Automation software improves Reg E compliance, operational efficiency and member experience

The Challenge

In the heart of a large urban center, a community-based $800 million credit union serving more than 60,000 members faced escalating increases in payment disputes and a need for better performance during audits. Credit union management sought to modernize, consolidate and speed up payment dispute processes. What had worked in the past with smaller dispute volumes was prohibiting the operations teams from performing efficiently, particularly as payment dispute volumes increased. 

At this point, every step of the dispute process was manual from filling out forms; provisional credit decisioning; posting into accounting ledgers and issuing letters to communicate with members. The manual systems involved massive spreadsheets containing member payment dispute data. Both the amount of time and resources needed to process the disputed Reg E claims were growing. An increasing number of operations staff were required to handle dispute processing. Significant staff time was consumed sorting through spreadsheets in the absence of any centralized repository of data. Claim-related write-off losses were also higher than necessary because of the time and effort required to investigate small claim amounts and the inability to easily identify fraudulent trends.

Members might experience a resolution time of 100 days or more due to time-consuming manual processing. Amid the confusion of the paperwork, any underlying issues with third-party processors creating delays were difficult to assess. 

The Solution

After consulting the impacted staff, the credit union began the search for a solution that would automate as many of the manual processes as possible to help meet its compliance requirements and member service standards. FINBOA’s Payment Dispute solution was selected and implemented.

FINBOA’s Payment Dispute solution delivers intelligent automation to provide digitized and efficient dispute management processing. The solution is designed to streamline each step in the payment dispute process for Reg E debit, ACH and other electronic payment types. 

The entire dispute process is simplified from start to finish with automated alerts, templated letters, e-Signature, calculation of provisional credit, and GL integration to issue same-day member credit. The software allows the member to initiate dispute claims digitally, expediting processing, approvals and notifications. A centralized data repository makes it easy for authorized users to access information enterprise-wide. The dashboard and reporting capabilities help credit union staff identify trends, improve performance on audits, and mitigate remedial compliance requirements.

How the FINBOA Solution Transformed Payment Dispute Processing 

The FINBOA Payment Dispute solution made a big impact on staff and labor requirements. The credit union was able to cut out an entire department from the payment dispute process. Worker time has been reallocated to handle higher-value tasks such as claim fraud identification on smaller payment amounts. This is achieved using the trend reporting and visibility of the FINBOA claim data repository. Identifying fraudulent claims helps lower the credit union’s dispute write-offs.

The front-line staff has benefitted from a faster, more efficient dispute initiation process which reduces the data collection and entry time with each member. One branch manager said that it would take hours to work with members on disputes because each member might have multiple items to dispute. Now, with the FINBOA automated process, member claims can be initiated within a 15-minute window.

Members also have the option to initiate a dispute conveniently from an online device; which means they can report disputes immediately when they are discovered, not just during credit union business hours. Using the FINBOA dashboard, the call center staff has the ability to see exactly what stage the dispute is in the resolution process; enabling staff to provide members with an accurate status update on their dispute quickly, while the member is on the call.

“FINBOA has saved us so much time. And it gave us the option to have a single sign-on for members to submit their own disputes online through our online banking platform. The functionality of the FINBOA solution has just been fantastic.” - Credit Union VP of Risk and Quality

An entire payments department had been involved in reviewing the paperwork for accuracy, submitting to the external service provider  for processing and preparing it for the risk department. With the FINBOA solution, the payments department is removed from having to work payment disputes through the process. The manual steps are now digitized and automatically processed, validated and transmitted to the necessary parties for the next step. 

The accounting department eliminated the massive job of manually entering credits into the ledger. The provisional credits are automatically processed with the FINBOA solution, reducing errors and freeing accounting staff to work on more strategic tasks than ledger data entry.

Credit union management was also able to identify bottlenecks in the payment dispute process using the FINBOA Dashboard. The dispute tracking data collected by FINBOA can report on where any dispute is in the process, what actions have been taken or automatically processed and generate aggregate reporting to highlight workflow trends.

“The FINBOA system has helped us identify some performance issues with third-party service providers. When we manually tracked everything, we couldn't see that a dispute was taking more than 90 days to close, putting us out of compliance. The FINBOA dispute solution increased our visibility and management oversight of external provider performance.  - Credit Union VP of Risk and Compliance

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