Collector – January 2020 - 38

BUSINESSOPERATIONS

Tech Times are Changing
Tech-enabled entrants are challenging the status quo. Could "call and collect" soon become a thing of the past?
By Michael Lamm

A

lthough the accounts receivable
management (ARM) industry
hasn't traditionally been a hotbed
of activity for startups, there is an appetite
for new entrants in the marketplace. How
can we account for this change?
Once upon a time-20+ years ago-an
entrepreneur could start a debt collection
business in his bedroom, garage, guest
room or basement. The cost to start
and eventually grow a business wasn't
prohibitive. In fact, some of the biggest
companies in the industry that grew and
eventually exited can claim these
modest beginnings.
During the past two decades, though,
the evolution of the Consumer Financial

38

Protection Bureau-coupled with
burdensome compliance and regulatory
requirements-have caused starting a debt
buying company, collection agency or
hybrid to become an imposing task.
Things are changing, though.
A number of startups backed by venture
capital have entered the industry during
the past two to three years. The structure
and sophistication of these companies have
deviated significantly from previous norms.
Because these startups have come in with
a heavy technological emphasis, the calland-collect model has become secondary
to tech-enabled models.
Baked into their heavy technological
emphasis is a transformational shift to

text, email and chat messaging. This
has happened even though rulemaking
hasn't yet indicated these technologies are
acceptable. We are nevertheless starting
to see companies take the risk of going
into the market even without clear rules
in place, as they develop tech-enabled
business plans to support their activities.
Since tech-enabled infrastructure can
carry a high price tag, the cost to start
such a practice in the ARM industry has
changed. To do it right, a startup will be
looking at an investment of at least $1
million before earning even a dime of
revenue. This amount takes into account
licensing, bonding, technology platform,
facility and people.

ACAINTERNATIONAL.ORG


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Collector – January 2020

Table of Contents for the Digital Edition of Collector – January 2020

Upfront
Industry News
Best Practices
FYI
Collection Tips
Radical Redesigns
Four State Legislative Trends to Watch
Calendar
Honor Roll
Education Spotlight
Our International Reach
Tech Times are Changing
Exceptional Programming and Speakers Pay Off
Looking Forward to Monday Morning
Contextualizing Consumer Complaints
Another Look at Written Disputes
ACA SearchPoint
Ad Index
Membership
Last Word
Collector – January 2020 - Cover1
Collector – January 2020 - Cover2
Collector – January 2020 - 1
Collector – January 2020 - 2
Collector – January 2020 - 3
Collector – January 2020 - Upfront
Collector – January 2020 - 5
Collector – January 2020 - Industry News
Collector – January 2020 - 7
Collector – January 2020 - 8
Collector – January 2020 - 9
Collector – January 2020 - 10
Collector – January 2020 - 11
Collector – January 2020 - Best Practices
Collector – January 2020 - 13
Collector – January 2020 - FYI
Collector – January 2020 - 15
Collector – January 2020 - Collection Tips
Collector – January 2020 - 17
Collector – January 2020 - 18
Collector – January 2020 - 19
Collector – January 2020 - 20
Collector – January 2020 - 21
Collector – January 2020 - 22
Collector – January 2020 - 23
Collector – January 2020 - Radical Redesigns
Collector – January 2020 - 25
Collector – January 2020 - 26
Collector – January 2020 - 27
Collector – January 2020 - Four State Legislative Trends to Watch
Collector – January 2020 - 29
Collector – January 2020 - 30
Collector – January 2020 - 31
Collector – January 2020 - Calendar
Collector – January 2020 - Honor Roll
Collector – January 2020 - Education Spotlight
Collector – January 2020 - 35
Collector – January 2020 - Our International Reach
Collector – January 2020 - 37
Collector – January 2020 - Tech Times are Changing
Collector – January 2020 - 39
Collector – January 2020 - 40
Collector – January 2020 - 41
Collector – January 2020 - Exceptional Programming and Speakers Pay Off
Collector – January 2020 - 43
Collector – January 2020 - 44
Collector – January 2020 - Looking Forward to Monday Morning
Collector – January 2020 - Contextualizing Consumer Complaints
Collector – January 2020 - 47
Collector – January 2020 - 48
Collector – January 2020 - 49
Collector – January 2020 - Another Look at Written Disputes
Collector – January 2020 - 51
Collector – January 2020 - ACA SearchPoint
Collector – January 2020 - Ad Index
Collector – January 2020 - Membership
Collector – January 2020 - 55
Collector – January 2020 - Last Word
Collector – January 2020 - Cover3
Collector – January 2020 - Cover4
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