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AI and Beyond: How Technology is Shaping Debt Collections in 2020

AI & Beyond: How Technology is Shaping Debt Collections in 2020

It goes without saying that emerging technologies have effectively redefined industries across the board – shaping how we communicate, how we work, and how success is measured. In the world of Debt Collection, 2020 promises to see some fresh changes as several key technologies take hold and level up the way debt collectors work.

For starters, debt collection has long been a manual, labor-intensive task that involves managing accounts receivables, making a high volume of calls, sending emails, and working with delinquent borrowers to structure payment plans. Even with all those efforts, the resulting debt recovery and bottom-line revenue can fall short of expectations.

This significant potential for improving on antiquated processes, coupled with a deep pool of unrealized revenue, has created a near-perfect environment for the promise of AI (artificial intelligence) and other emerging technologies to make an impact in 2020.

Tech on Tap for 2020

Here are five key tech-driven movements that are poised to reshape the landscape of debt collection in the year ahead:

AI Driven Customer Engagement:

Regardless of whether customers are first-time debtors or have experience with the process of repaying a debt, it’s imperative for businesses to maintain positive connections to their brand and preserve strong customer relationships. To do this, collection agents require deeper insight into how and where to engage customers for an optimal experience. This is where AI comes in.

AI enables collections agencies to track and learn each customer’s unique preferences, and then use those insights to form a well-rounded contact strategy that creates an experience with a higher likelihood of resolution.

Ring-Free Voicemail

For years, collections agencies have had to work around regulations that limit contact channels and how often they can call debtors. Now, agencies can leverage new software that places voice messages into a debtor’s voice mail – called voice alerts – without a ring. This effectively optimizes contact patterns to remain compliant with regulatory mandates, and also optimizes the number of overall contacts.

Not only is this technology beneficial for collections agencies, it’s also a welcome change for debtors. With a direct-drop message, debtors can respond when it’s convenient for them, versus potentially feeling ambushed by a phone call.

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Virtual Agents

Animated characters, or Avatars, are now sliding their way into borrowers’ email to win them over and nudge them toward a payment plan. And they’re working. According to BeGuided Inc., borrowers who engage with personable avatars are three times more likely to address their debts than those who visit traditional collections sites.

These virtual agents are often designed to speak multiple languages and consider the borrower’s credit score to suggest a sensible payment plan. An added bonus for consumers is the fact that virtual agents help them avoid the embarrassment of being contacted by real people and having to discuss their inability to pay their debts.

Speech Analytics

To help collections agencies manage the tone and flow of calls with debtors, state-of-the-art language-recognition software can now identify the emotional state of debtors and collections agents by tracking specific words, and then generate prompts to guide conversations back to a positive tone. These programs also enable collections center supervisors to monitor which calls are moving along smoothly, and those that may need further attention.

Gamification

The rise of gamification across numerous industries as a method for boosting engagement has caught the eye of collections agencies. Now, many have implemented gamified experiences to boost the performance of their agents. In essence, debtors become characters in video games that are structured to motivate call center agents with rewards for highest recoveries, fastest repayments, etc.

Technology advancements like these are poised to make a mark on the debt collections industry in 2020, and more are surely on the way in an industry that is ripe for reinvention. After all, improved experiences for customers and a better bottom line for collections agencies is the name of the game.

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About Activate Financial

At Activate Financial, our experience speaks for itself. As a fully licensed, national, third-party collections agency, we work across all time zones to provide custom outsourcing solutions for any company that is seeking effective and professional collections support with a high compliance profile. No matter the size of your business, we can tailor a solution to your industry debt collection, skip tracing needs. www.ActivateFinancial.com

Sources:

  • American Banker. Retrieved from https://www.americanbanker.com/opinion/tech-could-help-reinvent-debt-collection
  • Forbes. Retrieved from https://www.forbes.com/sites/robertszczerba/2017/04/26/which-industry-is-next-for-a-i-disruption-the-answer-might-surprise-you/#7c5280cc3f1c
  • Nerdwallet.com. Retrieved from https://www.nerdwallet.com/blog/finance/debt-collectors-go-high-tech
  • Wired. Retrieved from https://www.wired.com/story/silicon-valley-algorithms-for-debt-collection
  • PYMNTS.com. Retrieved from https://www.pymnts.com/news/artificial-intelligence/2018/ai-debt-collection-consumer-behavior-brighterion