Latitude by Genesys | Cris Bjelajac Coming Wave of Delinquent Debt | Receivables Roundtable Ep. 126

Adam:
Hello everybody, Adam Parks here with another episode of Receivables Roundtable.
Today I'm here with Chris from Latitude by Genesis to talk a little bit about
what we're seeing in the industry and some of the things that you can be
doing to prepare for it. But before we get started, I know a lot of you
probably already know Chris as a frequenter of the conference circuit
around the receivables management and creditor spaces, but for those
of you who have not been as lucky as me to get to know Chris personally
over the past couple of years, Chris, could you tell everybody a little bit
about yourself and how you got to the seat that you're in today?

Cris:
Sure, I think every time I go to these conferences and ask that same
question to people, everybody has sort of a roundabout way how they
got in the collections industry. Same with me, I was hired 20 years ago.
I'm coming up on my 20th year at the company. I was hired by a company
called SoundBite Communications, which a

Adam:
Mm-hmm.

Cris:
lot of people will remember. And I had no experience in.
contact center or dialing, I just was lucky enough to get the job.
And then when we started at Soundbite, it was a startup company.
We weren't, we had this technology. We weren't quite sure how
to make any money on it. It was the original business plan wasn't
really panning out. And somebody said, who needs to make a lot
of phone calls? That was collections industry. And we started
exposing Outbound Dialer and Outbound Voice Messaging to the
collections industry. And it just took off like hotcakes.
This was 2003. And I think our annual revenue that year was like,
I think we were doing like 2 million a year and then it went to
eight the following year, went to 16 the year after that.
And then it went to 40 and we went public in 2007. And it was,
I mean, it was just, you know, the salad days for outbound dialing. You

Adam:
Mm-hmm.

Cris:
certainly can't do it like we did back then. And then in 2013,
Genesis acquired SoundBike Communications. And during that time,
while we were doing all the collections work, I just took on a new
role at Genesis. And I spent five years in program management and
business operations and consulting, and just stayed out of the collections

Adam:
Mm.

Cris:
space. And then Genesis made another acquisition of interactive intelligence,
and interactive intelligence had acquired a small, software company a few years
earlier called Latitude.

Adam:
Mm.

Cris:
And I was like, Latitude? I know Latitude because they were partners
of Soundbite at the same time. Genesis didn't have a lot of people besides
old Soundbiters that knew much about collections. And then

Adam:
Mm-hmm.

Cris:
my boss said, hey, do you want to get involved with Latitude?
We need somebody with some level of experience in collections.
And... I was probably the most experienced, which shows you
how few people at the time had a lot of experience. And so I
jumped in and that was in 2018 and haven't looked back since.
Enjoying it. It was fun to get back into the conferences and
meeting a lot of old people, not old people, old friends.

Adam:
Hahaha

Cris:
There were some old people there too. But... old friends
who I met back in the aughts. And it's been great to get
back there and get back to the shows. And I've always enjoyed
the people in the business. Everybody's cool and laid back and just,
it's fun. And made a lot of new friends since I've been back too.

Adam:
Well, it sounds like you've had an exciting ride into the industry.
And I agree, there's no two stories that are the same as to how
people found their way into that collection.

Cris:
Mm-hmm.

Adam:
It always seems to be a little bit of a roundabout way. Now
I know a lot of our listeners are either using latitude are very
familiar with it and may or may not be using, you know, Genesis
tools as well. But could you tell everybody a little bit about latitude
by Genesis in Genesis?

Cris:
If you haven't heard of us, like, what am I doing wrong over here? It's my job

Adam:
I'm

Cris:
to make

Adam:
sorry.

Cris:
sure you know about latitude by genesis. It is a, for lack of a
better term, a collection CRM. It's the nerve center of a good
collection agency or a creditor's collections department.

Adam:
Mm-hmm.

Cris:
It's really that simple. You need a nerve center, a system that
manages all the data that you have to deal with and is the central
point that not only you're your managers work on, but your agents
work on as well. And as that nerve center, we are connected to all
different types of other providers, ancillary providers, other
software companies and data providers.

Adam:
Mm-hmm.

Cris:
So it's a great tool to have to be able to manage your entire
collections operation, whether you're a creditor or a third party
agency or a debt buyer or a servicer. So you know, I like to say,
really, we're a collection agency in a box, just add agents. You can

Adam:
Mm-hmm.

Cris:
just buy it from us. You're really ready to go from day one as
long as you've got some people sitting in front of screens to talk to the debtors.

Adam:
And so it sounds like Gen, it sounds like latitude by Genesis ties
right into what you guys do at Genesis. Can you give us kind of like
the 10,000 foot overview of what you guys do there?

Cris:
Yeah, Genesis is, you know, we're a very small part of a very large
software company. Genesis is a $2 billion plus software company and
started about 30 years ago in the contact center space. And they
originally started out as a as a company that they built software sort
of like what we would call middleware today. But, you

Adam:
Mm.

Cris:
know, we talked to this large piece of software that didn't
talk to this large piece of software. And so Genesis engineers
at the time were. a couple of guys wrote some code that would
get these two systems to talk to each other and that's how the
company was born. And what I like about Genesis is that's always
been part of our DNA. We wanna sell you the software that we have.
We're capitalists, we want to sell software and make money.
But if you find something, a different piece of software that
suits your needs better, we're happy to just sell you the. stuff
that connects and talks to everything.

Adam:
Mm-hmm.

Cris:
And so Genesis Cloud CX is now the flagship product for Genesis.

Adam:
Mm-hmm.

Cris:
And that is, we're seeing a lot of uptake over the last couple of
years on the collection side of business.

Adam:
Mm-hmm.

Cris:
So it used to be I could only go out to our customer base or to
our prospects and just sell them latitude because... The old Genesis
software was frankly a little too pricey for this market. But now with
Genesis Cloud, not only is it a good price point that fits the market,
it is an incredible piece of software, highly functional and can replace
everything that most of our customers or prospects have for their contact
center. So you've got the CRM Latitude by Genesis, you've got Genesis Cloud CX.
you marry them together, then you really got a collection agency in a box.
You really don't need much of anything else. You know, maybe somebody in
the HR department, but that's about it.

Adam:
Well, I think this also brings up a really interesting discussion.
I know we're kinda here to talk a little bit about kinda the economic
environment and those kinds of things, but one of the things that I
think is really interesting about what you guys have done with
Latitude by Genesis is the interconnectivity among systems,
meaning so many platforms kinda close themselves off or only
allow you to integrate with these individual groups. You guys have
been very open with the way. that you've provided APIs to a variety
of different companies that offer not even necessarily competing services,
although you do that as well, but like those to help you enhance what
you're doing on your platform. So like Latitude by Genesis, and then
bolting on something like a Success KPI, which is part of your partner
network, enables people to leverage some of the artificial intelligence in
some of these other tool sets while maintaining the integrity of the
system of record. which is kind of that most important part of
managing your collection accounts, right? Whether you're sending
these to outsource, you're gonna communicate with these consumers
directly, and having the flexibility of a platform that can be molded.
And to me, I look at, you know, in organization or software platform
like yours, like the train tracks, right?

Cris:
Mm-hmm.

Adam:
These are the tracks that are kind of running the business.
And as we look at the current economic environment, and we
look at how we're... There's this world of balance that we have
to find. We tend to see for a number of years called the 2008
timeframe, you saw a lot of accounts with low collectibility. And

Cris:
Yep.

Adam:
then we went into a different period where we had far less
accounts that were far more liquid, like a lot more collectible.
And now we're looking at this wave of potential charge-offs
that are coming down the pipeline. And I think collection agencies,
creditors, and debt buyers are all looking at their business and going,
if I have to add a thousand more trains, or a thousand more cars to
this train, are my tracks gonna hold?

Cris:
Yes.

Adam:
And it feels like that's kind of the world that you're living in right now.

Cris:
It really is. It's interesting. Well, I'll just make this statement
right off the bat. If you already have latitude, you're already
set up for success because we can handle as many cars you want
to send down that track as possible. That is not an issue for an
enterprise grade collection CRM. That may not be the case with
your existing CRM. If you are worried about that, I think that's
a good worry to have. And you should be considering those types
of things. That's putting my sales hat on. a bit. But you're right
about the collectability. I think to me, that is the thing that keeps
me up a little bit at night. And some other people, my customers included,
maybe even more up at night. That was a bad time. We had lots of inventory,
uncollectability. It was not good for the collections agency or the collections
industry. It's funny, I tell you're at your kid sporting events and you're
talking to your other dads and what do you do for a living? Oh, I do this
and what do you do for a living? And everybody in the whole country is
attuned to the economy and is hearing the story or reading the stories,
even right now, used to be just in our trades, but now it's coming out in regular

Adam:
Mm.

Cris:
mainstream media. the amount of debt that's out there, the Gen Z debt,
their lack of ability to pay back on it. And what they look at, they look at me,
oh, your industry must be amazing when those times come on. And I tried to
explain to them that that's not necessarily the case.

Adam:
Mm-hmm.

Cris:
Yes, inventories can be high, but if nobody's collecting,
it's not collectible. That doesn't do anybody any good because
costs go up and collectability goes down. And so it's it doesn't
seem you have to think of it the way we think of it here in the industry.
But explaining it to people outside the industry is a little different. So getting

Adam:
Thank

Cris:
back

Adam:
you.

Cris:
to 2008, 2009, we were, you know, an outbound dialer sound by
people were loading up hundreds of thousands of records, making
hundreds of thousands of calls. And really the liquidation rates were
just tanking. And so I worry about that sort of situation again.
It seems different. I don't know if it is different, but maybe
that's a gut feeling. I don't have... Yeah. Please. Yeah. Please.

Adam:
I don't think you're wrong, Chris. I don't think you're wrong.
And I think from what I'm seeing is the efficiencies that can
come from some of the technology that we've rolled out, right?

Cris:
Mm-hmm.

Adam:
So you're seeing organizations that are implementing artificial
intelligence, they're improving their scoring systems, they're
finding new and interesting ways to communicate digitally, right?

Cris:
Yep.

Adam:
Reg F kind of opened the door for some new things. and or
really left the door open so to speak,

Cris:
Yeah.

Adam:
you know for new communication channels, but if we don't
find efficiencies in our work like the margins of the collection
agency have been shrinking over time

Cris:
It's,

Adam:
and And

Cris:
yeah,

Adam:
if you're

Cris:
it's

Adam:
gonna

Cris:
been

Adam:
shrink

Cris:
brutal.

Adam:
those margins where you were where else can you go to create new revenue?

Cris:
Yeah,

Adam:
Right, you have

Cris:
it was

Adam:
to find

Cris:
a...

Adam:
efficiencies in your operations

Cris:
2022 is a tough year for our customers. 2020, great year.
2021, decent year. 2022, bad year

Adam:
Hmm.

Cris:
for a lot of our customers. Obviously student loans is,
you know, that one went in the toilet. And, you know,
we don't know if or when it'll come back. We don't, but,

Adam:
It won't be before an election cycle, I can

Cris:
yeah,

Adam:
guarantee that.

Cris:
probably. But the rest of it, I think people are well poised.
I think what's good right now is it seems like everybody remember,
it doesn't seem like it was that long ago, but even though it was quite a while ago,
12 plus 13 years ago,

Adam:
Yeah,

Cris:
something like

Adam:
it's

Cris:
that.

Adam:
been

Cris:
It feels

Adam:
some time, but it does feel like yesterday for those

Cris:
like

Adam:
of

Cris:
it was

Adam:
us

Cris:
just

Adam:
that were

Cris:
years

Adam:
in

Cris:
ago.

Adam:
collect. I mean, honestly, look,

Cris:
Really

Adam:
I came

Cris:
does.

Adam:
into the space in 2006 and 2008 into

Cris:
Yeah.

Adam:
2009, we had a major crisis 2011 comes the birth or 1011 comes the birth of the CFPB.
And everything starts to change. It does feel like it was yesterday. I'm hoping that
everybody's caring for that historical context,

Cris:
think

Adam:
right.

Cris:
they

Adam:
And

Cris:
are.

Adam:
I think that the math changed in 2020 as well. So we all we're using,
let's say, 20 years of data to make decisions and do predictions.
The whole world changes in 2020, 2021, 2022, we're starting to
come back into certainty at the end of 2022 and into the beginning
of 2023, but now how far back can you go to use your data to
create those efficiencies? So now that the world has kind of gone
through this shake and cycle, we have to use these shorter periods to...
use in our prediction models as to the collectability of accounts, as to

Cris:
Yes.

Adam:
what we should be doing in terms of forecasting on financials for
debt buyers or agencies into the future. It's an interesting time
to where, it's the first time in my career where the data set has shrunk exponentially.

Cris:
Yeah, what you just said that tapped into my mind is really back
then it was, collecting was like a blunt force object.

Adam:
Yes.

Cris:
You just had to pound it, right? And

Adam:
Yep.

Cris:
if you pounded it right and did a little bit of optimization,
you were gonna be fine, right?

Adam:
Yeah.

Cris:
But since then, now with the CFPB and RegF and everything else,
You've got to be far more nuanced. You have to take advantage of technology.

Adam:
Mm-hmm.

Cris:
You have got to really operate smarter than the other agencies
that you're competing against. You've

Adam:
Mm.

Cris:
really got to apply technology in the right way and be creative about
how to do it and flexible about how to do it. And... be adaptable to
what we're seeing in the market and really be looking at those reports.
Whether you're, you know, if you're looking at our canned reports,
you're using an outside service, you just really need to be constantly tuning it.
And it requires, it requires discipline to continue to think of new and
unique ways of approaching it and be willing to experiment. And that,
what I like about Latitude is we provide that ability to you.

Adam:
Mm-hmm.

Cris:
with the integrated, we have more than 45 integrated vendors and
we're adding more every year. So, you know, if there's somebody
out there who's really kind of come up with a great solution,
getting back to our DNA, we wanna connect with them and allow
our customers to use that type of thing. But you don't wanna be
locked into a system with a tiny subset of good providers.
It might be some decent providers in there, but you know,
there's somebody else out there might be cooking up the...
a new thing that we want to integrate and if you're locked into
something else, that's not going to be good for you or your business.

Adam:
Well, living in a finite world is never helpful for a technology organization,
but I think it's interesting as, you know, as we look at the different levers
that we can pull in our businesses to affect change. And so I think, you know,
changing to workflows and data waterfalls and other things are going to
be essential to finding those efficiencies and maintaining those profitable
margins that a collection agency ultimately needs as such a resource heavy
type organization. And even on the back end of creditor operations,
I feel like for a long time debt collection or debt sales was a major
strategy that was being used. I feel like it pulled back with the birth
of the CFPB and we're starting to see new products that are coming into
the marketplace, as well as the creation of new consumer financial products
like the FinTech type products, right?

Cris:
Mm-hmm.

Adam:
And so when we're looking at consumers who were willing to originate
a loan online, digital communications tends to be a more effective
strategy with those people. But being able to pull those levers to
work with different consumers through different communication
methods and trying to understand the mentality and perspective.
of those consumers based on their experience with that originating creditor,
etc. I think is really going to be a driving factor for how we look at our
industry over the coming, let's call it three to five years. Because as far as
we can tell on all the data that I've seen coming from TransUnion and others
is it looks like there's this wave of consumer delinquencies that will crash.
Now, April did not tell that story. But cyclically, as a industry that lives in
a perpetual annual cycle, right? April and May tend to be the best months
of the year. That's tax return time, right? Like that's when people get this
injection of personal capital and consumers start to pay down debts.
Like that's a fairly common cycle. So I don't know if the dips that
we're seeing in delinquencies in the month of April are going to be a
direct. You know result of that. That's what my gut says because that's
what my guts told me for the last 20 years Watching the same cycle happen
over and over again regardless of the economic environment So I'm curious
to see how some more of this unfolds I think the predictions are fairly strong
that we do see a lot more Accounts that come into the industry, but every time
that that volume goes up so exponentially so does the decrease in terms of
the collectability of accounts. And so in those times, we look for those technology
efficiencies that we can apply, whether it be communication channels, data,
waterfalls, workflows, et cetera. And it sounds like you guys have kind of
positioned your clients to be able to pull those levers when they need to.
So, I'm gonna go ahead and start with the first question. What are the
things that you guys do that you guys are doing to help your clients to be
able to pull those levers when they need to?

Cris:
We do. I think the one thing that we, and maybe this will start a discussion
down below on YouTube, but where I'm unclear and I think we're a software
company and we're not as tuned to this on a daily basis as the folks who are
actually running agencies. But the thing that I'm, another thing I'm sort of
worried about is when are the creditors going to start releasing more of their
inventory? I think

Adam:
Mm-hmm.

Cris:
they've been holding it back for way too long. I mean, I get it.
I understand why they held back.

Adam:
Mm-hmm.

Cris:
But if the tsunami is really there, and we know the tsunami is there,
it's just whether it is sort of being artificially held back right now.
So are they gonna trickle feed it down, or is it just gonna get released
into the market? And I don't know what's best, but

Adam:
I ever thought.

Cris:
I want whatever's best.

Adam:
I don't know about what's best, right, is a subjective statement, but here's what

Cris:
Yeah.

Adam:
I can say, and I know a lot of people have heard me talk about what
I like to call the Clark Griswold theory. For those of us that have

Cris:
Bring

Adam:
seen,

Cris:
it.

Adam:
right, like National Lampoon's Christmas Vacation, this is where I get it from.
It's the bonus at the end of the year. And I think when financial institutions are
either, you either have individual executives that are looking at how their bonuses
are structured and whether or not that... debt sales lever is something that they
want to pull to put them into a financial position, whether it be for a bonus or the
financial performance and results that they're going to demonstrate for that ending
of the year. I always saw this influx when I was a debt broker, there was always
this big influx of debt sales from the creditors and from debt buyers that would
start happening and in November into December and

Cris:
Mm-hmm.

Adam:
like right before New Year's was always a rush to close deals for people,

Cris:
Got

Adam:
right?

Cris:
it.

Adam:
And

Cris:
OK.

Adam:
there was always a lot of transactions that were happening in that time span.
And maybe it's because I was watching National Lampoon, Christmas

Cris:
Hahaha.

Adam:
vacation, while I was processing the post sale support and, you know, those actual,
you know, debt sale transactions. But I was kind of looked at it from that perspective.
And so I think as we start moving into the end of the year, although 2023 could be
unique being the beginning of the 2024 election cycle. So that's why I don't think
we're gonna see a ton of student loans coming back into the marketplace until probably
early 2025. I believe it's like September is when they're supposed to be reactivated.
I expect the can to get kicked yet one more time because

Cris:
Let's.

Adam:
nobody wants to go into it's time to pay your bills right before it's an election.

Cris:
All right, I'm gonna, let's do a friendly bet. 20 bucks, I'll say 20 bucks,

Adam:
Okay.

Cris:
that it will be released in September.

Adam:
Okay, hey look, I'm all for debt obligations becoming reinstated and allowing the
federal government to take that influx of capital to pay down those loans and not
be stuck in a guaranteed position.

Cris:
And I don't have any data to back that up, but

Adam:
That's

Cris:
that's

Adam:
all right.

Cris:
my good

Adam:
Let's

Cris:
feeling.

Adam:
look at it. And that's fine. I mean, I'm going with my gut instinct as well.
So I'm curious to see how that unfolds.

Cris:
20 bucks

Adam:
But

Cris:
and

Adam:
now

Cris:
I'll pay

Adam:
we're gonna

Cris:
you.

Adam:
have to do a follow-up

Cris:
We'll

Adam:
at

Cris:
do it

Adam:
DCS.

Cris:
at Outlaw DCS, yeah. Ha ha ha.

Adam:
I'm feeling like we got a follow-up coming at DCS, which is gonna be at the
end of September at the Red Rock in Las Vegas. Very much looking forward

Cris:
Yep.

Adam:
to that show, especially coming out the tail end of such a successful CRS at
the end of May. Chris, I always enjoy our opportunities to chat. I really wanna
thank you for coming on and having such an interesting discussion with me today.
Your insights and perspective is always appreciated.

Cris:
That's very kind of you and thank you for having me. I really appreciate it.

Adam:
For those of you that are watching, if you have additional questions that you'd like
to ask or you wanna get into the mix on this discussion, you can leave those comments
on LinkedIn and YouTube and Chris and I will be happy to respond to those.
If you have additional topics that you'd like to see us discuss, you can leave those in
the comments below as well. And hopefully I can talk Chris into coming back onto this
podcast yet one more time to continue helping me create great content for a great industry. But

Cris:
Any

Adam:
until

Cris:
time.

Adam:
next time, Chris, thank you so much for your help. I really appreciate you.

Cris:
Thank you, I appreciate you too.

Adam:
And for all of you watching, thank you as well. We'll talk to you again soon.