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Automated Debt Collection

Automate your Debt Collection: The Why and The How

Mark Opperman and Andy Turner

Empower your contact centre with digital debt collection

Talking with your customers about debt has never been easy, but recently there has been a shift in debt collection technology that changes the way you can engage with your customers. This change is for the better, both for companies and for their customers. 

If you’re a business having these difficult conversations, this shift is good news for you. With the technology that is now available, you can embrace a fresh way of communicating with your customers that is reaping great rewards, with upticks of 40% and more being seen in all the right metrics. 

This article pulls out the most important points from a webinar presented by Webio’s Mark Opperman and Andy Turner and hosted by Ann-Marie O’Grady. 

Why you Need to Modernise your Debt Collection Technology 

Let’s start with a stat: 90% of customers prefer being contacted via multichannel messaging apps (CX Today study). Here are six more compelling reasons to consider: 

1. Changing customer behaviour

Even before Covid isolation accelerated the use of messaging apps, people were quick to jump onto different channels to connect with each other. On the other hand, businesses have lagged behind and have been slow to switch over. While their customers are busy on digital messaging channels (WhatsApp, Viber, Messenger, etc.), many companies are still stuck with phones, diallers and one-way SMS's. 

If you want successful customer engagement, you need to connect with your customers on the channels they prefer. 

Being conversational is key to successful customer engagement 

As we know for ourselves, we don’t respond well to one-way commands but prefer empathetic messages that seek to understand our situation. So, by being conversational in your messaging, the response rate increases, and your customers are more receptive. (Read here for more on The Importance of Conversational SMS Messaging in Debt Collections) 

2. Mobile and digital are more empowering 

Speaking with your customers via a phone is not the best go-to method anymore. Especially with conversations around debt collection, your customers prefer to be contacted via two-way text messaging for these reasons: 

  • They feel more in control 
  • They can respond in their own time
  • Their think about their answers more carefully 
  • They are less likely to ignore the message 

3. Consumers are adopting new technologies and digital channels

In all areas, the tech landscape is continually changing and adoption is not a final arrival point. In the customer engagement space, businesses need to be future-proof to keep up and need to find the right tech partner to help. 

4. Competition and squeezed margins

Naturally, you don’t want to be outrun by the competition and the new players, so it’s key for you to stay up to date with the changes in debt collection technology. With all things considered, it’s not just a nice to have, but a need to have. 

5. Growth in automation

Automation software is a game-changer in debt recovery. Going digital allows you to automate debt collection across different channels, which means you can do more with fewer resources, which is in turn a cost-saver. It also allows you to be scalable, so when your business grows, your debt collection software simply scales-up.  

6. If it is easy... I'll use it

Your customers simply won’t engage with you if you don’t make it easy for them. Rather than have customers avoid you, tap into the powerful simplicity of conversational messaging to personally encourage them to act. 

How? Moving to Flexible, Conversational Customer Engagement 

As the collection technology develops, customer engagement is becoming more flexible and personalised to deliver a positive customer experience, quickly and at a low cost. 

Innovate to be competitive

Since we live in a tech-infused world, we need to be constantly thinking ahead. The level up from automated chatbots is to use the gathered data to predict the next steps - to understand a customer’s intent and their emotional state. This will inform how the bot proceeds with the conversation to make sure you get the right outcome. 

Data usage for personalisation

By using the data gathered from your customers, each different customer can have a different conversation. This method has been successfully used in retail for many years, and now in debt collection using personalisation is starting to see meaningful results. 

In conversation payment links

In a two-way conversational message, you can allow your customers to pay from a unique link that takes them to your preferred payment gateway. From 2019 to 2021, the use of this function increased by 61%. Ease-of-use is the secret to getting this to work making it powerful for the customer and effective for your business. 

Adopting a Customer First Approach  

The truth is, if you're using one-way command-based SMS's that tell people to do something, your method may need updating. This functional approach often makes your customers avoid answering their phones, which drives down engagement rates.  

A better way to get the job done is to listen to what they're saying and respond sympathetically. Businesses that change their messages accordingly see an uplift in collections.  

When it comes to collections, lenders with the best customer service tend to get paid first. For example, a customer might owe five bills, but can only pay three of them. If you engage in an understanding way, you are more likely be one of the three that gets paid.  And you will have gained a loyal advocate along the way. 

This wide-view approach is putting customer outcomes over payments. Using AI chatbots for automating collection conversations helps you to "program-in" a customer-first approach. 

Multichannel messaging 

For every business conversation on messaging channels, there are 38 personal conversations. So, it just makes sense for you to be talking to your customers on the channels they are most comfortable on. 

multichannel messaging

Businesses are seeing a 50% increase in collections when using SMS's rather than the phone.   

This is most effectively done using AI chatbots that lift the load off the agents, allowing each agent to deal with multiple two-way conversations at the same time.  

In a recent survey by TransUnion, they found that 44% of businesses are still using manual phoning and 30% automated diallers. The stats also reveal that engagement rates are three to five times higher when using text messages but only 20% are using text messaging. It's time for a change.  

Customer-first approach 

By focusing on meaningful customer relationships over payments, your customers become more willing to come to an agreement that suits both parties. 

Tech such as Natural Language Processing (NLP), AI chatbots, propensity modelling and the like can be used to automate these types of conversations in a blended model that has agents available to take over when needed. 

When you foster supportive relationships with your clients, you start to see feedback like these messages. (These are real messages.) 

“SMS is really better for me. Always scared to talk on the phone when in a situation like this.” 

“I must say it is easier to communicate this way as I am always at work which makes it difficult to talk  on the phone.” 

“I am sorry but I have been moved to a refuge and I am deaf and I couldn’t have anyone contact outsiders to sort out what I owe. I’m willing to set up a direct debit but I’ve noticed that I have a lot of charges since December.” 

Best Practise for Starting Automated Debt Collection 

This graphic shows how you can “power up” by building your customer engagement solutions from a core of traditional activities to more intuitive methods. 

automated debt collection

Tips on how to implement conversational AI software: 

  • Start with the simple and build from there. Don’t try to do it all at once. 
      
  • Work with a technology partner that understands your business and that you can trust. 
     
  • Think about AI in tandem with your AI strategy. The data you're capturing now can be used at the later levels. 
     
  • Develop an internal champion - someone who runs with the project and who understands your own business. 
     
  • Work on specific outcomes that are measurable. What are the metrics to measure? How do they change with the new tech?
     
  • De-risk your projects by slowly increasing the size of your customer groups. Build small pilot groups to start with and train the key people. 
      
  • Conduct regular reviews to make your processes better, to increase productivity, enhance customer experience, and to improve the conversational design. 
      

Conclusion  

Fully embrace digital multichannel messaging. Customers will change, so businesses need to change.  

How would you like to be engaged? Speaking with your customer as an individual with individual circumstances is a win for both you and your customer.  

Iteration, iteration, iteration You need to be constantly building together with a trusted tech partner. Your customer strategy will grow with time, with the right skill set and the right technology mix in place.  

Contact Us to learn how you can use automated conversational messaging to connect with your customers and significantly boost your debt collection efforts. 

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METRICS WE’VE ACHIEVED

52%
Uplift in Payment Arrangements
42%
Increase in Agent Productivity
57%
Decrease in Operational Costs
48%
Increase in Customer Engagement

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