As the new year begins, it is a perfect opportunity for collection and recovery managers to evaluate and refine their vendor oversight strategies. In an era of evolving regulations, heightened consumer expectations, and advanced technologies, effective oversight extends beyond mere compliance and security. It is certainly about compliance and security, please do not misunderstand my thoughts, but adding elements of operational excellence will ensure you are driving the right results.
Too often we have seen collectors do exactly what the contest sets up, whether it is urgent payments or settlements, or a combination of calls and right-party connects. For 2025, just be sure you are asking for and tracking the right things!
Hereās how to craft a comprehensive oversight strategy for 2025 that addresses not only compliance and security but also operational performance and overall collection success.
Revisit the Fundamentals: Align Oversight Goals with Business Objectives
There are many ways to conduct vendor oversight, and there is no perfect solution. You need to review your goals, expertise and staffing to develop a solid plan. Ā I like to start the year and plan for the oversight by thinking about what went well, and what did not work as intended, or might need a bit of revision. Ā Start by clarifying the purpose of your vendor oversight program. Beyond regulatory alignment, your oversight should drive business value by enhancing vendor efficiency and boosting recovery rates. Reflect on these questions:Ā
- Are your vendors meeting or exceeding your recovery benchmarks?Ā
- How effectively are they handling operational challenges like staffing, training, and dispute resolution?Ā
- Did you have any unwelcome trends seen in complaints?Ā
- Were there any surprises that did not come up in your regular reviews and oversight?Ā
I like to take a fresh look every year. Ā Certainly, keeping the best-in-class options, but mixing it up a bit as well. Ā By anchoring your strategy to both compliance and performance, you create a balanced approach that delivers results. Ā Ā
Expand the Hybrid Oversight Model and Include Performance AuditsĀ
So, I may have mentioned in previous blogs that Iām a fan of the hybrid oversight model. Ā I think itās important to be onsite, but itās also important to have multiple touch points, and not wait for an annual onsite. Ā The hybrid oversight modelāblending remote monitoring with onsite auditsāoffers the flexibility and depth needed for modern vendor oversight. Many vendor manager already have a combination of hybrid, security, compliance, and operational reviews. For 2025, look at ways to expand and improve your approach. Ā For example:Ā
- Remote Monitoring: Go beyond compliance metrics. Look at ways to track operational KPIs like average days to collection, payment in full, settlements, and maybe first-call resolution percentages.Ā
- Onsite Audits: In addition to observing physical security, look at ways the vendor manages their compliance requirements. Ā View training classes and materials. Ā Check hiring and termination documents. Ā In addition, observe frontline activities firsthand, such as call quality, dispute management, and team collaboration. I still think the ability to sit with the collectors is a huge win for the vendor and the auditor. Ā An onsite visit allows you to validate their ability to execute effectively against agreed benchmarks.Ā
Prepare for Change and Integrate Training into the Oversight Framework
I like to operate with a trust but verify mindset. Ā Iām assuming you have already done a thorough due diligence to bring on the right vendors, but things change constantly. Ā You may also want to also look at what new skills or options are available that may be different than when the vendor was onboarded. Ā For example, vendors are looking at, exploring or skilled in some of the various omni-channel solutions. Ā As a client, I want to support their efforts and share experiences and concepts so we can all be more successful. I also want to ensure my oversight and audit includes new processes and procedures, and results.Ā
A skilled and knowledgeable vendor workforce directly impacts recovery results. So, understand that you can strengthen your oversight strategy by collaborating on training programs that combine regulatory requirements with operational excellence:Ā
- Educate vendors on your customer, and your internal processes, including collection strategies that have been successful for your types of accounts.Ā
- Share ideas and concerns on new regulations and upcoming legislation.Ā
- Focus on consumer-centric communication that balances assertiveness with empathy, driving higher resolution rates.Ā
- Conduct joint workshops to align your teams on shared performance goals.Ā
Strengthen Contingency Plans to Address Operational RisksĀ
Effective oversight also means preparing for potential disruptions. Itās important to understand the risk of various types of vendors. Ā From compliance lapses to operational slowdowns, a contingency plan ensures business continuity:Ā
- Maintain regular communication and oversight with your vendors.Ā
- Develop a solid process for evaluating change at the vendor.Ā
- Develop a clear escalation protocol for operational issues.Ā
- Maintain a vetted list of alternative vendors.Ā
Drive Continuous Improvement with Transparent Feedback LoopsĀ
Iāve always been a fan of continuous improvement. Ā Even if you had a superior oversight program for 2024, you can still take a look at ways to improve the processes. Ā The best vendor relationships are partnerships. I find that call monitoring and call calibration sessions with collectors and managers can significantly enhance the communications and success of the relationship. Ā Establish regular review cycles to discuss not only compliance findings but also operational insights and collection performance:Ā
- Conduct call calibration sessions with vendorsĀ
- Schedule regular business reviews to assess progress toward mutual goals.Ā
- Create a forum for vendors to share feedback, challenges, and suggestions for improvement.Ā
- Use data-driven insights to guide adjustments in strategy, ensuring relevance and impact.Ā
Moving Forward: Elevating Oversight for 2025 and BeyondĀ
As you finalize your vendor oversight strategy for 2025, remember that true success lies in balance. Compliance and security form the foundation, but integrating operational effectiveness and collaboration will set your program apart. By revisiting your goals, expanding hybrid oversight practices, and embedding continuous learning into your framework, you ensure a strategy that evolves with industry demands. Strengthening feedback loops and contingency planning further solidifies your approach, turning oversight into a driver of both vendor performance and organizational success. Ā
Together with your vendor partners, your audit oversight program can ensure compliance and security, while achieving results that exceed expectations and build a foundation for sustained growth.Ā
Author:Ā Judy Hammond
Judy Hammond is founder and President of Resource Management Services, Inc. The corporation was founded in 1986 and specializes in auditing and consulting, serving the collection and recoveryĀ industry.Ā As President of Resource Management Services, Inc., she has more than 35 years ofĀ experience with an emphasis on operational reviews for compliance and operational eļ¬ectiveness ofĀ collection operations, both for creditorsā internal collection and recovery operations as well asĀ collection agencies and attorneys.Ā She has worked with top banks and financial institutions, utilities, credit unions and telcoms, (and their vendors) and has conducted many BestĀ Practices projects.Ā She is author of various industry publications: āComprehensive Agency/AttorneyĀ Usage Study,ā āComprehensive Agency/ Attorney Usage Study IIā and āCollect More From CollectionĀ Agenciesā. Her work with creditors who were looking to sell debt for the first time, and subsequentĀ Buyer/Seller research was the foundation for the second corporation, The Debt Marketplace, Inc.Ā Ā SheĀ worked with Dennis Hammond as co-founders of the Debt Buyersā Association, (now RMAi), building theĀ foundations for industry standards, as well as the original code of ethics. She developed andĀ produced two industry conferences, Collection and Recovery Solutions and Debt Connection SymposiumĀ & Expo, from their inception in 2002 and 2006, respectively, to 2022.Ā Prior to starting her ownĀ company, she worked with twoĀ large collection agencies.
Note:Ā Resource Management Services, Inc. provides Third Party Auditing/Oversight services for Creditors.Ā For more information, contact me at judy.hammond@resourcemanagement.com or check us out atĀ ResourceManagement.com
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