technology Fast 500. Digital content, media, and entertainment companies follow next with 12 percent of companies representing this year’s list and a median growth rate of 544 percent.

The percentage of companies from industry sectors represented on the Technology Fast 500 are as follows:

Sector Percentage Sector leader Median revenue growth (2012 to 2015)
Software 58 percent BounceX 275 percent
Biotechnology/pharmaceutical 13 percent ARIAD Pharmaceuticals, Inc. 428 percent
Digital content/media/entertainment 12 percent Loot Crate 544 percent
Medical devices 5 percent Strata Skin Sciences, Inc. 255 percent
Communications/networking 5 percent MacStadium, Inc. 199 percent
Electronic devices/hardware 4 percent FORM Holdings Corp. 290 percent
Semiconductor 2 percent Movidius 209 percent
Energy tech 1 percent Norbachi 215 percent
Majority of companies received venture backing

In the 2016 rankings, 68 percent of the companies were backed by venture capitalists at some point in their company history. Notably, eight of the top 10 companies on the Technology Fast 500 received venture funding.

“Investors continue to remain confident in North American technology companies. Companies that enhance efficiencies through new technologies, enter new markets, and develop new products and business models are the ones who sustain fundraising and will provide a significant return on investment. These are the rising stars,” said Jim Atwell, partner, Deloitte & Touche LLP, and national managing partner of the Emerging Growth Company practice. “The industry understands that while innovation entails taking risks, the absence of innovation is riskier. This is something the Technology Fast 500 winners recognize as they continue to grow and move their companies forward.”

For additional details on the Technology Fast 500, including the complete list and qualifying criteria, visit www.fast500.com. Connect with us on Twitter: @DeloitteTMT; #Fast500.

About Deloitte’s Technology, Media and Telecommunications practice
Deloitte’s Technology, Media, & Telecommunications (TMT) practice provides industry-leading audit, consulting, tax, and advisory services to more than 1,800 clients in the United States, including the vast majority of market category leaders across all sector segments. Deloitte practitioners, many with direct industry experience, work with one purpose: to deliver measurable, lasting results. They help reinforce public trust in our capital markets, inspire clients to make their most challenging business decisions with confidence, and help lead the way toward a stronger economy and a healthy society. TMT clients count on Deloitte to help them transform uncertainty into a possibility and rapid change into lasting progress. Deloitte practitioners know how to anticipate, collaborate, and innovate, and create opportunity from even the unforeseen obstacle.

About Deloitte
Deloitte provides industry-leading audit, consulting, tax, and advisory services to many of the world’s most admired brands, including 80 percent of the Fortune 500. Our people work across more than 20 industry sectors to deliver measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to make their most challenging business decisions with confidence, and help lead the way toward a stronger economy and a healthy society.

Compliance, Control, Transparency: The Key to Success in Today’s Market

Uncertainty Breeds Paralysis
As the recovery continues and delinquency levels normalize, those in our industry would
typically see creditors beginning to turn their attention to process improvement initiatives,
cost reduction strategies and efforts aimed at applying lessons learned from the last three
tumultuous years — but this recovery has been noticeably different.

Instead of the normal activity, this recovery has been overshadowed by the appointment of a new regulatory body and an expected host of new regulations designed to protect consumers. Rather than spending their resources focusing on embracing the latest communication channels and preferences of their customer base, creditors are instead in a “hurry up and wait” mode to deploy process changes aimed at complying with these new regulations — regulations that are, in some cases, hastily defined, and in other cases, still only rumored to be on the way.

Most of us in the industry have known for some time now (and been increasingly frustrated) that the existing regulations have gaping holes in terms of their applicability to the current environment we all face every day. The Telecommunications Consumer Protection Act (TCPA) and the Fair Debt Collections Practices Act (FDCPA) are well-intentioned legislative attempts to regulate the industry’s practices, but have grown so out of date as to be almost irrelevant. For example, most modern communication technologies aren’t covered, as text messaging, email, mobile phones and auto-dialed or IVR calls weren’t even part of the consumer landscape back then. Still, these regulations are continuously being interpreted by the courts and the new regulatory body. The creditors that have to comply with them face the always-evolving question: “Comply with what?”

Without clarity on how to interpret the laws that are on the books, what our industry is left with is a disarming lack of direction about how to apply the principles of these regulations in the context of the new technologies. A simple matter like calling someone at the number they provided to us in their application becomes a complex issue when that number can be ported to a cell phone for which express consent hasn’t been captured, etc.

Who’s On First?

Contact methods and the number of attempts are far from the only area of regulation to be contended with — fair lending practices, disclosure requirements, verifications of employment and consent are all in play. The overlap between federal rules and aggressive state attorneys general is also unclear: When regulations mandate conflicting actions, which one trumps? When channel communications allowed under one regulation are to be displaced by another, do the old rules apply to the new technology — and if not, who is going to clarify the interpretation of the new technology (something the FCC and FTC have routinely failed to do in the past 30-plus years)? When data on SCRA-eligible borrowers is hard to find, when cell-phone data is unreliable and expensive, when the existence of multiple account relationships for an individual customer changes the nature of the challenge, who is going to interpret how much effort (to comply) is enough?

New Kid on the Block

In 2010, Congress enacted the Dodd-Frank bill to address a host of issues across the broader financial services spectrum that led to, or were believed to have exacerbated, the financial crisis of 2008. Also included in that bill was the creation of a new agency, charged with protecting the interest of the consumer — the Consumer Financial Protection Bureau (CFPB).

Power Corrupts; Do Consumers Have Absolute Power?

In its creation under Dodd-Frank, the CFPB was granted a regulatory remit the likes of which have not been seen before:
> The CFPB has taken over authority for all consumer oriented Office of the Comptroller of the Currency (OCC) rules. The OCC retains ‘safety and soundness’ oversight of financial institutions.
> Likewise, CFPB is responsible for all consumer oriented Federal Trade Commission (FTC) rules, as well as the supervision and enforcement authority over all consumer-oriented regulations in the financial services arena that were the province of the Federal Communications Commission (FCC), including the Telecommunications Consumer Protection Act (TCPA) of 1991 and the Fair Debt Collections Practices Act (FDCPA) of 1977.
> In addition to interpreting the current laws and regulations, the CFPB is charged with authoring new rules and regulations that affect consumers across the broadest range of financial industry players possible: banks, mortgage and student lenders, payday lenders and debt collections agencies.
> The most surprising remit of the CFPB, however, is that it is also charged with both the supervision and enforcement actions arising from interpreting the laws and regulations. Adding to the agency’s challenges, it is the CFPB who is also responsible for hearing appeals.
> Here we have a federal regulatory body that is the creator, the interpreter, the supervisor and the final appellate arbiter of the appropriateness of any interaction with the consumer. When combined with the fact that the CFPB has authority to pierce the shield of attorney-client privileged information and is itself exempt from adherence to the tenets of the Freedom of Information Act, it becomes a potentially frightening situation.

No wonder the financial industry is concerned. While the proclamations coming from the CFPB Director so far appear to indicate that the agency is aware of the awe-inspiring power and reach it holds (and is prepared to wield that power judiciously), one can only watch the bureau’s actions to see how this situation will play out. For many financial executives, this uncertainty has caused them to adopt a “wait and see” position.

Alternatively, this can be viewed as a potential source of clarity for the industry. The agency will be a single point of focus that’s charged with solving the cross-agency confusion and resolving many long-standing questions. It is our belief that the winning strategy is a proactive re-evaluation and re-tooling of underlying systems in order to ensure compliance regardless of how the situation develops from here.
Let’s take a look at some of the areas that will be impacted by new regulation in the coming months:

It’s a New Day in Vendor Management

In April the CFPB released an official bulletin regarding service providers. The implications of this bulletin will have significant impact on the industry, as creditors place additional requirements on their agencies to produce documentation and audit responses aligned with the ever-changing regulations coming out of the CFPB.

The cost to comply with ill-defined regulations and then respond to regular examinations will likely force consolidation throughout the Accounts Receivable Management (ARM) industry. These are straight expense line items, without the potential of any off-setting revenue gains — a deadly combination for any employer that operates under tight margins to begin with.

Because the regulations are not well defined, it means that financial institutions will be forced to develop their own interpretations. The implication for agencies is a multitude of “standards” that actually vary slightly from contract to contract. This variation will drive significant overhead costs as reporting and compliance must be customized for each client.

So what does this mean for your business? We all understand that the financial health of our service providers is critical to their ability to provide effective collection results. If they have to expend energy and overhead on generating reports and responding to an ever increasing line of auditors at their door, then their ability to maintain collections performance will be tested.

Audits are required — agencies must be secure and treat their confidential information with safety and integrity. The cost of security is one that every business in the industry understands and appreciates; however, it is the costs expended to placate a multitude of interpretations in a variety of manners that will ultimately drive the costs up exponentially.

While We Wait

Most large scale agencies have been working under stringent security requirements for quite some time. Clients have long held service providers to a very strict code of conduct when it comes to compliance and security. What is different now is the level of responsibility the CFPB is placing on the financial institutions for the service providers’ conduct.

A thorough evaluation of each service provider, while expensive for both parties, is essential to ensure your exposure is limited and the proper precautions are being taken. The ability to maintain control of data, and to monitor compliance in real time, will be a critical step forward. The long-standing industry standard practice of distributing inventory to a variety of service providers may be nearing its end. Technology has progressed to the point that there is no compelling limitation that would keep a business from providing access to the data within their existing, approved, secure data centers rather than shipping the data out to a variety of locations on a daily basis and receiving/reconciling individual variations between what was sent and what was returned.

The benefit of a controlled collections and recovery environment go beyond compliance monitoring and enforcement. This is one area that may ultimately yield benefits from both cost and performance standpoints. Inventory management is an expensive endeavor. By eliminating the expense line items associated, creditors can re-direct resources to more performance-impacting practices. In addition, the ability to set strategy and quickly make strategic changes intra-day will yield significant increases to liquidation rates. Depending on your solution set, you may even be able to provide access to communication channels like texting, web self-service and email that you have previously been unable to allow from a purely outsourced standpoint.

Get Back to Business, Confident You Comply

It isn’t just the changes in the service provider expectations impacting the industry. Understanding the challenges posed by the evolving regulatory environment is one thing— being able to comply with what one knows is being asked is yet another entirely. Yet, the only way for executive management to be certain of success in significantly reducing reputational risk is:
> to re-take control over not just the strategy but the operational execution of the collections strategy;
> to maintain transparency in reporting and communication to all parties;
> to do so in a way that is provable not only to regulators but to internal management, in order to facilitate positive changes when needed;
> to ensure you have the flexibility needed to adjust on-the-fly to the rapid-fire changes in regulations, interpretations, and customer behavior data.

Get Control Over Offers, Channel Attempts and Touchpoints

In order to achieve compliance, you must be able to make sure that the internal and external contact strategies are all executed in accordance with the strategist’s design. This process includes covering the number of total attempts by device or channel (home, work or cell); by address; within specific periods of time and to specifically-allowed responsible parties; programs offered and the disclosures associated with each interaction. This is only possible if the execution component of the operation can be controlled by the strategist’s design. In order to provide that level of control, all of the data and strategies are best managed within a single source that is not subject to operational decisions made outside the strategist’s view.

What is at stake is the ability to maintain a flexible but compliant environment, which requires a fundamental re-balancing of power. If the system allows operational changes that can violate the strategy (and if they can, they will), you risk non-compliant behavior. The trade-off, of course, is that limiting freedom to adjust strategies on-the-fly can impact performance. As a result, freedom must be maintained in a single controlled environment in order to ensure that both compliance and performance goals are exceeded.

Maintain Transparency

The ability to control the operational execution in accordance with the strategists’ design is rendered truly powerful by the ability to see both the strategy and its execution in real-time, with both being able to change on-the-fly in response to data as it is received. Yet equally important is the need to be able to re-create exactly what is happening, has happened, and will happen so that there is no mystery in giving over control to the strategists. This ability is fundamental to the next item, but also necessary in order to provide control in a way that is acceptable to both operational managers and strategists.

Provability for Audit Purposes

The upside to giving operations and strategists visibility of the strategy-to-operations connection is that we can then allow compliance officers, auditors and regulators that same visibility. It is crucial that reports are easily available to prove what has been done, what is being done and what will be done. This is the flip side of the transparency issue: in order to be able to see clearly what is happening, and why it happens that way so that it can be modified as needed in day-to-day operations, the same is true after the-fact for provability. Only a system that provides the control necessary to transparently manage all aspects of a compliant operation will be able to provide the same level of reporting across all those aspects.

Flexibility — The Least Appreciated, but Most Important Attribute

Given the challenges posed in providing control, transparency, and provability across all components that need to be managed (channels, appropriate responsible party conversations, work/home/mobile addresses, offers, disclosures, etc.), one would be forgiven for thinking that a solution that offers these would be sufficient. The problem is, this isn’t a static problem and is subject to daily change given our currently-evolving regulatory environment.

The upshot of the above is that a system devised to ensure compliance must, first and foremost, be designed with flexibility and adaptability built-in. Anything less will provide a short-term win, at best, but more likely will be obsolete before it even goes into production. This is precisely what happened at a large retail banking organization that specified its online collections component prior to a regulatory change. The result was a nearly two-year development effort that had to be shelved because the end product had not anticipated or architected for the constant evolutionary changes that would be needed.

Subject-Matter Expertise is Not Optional

Which leads to the final element of flexibility: subject- matter expertise in collections and credit risk. Without it, an IT-driven solution will founder on the rocks of regulatory complexity and potential overlap, and the deployment will far short of the degrees of freedom necessary to anticipate future changes in requirements. While putting a business-savvy resource on your development team is better than nothing, it is actually more important to make sure that the solution architect him/herself has the business understanding required to ensure the solution will scale, not only to the potential complexities and contradictory requirements, but also to the level of change that has to be accommodated by the solution.

Scenarios to Ponder: Different “Levels of the game”
Customer versus Account versus Responsible Party

All of the above-mentioned challenges exist for each individual account managed at the product or portfolio level. Who you can speak with, how many times you can attempt to contact them, where you can contact them within a given time frame, and what you are required to disclose — all of these factors can vary by geography in ways that make things difficult from a systems point of view. The state of Massachusetts, for example, mandates that place of employment must be verified on a regular schedule before proceeding with contact attempts. Other states require that only the principal accountholder be counted as a right party, and even their spouses are deemed third parties — all things your system needs to “know” and convey to agents.

Also, it is worth noting that regulators are less interested in how systems were built to work and more interested in the customer experience impact. Regulators ask “why is it so hard to treat a customer consistently and sensitively across all elements (e.g. products) of their relationship with a lender?” That expectation is not unfair, but it may be when asked about current systems that weren’t architected with that goal in mind.

Defining Contacts, Attempts and Resolutions

Another complexity is that an “attempt” has been traditionally defined as a phone call, and “contact” has been defined as a Right Party Contact (RPC). “Resolution” means the past-due amount has been paid to current, or that a payment program has been created that will bring them current when it is executed. Unfortunately, those traditional definitions are subject to change: The Irish government, for example, has mandated that collectors could make no more than three attempts — letters, telephone dials, emails and text messages all count — within a 30-day window. While it’s unlikely that our regulators will compare notes with theirs, the day is not far off when any medium of contact will count as an attempt, and the definition of contact may expand as well. For instance, is an authenticated Web visit any different from an inbound call? Our industry will need to be prepared for that possibility, as well as the notion that any future scheduled payments must be considered a resolution unless it can be clearly demonstrated that the payments do not meet the proper criteria and that the borrower has been so notified.

“Contact Compliance” or “Disclosure Compliance” or “Operational Policy Compliance”

Different requirements between states and the federal regulations used to be manageable by adhering to the OCC’s guidance as pre-empting any conflicts, but that doesn’t appear to be the case anymore. States are now able to — and seem increasingly comfortable with —going their own way in setting their own rules for contacts, disclosures and policies. The state of Washington, for example, mandates that customer contacts be limited to three times within a specified period but only one of those contacts can be to the place of employment (POE). Massachusetts, as mentioned above, mandates POE verification more regularly than the Federal government or other states require. Navigating these various requirements — even just keeping track of which states require what specific contact, disclosure and operational actions and reports — represents a nearly full-time responsibility. As mentioned in the previous section, just meeting the requirements isn’t sufficient: one has to be able to prove that operations are compliant to the regulators’ satisfaction. Muddling forward “as best one can” in the hope that they don’t ask to see proof simply isn’t an acceptable strategy.

The Conclusion: Compliance Automation is Your Best Option

Ensuring agents only talk to the right people, at the right time, with the right offer and disclosures within each geography can only effectively be controlled when the strategists’ rules for contacts, offers and disclosures are consistently and uniformly followed. Operational managers, who need freedom in order to operate efficiently, can be effective while remaining compliant only if the rules and requirements are incorporated into the operational execution capability they use to manage their staff’s efforts, from dialer-based campaigns to manual or preview-dial calling efforts. Inbound contacts must be incorporated into the strategy set for decisioning the next contact across all touch points, or the effort to control all outbound calls will have been for naught.

Similarly, the addition of digital channels such as IVR, email, text and Web can only be executed in a compliant manner if the strategists’ central control point is maintained. That isn’t possible through printed “cheat-sheets” for agents – rather, a fully-automated solution that incorporates rules-based contact attempts across all channels, including fully informing agents of the current status of a customer and even preventing call (or other channel) attempts to borrowers who have reached the “maximum-allowed-threshold” status is necessary. On top of that, one must add the individualized offer and disclosure requirements and ensure that all content (whether conveyed in digital messages, letters or agent phone calls) is compliant before executive management can be confident that reputational risk has been mitigated.

That is the goal, and it is unlikely to be achieved without the help of fully automated solution that provides the control, the transparency, the provability and the flexibility mandated by today’s complex regulatory environment. Only then can collections executives stay on top of the wave instead of being crushed by it.

CMC FlexCollect® Surpasses $300MM in Payments Collected

The FlexCollect® Cloud-based Managed Service Reaches Another Payment Milestone, Avoiding Charge-offs for Tens of Billions in Delinquent Balances

Wilmington, DE., April 30, 2012—Collections Marketing Center, Inc. (CMC), the leading provider of comprehensive collections “in the cloud” for creditors and billers, today announced it had surpassed a milestone payment mark for its FlexCollect platform.  More than $300 million in payments have been made by delinquent customers to account balances held by CMC clients.

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CMC Releases Industry Advisory Group Meeting Results

Spring 2012 Gathering of Industry Thought Leaders Convenes in Philadelphia, PA

April 11, 2012 PHILADELPHIA, PA – Collections Marketing Center, Inc. (CMC) is releasing key findings from its recent Industry Advisory Group (IAG) meeting, where thought leaders representing nearly 30 of the industry’s top lenders and service providers gathered to share insights and perspectives on the major challenges facing the industry in the coming year.  Some of the key topic areas covered:

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CMC FlexCollect® Smart PDF Solution Increases Payments While Dramatically Reducing Paper and Postage Costs

Clients Can Expect Individual Letter Cost Reduction of 75% or More

Wilmington, DE., February 24, 2012—Collections Marketing Center, Inc. (CMC), the leading provider of comprehensive self-service collections strategies, today announced that its Smart PDF solution is in pilot with a number of its clients.  read more