Several trends seen among collections professionals in 2016 are likely to carry on this year, including creditors centralizing into shared services centers, slow economic growth and smaller commercial collection agencies disappearing or merging, according to a recent report by International Association of Commercial Collection Agency (IACC) experts.
“We have seen some large creditor companies consolidate internal resources, obtaining growth through acquisition in order to increase market share and profitability,” said Bryan Rafferty, vice president of Commercial Collection Agency of NY.
As the number of collection agencies decrease, opportunities open up for third-party growth because of less competition, Rafferty said.
“For companies that can operate effectively under the current regulatory/compliance-driven environment, there will be a lot of opportunity to gain market share through acquisition, business development, and competitive scorecard wins,” said Richard Kramer, senior vice president of Enterprise Sales, Altus Global Trade Solutions. Kramer also contributed to the IACC report. “Clients are looking to reduce the number of agencies they use in order to make compliance oversight and vendor management easier, exemplified by the Department of Education award and the trend in financial services awards.”
Another ongoing trend revolves around creditors issuing RFPs to identify the best collection agencies to work with, Kramer said. Look for these agencies to develop stronger web and marketing presences so creditors can research them more easily.
– Nicholas Stern, editorial associate