Wednesday, 18 May 2016

Working at TDX Group: the science of process improvement

It’s 2016 and surely everything that will be invented has been (apart from teleportation and time travel)? We know how to do everything the best way and with the best methods and tools and everything is just a re-hash of an old method – Spotify for example, just a do it yourself radio station!

So why worry about trying to improve things? Why try to find a faster, cheaper, better way of doing our jobs? Surely it’s just better to get on with the work, answering queries, chasing clients, producing our products and providing client services. Change just messes things up, slows things down and confuses people and no changes ever stick longer than a week, or a month at most, then people just get bored and go back to the way things were … Sound familiar?

It’s natural to fear change, to upset the routine and rhythm of daily life – you probably don’t have time in the working day to implement a change and why should you? It’s not your job to help improve things; your job is to get stuff done and out the door so SLAs are met, targets are hit and services delivered.

It is easy to get stuck into this way of thinking and to focus on the short and immediate term but if this really was the case then why invent MP3 players when the Walkman was perfectly fine; why go to the Moon when the Earth is doing an excellent job at providing an atmosphere; and how are sport stars constantly breaking records?

Process improvement is the answer and it doesn’t matter how big or small a change can be to improve things. Marginal gains are just as important as huge ones and often add up to a bigger overall improvements. The British Cycling team is probably the most prominent example of this and Sir Dave Brailsford’s belief is that changing many things by 1% would add up to a significant increase when you put them together: Marginal gains underpin Team GB's dominance.

But how do we translate this from the world of sport into the world of TDX Group? Firstly we look at every process and ask why we are doing the thing we are doing; does it add value to anyone? Could we do it a better, faster, cheaper way?  Then we need to look at how often we perform the process or task; is it daily, weekly, monthly etc? If there is no value in this then we suggest an amendment to ultimately deliver a faster, better more efficient process for our customers.

Process improvement is already here and has been for centuries – it (along with necessity) is the mother of all invention and is the reason why companies grow and at TDX Group we are continually improving everything we do and embedding a LEAN culture of process review to improve the services we provide.

Paul Sibley, Head of IT Process Improvement

Tony Palminteri, Lean Process Improvement Specialist

Wednesday, 11 May 2016

How do you report on your customers post sale? Whose best interest are you considering?

Reporting to credit reference agencies (CRAs) on your customers’ accounts post sale has been one debated by the industry for a number of years. The process of how this is done is often based on what is deemed the easiest and quickest solution, meaning there is no one standard approach. We believe this inconsistency is unfair. It feels as if this is one of the last hangovers from the days where highest price and speed of transaction (ask no questions) were industry standard practice.

The inconsistent approaches adopted can mean consumers find that what is recorded on their credit report is dependent on who is selling the debt and who is buying it. In a world where customer treatment and fair outcomes are at the heart of everything we do, is it right that the sale of an account may show up differently on one consumer’s credit report compared to another, depending on which companies are involved in the process? The impact of this is that their ability to manage their financial affairs will vary.

There are currently three accepted methods in the industry on how a credit record can be transferred from a seller’s to a buyer’s CRA portfolio. They are:
  1. Delete and re-add – this is where a seller will delete the entire credit history and then the buyer will re-add the account, with no history in their monthly CRA submission
  2. Full Transfer – this is where the complete credit history is transferred by the CRA from the seller’s to the buyer’s portfolio
  3. Flag and re-add – this is where a flag is marked on the sellers record indicating the account has been sold and a new record is opened by the buyer
It is common practice to see all three of these methods being regularly used throughout a single year of transactions. Steering Committee on Reciprocity (SCOR), the industry data sharing oversight body, has issued guidance putting the responsibility on to the sellers and buyers to agree a process. However, at TDX Group, because we act in the centre of the industry, working with buyers and sellers on transactions, we have seen issues with all of the methods and none of them have proven to be fool proof. Some examples of problems include: duplicate records being live for a consumer; no records being available; or the flag not being marked before the new record is uploaded – all of which have a different impact on the consumer.

At this stage we are not calling for one method over another, although we do believe it is time to stop option 1 (delete and re-add). This is the method we often see employed because it is the most straightforward process, and yet the impact on the consumer hasn’t been fully assessed. If you asked creditors how they would treat a customer who had an account on their history which started with a default – what do you think the answer would be?

What we are calling for is the industry go through a considered review and ensure that all parties thoroughly understand the impacts; not only the impact on a customer’s credit record at point of sale, but also for the following years thereafter.

The outcome we are all striving for is one of consistency – that is what we ask of our regulator and we believe it only fair that we strive for the same outcome in our processes. In 2016, with the majority of our industry having achieved or nearly achieved FCA authorisation, it seems totally at odds that consumers could be disadvantaged depending on which Debt sale process they find themselves in.

Nick Ollard, Head of Debt Sale, TDX Group

Wednesday, 30 March 2016

Global outlook: Debt trends in the international arena

In the 12 years since the TDX Group business was formed, we have grown from being a start-up around a kitchen table to part of the global Equifax group with offices around the world. Today, TDX Group operates in Europe, Central and South America, Asia and Australia, and we have ambitions to further develop our expertise and international presence over the coming years. The International team spend a lot of time out on the road (and in the air) exploring new opportunities globally and here are some of the key market trends we’ve observed.

Debt sale and purchase
In debt sale and purchase we expect to see continued expansion into Europe from the large UK debt purchasers, which now includes both Encore and PRA. The continued contraction of the US debt sale market is forcing these large purchasers to explore new markets to acquire portfolios. Initially that was the UK, but with constrained volumes being sold and significant competition, European and emerging markets are looking increasingly attractive. As a result, I expect to see a significant growth in acquisitions amongst these players across Europe; but especially in the Netherlands, Eastern Europe and Italy. Within the Eastern European and Italian markets, it is the big US funds and institutional investors who have purchased first due to the size of the portfolios. We are now starting to see the more traditional Debt Purchasers enter the market and begin to purchase smaller portfolios or segments.

Further afield, the continued economic downturn in Brazil is changing the recoveries dynamic in that country opening up opportunities for experienced buyers to enter the market. In Brazil, especially, market entry strategy will be key to accessing what is normally a difficult market to develop. In Australia there are currently over 20 active purchasers, so we’d expect to see some consolidation in this area and the global purchasers beginning to make acquisitions in this territory.

Recoveries and debt collection
From a recoveries and debt collection agency perspective, the clear differential between the UK/US and the rest of the world is becoming increasingly apparent. The focus on governance and fair consumer treatment, whilst present in most global markets, is not the focal point for activity outside of the UK/US. That said, there are creditors and collection agencies in global markets watching the regulatory driven change closely to understand how the focus on fair consumer treatment can improve overall performance as well as offering better solutions for their customers.

High level themes over the last 12 months:
• Debt Collection Agencies (DCAs) are being retained by creditors’ procurement teams looking for low cost, not maximised net liquidation. As a result creditors are tending to underpay agencies and then get disappointed with results.
• Defaulted/disconnected debts are treated as homogenous blocks. As a result, creditors all too frequently randomly allocate accounts to DCAs.
• DCAs are beginning to embrace digital strategies (largely driven by the first bullet).
• DCAs are increasingly using external data to improve contact rates.
• Creditors are still not utilising all their internal data in recoveries to inform agency strategy.
• DCAs need to better understand their specific specialism and use it to their advantage.

The future in this space will be dominated by the creditors appetite to invest in agency performance (from a commission cost and time perspective) versus simply selling the debts to third parties who are prepared to invest to access the performance reward. The more agency commissions are driven down, the further performance will decline which will ultimately make sale an increasingly attractive (although perhaps not value maximising) option for creditors.

Stuart Bungay is Managing Director of International Expansion at TDX Group.

Wednesday, 2 March 2016

How rewarding DCAs differently could help us achieve the best outcomes for customers

At TDX Group our vision is to “make the debt industry work better for everyone” and when we say “everyone”, we mean it.  In the Third Party Commercial team this means that remuneration, rewards and incentives should be aligned with achieving a resolution for the consumer and the client, but that’s not where it ends. We want commercials that reward our agencies for the excellent work that they do too!

Personally, I don’t believe the current commercial model entirely supports that vision, mainly because the outcome measured by the payment by results mechanism is biased towards cash collected.  This is standard across the collections industry but the tide is changing.  Not only are we seeing an increase in outcomes that are right and fair, and don’t necessarily result in payment – such as identifying vulnerability – but these also lead to increased workload for which agencies are not directly rewarded, which is why change is needed.

Clients and agencies alike are interested in measuring other outcomes and agree that there needs to be commercials in place to support this.  However, alternative commercial models seem complex and risky, so how do we move from a commission-only model to one which ensures that the consumer has a resolution to their debt problem, rewards agencies for achieving fair outcomes, and provides the client with the remuneration for services/goods provided?

I think the answer lies in getting smarter upstream with data, and that’s where TDX Group comes in. We are currently working on new style segmentation using Equifax data which will enable us to identify segments of debt where the right outcome may not be collecting cash.  This is where we will select the right commercials based on the work involved and the outcome desired.  But what about where the objective is still to secure payment in a fair manner?

This is where payment by results still works, but we need to take the emphasis off cash as the only result which is rewarded.  The “result” can be a multitude of positive outcomes which lead to a resolution of the debt.  I think this is where a scorecard approach to commercials works particularly well.  The payment element is aligned to ensure that agencies are incentivised for providing fair outcomes and better consumer treatment.  I also like that we are able to define what a good outcome looks like, and reward this appropriately.

At TDX Group, we’re working on a commercial scorecard which ensures that consumers get a resolution to their debt in a fair way, and even when that doesn’t mean paying the debt, agencies are rewarded for the part they play in the resolution.  All it means is that the process of resolving debt becomes fairer for all and TDX Group can continue our journey to “make the debt industry work better for everyone”.

Charlotte Mather is Head of Third Party Commercial at TDX Group

Monday, 22 February 2016

Investing in ISO: Why it’s an important quality mark for our business

I joined TDX Group a year ago and during that period have been leading the charge to get a serious amount of International Organisation for Standardisation (ISO) certifications under our belt.  We’ve invested a considerable amount of time and effort into our ISO programme in order to achieve a number of new certifications for the business. We’ve made some incredible progress so far and have already managed to achieve three of the most substantial awards.

What is an ISO certification?
ISO is an independent, non-governmental membership organisation.  In its 70 years of existence, ISO has developed thousands of internationally recognised standards in wide ranging business practices.  Recognised in 162 different countries, ISO is the world’s largest developer of voluntary international standards.

But, what are  the benefits of ISO to us, our clients and our partners?
International standards make things work better.  They give world-class specifications for products, services and systems, to ensure quality, safety and efficiency.  More specifically to us here at TDX Group, these standards are really important to both our business and to our clients.  They give our clients, partners and stakeholders confidence that we’re operating in a specific way, to a high standard, that is aligned to a global benchmark.

So, what have we achieved so far and what do these certifications stand for?

ISO9001 Quality Management
This is a systematic approach which defines how you can measure and manage the quality of the work you produce, and over time, realise the benefits of continual improvement. Originally born out of the manufacturing industry, this is globally the most widely used ISO standard. Our entire Recoveries Management business is certified to ISO9001 standard.

ISO22301 Business Continuity
This is a systematic approach which helps you understand and prioritise the threats to our business, and as a consequence, build plans, test effectiveness and overtime, improve the resilience of our business. The TDX Group business is certified to ISO22301 standard.

ISO27001 Information Security Management
This is a systematic approach to managing sensitive company information so that it remains secure. It includes people, processes and IT systems by applying a risk management process. The TDX Group business has been certified to ISO27001:2013 standard since 2011.

There will be more…
As a trusted intermediary at the centre of the debt industry, maintaining high standards forms part of the fabric of who we are.  We’re extremely proud of the certifications we’ve been able to achieve so far, and remain fully focused on attaining more ISO accreditations in the near future.  So watch this space!

Natalie Tate is Head of Operational Transformation Excellence at TDX Group.

Thursday, 25 June 2015

I’m launching my very first product!

I blogged last year about our work on VENDO (our debt sale service) after I joined our product team. I’m now at that critical, exciting and slightly stressful stage – the launch of a new product.


At TDX Group we’ve been working in the debt sale market for over a decade, helping creditors prepare debt for sale and to sell it to a panel of approved purchasers. What had become increasingly clear was there were growing challenges - largely centred on the desire of sellers (the original creditors who provided their customer with a service or product) to gain more oversight of accounts and consumer outcome after sale in order to meet governance and oversight standards.

So, more specifically, what were the concerns? Largely that debt sale results in the original creditor losing control and visibility of what happens to their customers. For example, once you have sold debt, is it easy to see which debt collection agencies accounts are with and which customers are being contacted? How do you know that your customer is being fairly treated? However, the cost and complexity for to a seller or purchaser of gaining increased oversight was looking prohibitive.

In addition to visibility of accounts, post-sale, not being robust enough, there were also challenges with some of the administrative processes. Typically, query management and buybacks (when a creditor calls an account back after sale) have been managed via spreadsheets. It doesn’t take long for that to result in a lot of spreadsheets and data being moved around … and along with it the opportunity for human error or for data to be lost becoming unacceptably high.

So, we’ve created VENDO: Post Sale Manager. It’s a web-based system that addresses these challenges via data and technology. Activity data will be updated weekly and accessible at a click of a button so sellers will be able monitor what’s happening to their customers and see automatic reports on exceptions to agreed activity. Reconciliation of all account ownership will be available and up to date.  It also gets rid of those spreadsheets by giving seller and purchaser a workflow tool.

I think what excites me most about this – apart from it being new and shiny – is that I believe it is a solution which benefits all. Not only the seller and purchaser, but the consumer, too. The oversight benefits for the seller are clear – and from a purchaser standpoint it also brings the benefit of a standardised and efficient way of interacting with multiple creditors as well as improvements in handling queries.

So, how might VENDO: Post Sale Manager impact the consumer? The key benefit is that any query they have about their debt will be dealt with far faster. For example, when contacted, they may ask to see a copy of the bill  in order to be comfortable that they are liable for the debt. We know from the query management solution we’ve had up and running for a while (which we’ve included as part of VENDO: Post Sale Manager) that by simply replacing query spreadsheets with a secure online portal, creditors and purchasers can improve the response times on queries.

It’s been an exciting journey, building this from a concept into a fully working system. I’ll be on the road, proudly showing it off to clients over the coming months. Do let me know if you would like to find out more.

Andy Taylor, Head of Product - Debt Sale, TDX Group
e: andy.taylor@tdxgroup.com
m: 07825 170 638

Wednesday, 22 April 2015

What’s stopping us from being both fair AND effective?

When it comes to debt recovery, is there a choice to be made between a fair outcome and collecting cash?

By working with consumers even closer than we all do today, and taking a more holistic approach, I believe we can achieve increased debt resolution which, in turn, is wholly compatible with both fairness and results. For example, where people can afford to pay, we should be seeking strategies to encourage more of them to pay. Equally, there may be individuals that can agree to a longer-term payment solution if more time and less pressure is applied. Then there is the subject of waste. If we find that a consumer does not have the ability to pay or they have a genuine reason for non-payment, surely we can save the cost of pointless activities and put our money to good use elsewhere. A fair outcome does not mean simply pleasing the consumer and it shouldn’t mean collecting less cash. In collecting cash fairly, I believe it will also be more effective in the long-run. So, is there anything stopping us doing this today?

I guess there is the matter of who pays for those cases where no cash is collected even if that is the fairest outcome. The favoured commercial model for the industry today is Payment by Results (the results being cash collected). Can this continue if we aim to achieve a fair outcome for all? Can we really ask agencies to invest in a customer care approach but only agree to pay when they collect any cash? So, does a fair outcome mean saying goodbye to commission rates?

Perhaps not. Is the issue the PbR mechanism or what the payment is based on? If cash is not the only desirable outcome, then why incentivise only this outcome? Should we consider paying (and being paid) based on the desired result – the fair outcome? In simple terms, should we pay for what we want?

I can’t help but feel that all this depends on a paradigm shift within the whole industry based on the belief that we can work together to make the debt industry better for everyone; that our industry can be both fair and effective.

By Charlotte Mather, Head of Third Party Commercial, TDX Group