Panel Discusses How Blockchain Can Improve Debt Collection Process

ORLANDO — Could blockchain be coming to the accounts receivable management industry? A panel of speakers presenting at ACA International’s annual convention here yesterday laid out a series of scenarios in which the technology could be applied to debt collection process, with some surprising benefits.

For those who are not terribly familiar with the technology, think of blockchain like a giant Google Spreadsheet or database. But instead of everyone having access to edit the document, Blockchains are immutable and unable to be edited. It’s called blockchain because the data are stored in structures called blocks and each block is linked together like a chain. The entire chain is encrypted, establishing a secure audit trail that can be used to document the contents of each block.

To help the industry better understand the technology and its applications, Lauren Valenzuela from TrueAccord, Rebecca Taylor from Equabli, and Loly Sosa from Actuate Law gave a presentation on blockchain, and provided a number of examples of how it can be used in debt collection.

The most obvious application is establishing clear chains of title when buying and selling portfolios of debt. Blockchain can be used to create secure audit trails and protect records, preventing accounts from being sold to multiple buyers and providing peace of mind.

The technology could also help manage the dispute resolution process more quickly and efficiently, because requests for original contracts and documents would be handled by taking them right from the chain and providing them to the consumer. “Blockchain has the potential to reduce the number of consumer disputes,” Valenzuela said during the presentation.

Wide adoption of blockchain is still likely far off in the distance for the ARM industry, the panelists conceded. But the potential benefits of the technology are strong enough that there is the potential for it to become part of the debt collection process.

“The technology is at the beginning steps,” Taylor said. “This is going to take steps.”

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