Alex: Hey everybody welcome back to another
episode of Debt Collection 101 here on Arbeit U. Spencer: Yes and we
have a very special episode, right? We are talking about banking in collections,
correct? And who better to talk about banking than our banker: Ted. Ted: Hi, how’re you doing? Alex: Thanks for joining us. Spencer: I got a shout out MarCom because they
gave me this jacket. It’s actually is on the back. Shout out to MarCom so if you guys want to send me more swag I’ll be happy to wear it. So let’s start off by telling us
about yourself. Ted: Yeah so Ted Janicki I actually worked for Bank of
America and our commercial lending group. I’m a business banker and manage a bunch
of small businesses here locally and been doing this for 15
years so while I look rather young and dashing and what not, I have a lot
of industry experience with you know a multitude of different local industries
whether that’s the debt collections or anything else so yeah excited to
be here and share my knowledge and see what we can do here. Spencer: Yeah, thank you for doing this. Alex: Yeah thanks. Spencer: Hopefully, we won’t drag you down. Alex: Yeah, you used to have a
lot of business with collection agencies right? You used to do a ton of work with
them. What was that like? What was the relationship like? What were the
things that you were doing with them? Ted: Sure, yeah so I mean what you really
see with a lot of debt collection agencies is, especially the larger ones
that it’s kind of the ones that I really focused on not kind of the the smaller
ones that are you know being run in small offices, but the larger ones are
pretty cash centric, right? So you have a lot of cash to manage and you
know for any business whether it’s there’s a debt collection industry or any other
industry where you have a lot of cash to manage you know there’s a lot of
different things especially when it comes to account reconciliation and
things like that that need to be on track because you know especially in the
debt collection industry there’s a lot of inflows and outflows, right? Money
coming in and money going out. Who’s it’s coming from? Where is it
coming from? Is it a check? Is it an ACH payment? Is it a credit card payment and
being able to actually manage and track all that and have a reconciliation
system that does that, I think is absolutely key. If there’s one thing that a debt collection
agency should spend on besides you guys Spencer: Great pitch. Ted: It is actually account reconciliation and Treasury services. So that should be you know a big expense
that debt collection agencies use and invest in. Alex: I
can see that for sure. Especially if you’re like an agency third party
working other people’s debt, contingent on you right? I know a lot of
companies require like separate accounts for all that right? Ted: Yep. Alex: You have to have
separate accounts so that you’re not spending that any money which isn’t really
theirs and stuff like that. Ted: Exactly, yeah there was setups where I mean there were
some agencies where they would have 60-70 accounts and they
would call me and they’d be like hey Ted can you tell me who this payment came in
from yada yada yada and I’d just be like whoa, No I can’t because that’s way too
much work. You should be on this platform and banks, I mean and to be honest like all
banks have a platform that helps them reconcile their
incoming and outgoing payments, right? and some are better than others but all
banks do it and they all do it pretty similarly. So if you are not working
with your bank or your banker as far as the type of reporting and
customizable reporting that you need to manage the business efficiently then
then you need to have you need to have a conversation with them and get that
in place. Spencer: and we were kind of talking about this before the episode started
that banks are exiting the collection industry, right? Do you know
like the reasoning behind that? Like why banks are choosing to do that? Ted: Yeah, it’s
really it comes down to reputational risk for a lot of the institutions
and you know I will tell you banks are looking at a number of different
industries as to you know ones that they may not want to do business
with and you know banks nationally there’s so many
different directions that some banks want to go in. There are some banks
that actually focus in my collection agencies. That’s who they want to do
business with. There’s other banks that don’t and it’s not just the
collection agency industry that banks are taking a hard look at. You know a lot of the
upcoming marijuana business industry which is a cash cow, which is gonna
be a huge economic boom to the states that are that are onboarding them.
You know there’s banks that just won’t touch it while there’s other banks that
will. So it’s you know it’s not collection agencies per se, it’s
just the nature of the beast and how banks want to go to market you just got
to find that niche and that institution that will work for you. Alex: Yeah, that makes sense. It seems like that one kind of makes more sense but the one you said before, like the home healthcare. Spencer: That one blew our minds. Alex: It seems like but once you kind of think well yeah, I guess there
could be a big new story one day. Ted: Big news story about like abuse going on. Spencer: That’s a
great point, right? Like there’s probably 99% of all health companies do a great
job, right? But you have the one that is beating people at their house and it’s
too much of a risk. You know what I mean? Ted: Yeah and that happens. I mean especially and I
think that’s why you see like maybe like community banks or smaller banks will
take on more riskier business because they haven’t been burned by it. If you
look at a national bank, let’s say like Citi or Chase or something like that
where they have coast-to-coast presence man, if they got burned California you
better believe if they have some company that does the same thing in Idaho or New
York or whatever they’re gonna they’re gonna start looking at it differently so
you know the flows of banking yeah exciting as it may be.
Spencer: So if you’re a collection agency you would recommend partnering with like a small
regional bank. Ted: Yes, yeah definitely just you know ask questions. You know
talk to bankers. Talk to other people in the industry. Who are they
doing banking with. How are they managing that because there are
institutions that will onboard them and do a really good job
with it. It’s just finding the right fit for whatever your needs are.
Alex: And then so you mentioned earlier you know managing all that different
accounts and everything like that for collection agencies is what you think they
should be spending money on and doing for sure. Is that something
that banks do for the collections agency or is there a separate software that people
are using for this. Ted: No, banks will do it for the collection agencies. Some banks will contract it out and you
know bring in like a vendor to do it for them. Some banks will design it
themselves but each bank should have its own Treasury platform. Some are really
really good. Some are really really bad. Some are really really sophisticated.
Some aren’t. It all depends again on what what you need as a company. So yeah again
it’s gonna be whatever that that institutions gonna provide you.
Alex: So if you haven’t talked to your banker about it make sure you… Spencer: You talk to your banker about that. Ted: Yes. Alex: That’s it. Spencer: You made that super easy on us.
Thank you. Ted: No problem. Spencer: So let us know your thoughts
if you have any questions. Banking questions. We can give them to Ted, he
can give it back to you. Submit them below subscribe, and as always see you next
week, Alex: Thanks for watching. See you.