DOCUMENT Magazine - December 2008 - (Page 24)

more aggressive about collecting money from delinquent customers, leading to a surge in service shutdowns just as economic woes are pushing up the number of households falling behind on bills.” Billers are coming to realize the importance of having remittance operations that can leverage technology to optimize visibility and flexibility and accelerate revenue collection. In an October 2008 report released by Celent, “Bad News on the Street: Insurance IT Strategy and the Financial Crisis,” the authors comment on the challenges currently facing the insurance industry: “Carriers will need to reexamine their IT projects against a combination of strategic goals, including getting bigger by growing revenue, getting leaner by reducing expenses and increasing productivity and getting smarter by making better use of their data.” Achieving these same goals is necessary to operate a successful billing group during this economic downturn, and organizations need to apply an equal degree of scrutiny and focus on their existing remittance processes. K TraNsaCT & rEMiT By TraCy DalTON & GrEG aDElsON The Converging Money Trail Managing multiple remittance channel processing for a cohesive output mericans are facing what many describe as the most severe economic downturn since the Great Depression. Falling housing prices, rising mortgage rates and the tightening of worldwide credit markets have swiftly and acutely impacted nearly every consumer. As a result, many Americans are prioritizing their bill payments to make ends meet, and delinquency and default levels are rising. Payment delinquencies have extended well beyond those consumers holding subprime mortgages. According to an October 2008 study by Experian, delinquencies among adjustable rate prime first mortgages have risen 491% from the third quarter of 2006, and bankcard A delinquencies for these prime adjustable rate mortgage holders have risen 286% in the same time period. The same study indicates that more than one percent of all mortgages taken out by prime borrowers during or after 2005 had entered foreclosure by June 2008. That means that scores of billers, not just mortgage holders, are competing for a share of a diminished consumer wallet. According to a September 2008 survey by CareerBuilder. com, 47% of all workers and 21% of workers with annual salaries of at least $100,000 say that they always or usually live paycheck to paycheck. In a November 2008 Wall Street Journal article, Rebecca Smith reports that “utilities are becoming Under pressUre in the economic downturn, many billers are scrutinizing their remittance operations in an attempt to reduce head count, improve productivity and accelerate the cash cycle. Some back office inefficiencies that affect a company’s bottom line go unnoticed, however, because they manifest themselves in other parts of the organization, including accounting and customer service. One of these inefficiencies is the failure to integrate data from multiple payment channels into a unified database accessible by multiple functional groups. Most of today’s billers are managing a complex hybrid payment environment that includes paper, electronic bill presentment and payment (EBPP), recurring debit and credit, third-party consolidators, interactive voice response (IVR) and expedited one-time debit and credit payments. In addition, with the increase in M&A activity, many billers undergoing a merger or acquisition are finding that their payment mix has changed, particularly if the acquired company has a different blend of consumer and business customers than the acquiring company. Although many billers are actively encouraging their customers to move to some 24 DOCUMENT dec.08

Table of Contents for the Digital Edition of DOCUMENT Magazine - December 2008

DOCUMENT Magazine - December 2008
Ad Index
Editor’s View
BPM: Improving the Way You Process
Research Desk
The Compliance Shadow
Catching Web Fever
Charting a New Course
Reading the New Signal of Data
The Customer Finish
The Converging Money Trail
Fight Disaster
Putting on a Global Face
New Products

DOCUMENT Magazine - December 2008