Customer-Facing BI Helps AACA Manage $2.6 Billion Portfolio

Web-Based Self-Service Environment Makes Debt Collectors More Efficient

The American Alliance of Creditor Attorneys (AACA) manages attorney resources throughout the U.S. and Puerto Rico to recover debt for high-volume credit grantors and debt buyers. AACA combines the resources of a national network of law firms with the convenience of a single vendor source for filing suits and executing on judgments. Its primary clients include credit card companies, property management companies, automobile loan lenders, and "paper buyers" who purchase credit card and other debt. AACA forwards post charged-off debt from these clients to a network of law firms, who help them obtain payments on debts that had previously been uncollectible.

AACA was challenged to promptly identify and address problems with law firms or debt portfolios. For example, it would sometimes take as long as six months to uncover an account languishing in a non-suit status or waiting on documents. These delays hindered the ability of the firm's attorneys to make adjustments to their collection efforts. As a result, they were unable to negotiate payments or move accounts to judgment as quickly as possible.

Developing the Pipeway

To overcome these challenges, AACA developed Pipeway®, an external-facing, browser-based business intelligence (BI) environment that uses color-coded pipes and charts to present account data to clients who manage debt portfolios and law firms that interface with debtors. This customer-facing information system relies on the Information Builders WebFOCUS BI platform to present account collection information to more than 800 users in a completely secure environment. Seventeen employees at AACA also use the online reporting application to manage court costs, remittances, and compliance.

Since launching Pipeway, AACA has a more effective way of plotting individual files or batches against legal timelines, creating an official system of record that makes debt collectors more efficient and keeps all parties on the same page. Additionally, internal staff can examine what each law firm is working on to make sure they are servicing clients in a timely manner. By instantly locating and eliminating process logjams, the company can better handle all aspects of financial reconciliation for its clients, saving them substantial time and money.

Pipeway provides users with:

• A common interface via a secure Internet site
• A data platform enabling advanced report writing
• Relevant information in a simple, yet powerful, graphic presentation
• The ability to view individual file data
• Secure access tailored to log-in permissions
• A color-coded system that enables easy review

How Pipeway Works

Pipeway uses color-coded pipes to reveal the status of each account and display the progression of pertinent legal events. For example, a red pipe means an account is closed. A green pipe means a debtor is paying. Blue means an account is going in the direction the client should expect. Purple means an account is in judgment, but not paying, and orange means something else is happening that needs to be fixed. The pipes also identify milestones, such as sending out demand letters, filing suits, obtaining service, and obtaining judgment. Pie charts display account summaries, or batches, of accounts. Users are able to drill down into these pie charts and extract data into spreadsheets for further analysis.

"Previously we could only see the account data through a character-mode interface, which customers accessed through a VPN connection," explains Andrew Moulton, director of MIS at AACA. "These external users drill down to individual attorneys or determine if an account was open or closed.

"WebFOCUS gives us a much more powerful way to deliver this same information. Parameterized reports let people access precisely what they need. It saves us time since we don't have to develop queries or reports to assist with analysis."

Best of all, it makes the clients more self-sufficient. One such client is Nikki Turner, supervisor of law firm operations at First Resolution Investment Corp., a debt purchasing company in Vancouver, British Columbia. First Resolution relies on AACA to distribute its debt portfolio to various law firms based on zip code. The law firms handle all legal proceedings associated with suing the debtors for payment. They use Pipeway to monitor and report on their progress.

"Batch reports, statistics, and drill downs decrease the amount of time we need to spend monitoring accounts and accessing status information," explains Turner. "Instead of e-mailing AACA for status updates, we can analyze the data directly through the Pipeway. It keeps everybody on the same page – AACA, the debt purchase companies, and the law firms. In our case, it makes us more self-sufficient and enables us to handle a larger volume of business."

Turner's staff uses the Pipeway to see the status of each account without having to continually contact the law firms for updates. "Pipeway is far more advanced than our previous system," she states. "It gives us many ways to view and analyze information, either in aggregate form or on an account-by-account basis. It is also helpful for quarterly and year-end auditing, with summary reports that give us a macro view of the business."

According to Greg Barnes, director of client relations and marketing at Machol & Johannes, LLC, a Denver-based law firm that specializes in legal collections, Pipeway enables his team of debt collection specialists to work smarter by grouping accounts. "I'd say our operation is 25 to 50 percent more efficient because of this business intelligence system," says Barnes. "We can look at a pie chart and see immediately which accounts are on track and which ones need attention. Pipeway also enforces data integrity for all parties. It is a shared, authoritative system of record."

In this era of heightened consumer protections, a case against a debtor must be watertight. For example, the attorney needs to know if there is a dispute or if a debtor files a counterclaim. Is the account moving properly? Did the firm file suit in the right amount of days? Did they collect the right amount of money? "We keep AACA informed with this system," says Barnes. "Other methods of data transfer don't have the reporting and status updates that we get from Pipeway."

Expanding Pipeway

One of AACA's primary information systems is a packaged application called Recovery Management System (RMS) from Fair Isaac Corporation. Seventy percent of the post charged-off consumer debt in the U.S. is processed through RMS, making it the industry standard for large-scale debt collection. AACA runs RMS on an IBM iSeries computer.

Over the years, AACA has developed its own modules to handle payables, receivables, and other accessory RMS functions. They sought WebFOCUS to present information to employees and customers in a comprehensive and secure fashion using a Web interface. WebFOCUS enforces security in the RMS database via the iWay DB2 adapter, ensuring that each client's data remains distinct.

"When you step back and look at what we deployed in such a short time frame, it is really amazing," says Moulton. "WebFOCUS was a godsend for us. It allowed us to tap into legacy data without abandoning our other IT investments. WebFOCUS gives us greater insight into what is going on so we can be more proactive."

AACA is now figuring out how to use this same debt collection information for financial reporting and performance analysis. They also want to use WebFOCUS to enable people to create their own reports, both internally and externally. Finally, they plan to investigate the statistical analysis potential of combining WebFOCUS with SPSS, as well as the value of displaying location-specific data on maps by using WebFOCUS with geographic data from ESRI or Google Maps.

There is no question that Information Builders has had a big impact on the organization. AACA has used its technology to successfully change the way it does business – at a price point that made sense when compared to the return.

"We're developing BI applications to give us deeper insight into the data – to find outliers such as firms that are not doing a good job or identifying types of accounts that don't pay," concludes Tom Balcerzak, chief executive officer, AACA. "This will give us greater insight into clients, law firms, portfolios, and particular accounts. The value is clear."