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Chatbots in Debt Collections image shows illustration of a call centre agent on the left, a Webio chatbot on the right and a phone with text messages in the middle

Conversational AI in Debt Collections: Why It's Good for You and Your Customers


Traditionally, chasing customer to collect payments was a laborious task; endless dialling, letters and emails with the increasing number of attempts to try and get customers to simply talk to you was challenging enough, let alone getting them to pay.

The rise of messaging and messaging apps has seen a significant shift in how consumers want to interact not only with their friends but more importantly with companies.  And this has been a crucial shift for customer debt collections.  The need to continuously chase and endless calling to try and connect with customers about making a payment has gotten a lot easier. 

We are now living in a digital world and adopting a digital approach to debt collection and engaging with customers via digital conversations is becoming more and more mainstream. Yes, there are companies that are somewhat reluctant to take that step but, the industry is quickly evolving towards digitalisation, automation and AI and here are some things that you need to know:

Customers now expect a Chatbot
Customers are benefitting from the greater use of digital channels and expect technology to play a greater role in their lives.   The ‘State of the Connected Customer' report found that 58% of customers say emerging technologies like chatbots have changed their expectations of companies, with 54% saying that companies need to transform how they engage with them.  And this is especially true for millennials and GenZ. Digital is the only thing they know.

Self-Serve is a real thing in customer debt collections
Thanks to the messaging apps and chatbots, companies now have the ability to engage with customers in their preferred channels, deploying automated chatbots that have the capability to ‘self-learn and proactively engage with customers about their debts and give those who want to self-serve the ability to do so.  There’s a growing number of collections companies that have deployed or are looking to deploy a “No Agent Intervention” for specific customer collections journey types.   

More Customers are now ‘Talking’
Customers don’t want to talk to call centre agents about their debts.  That is a fact that millions of call centre agents can attest to. It is embarrassing, uncomfortable and customers in arrears will try to avoid it at all costs. But, with a digital conversation on a messaging app, the conversation is now a little easier.  Customers don’t have to hear the agents voice and can answer in their own time, with more consideration and in most cases, more honestly. 

The most impressive results of this automated collections Chatbot led engagement is that customers that have been unresponsive to all previous contact attempts are now engaging in a chatbot led messaging conversion.  Just think about that, customers who had been transferred to a ‘dead file’ and written off,  are now talking and even paying.  Why? because the awkwardness and embarrassment factor has been removed and they feel a little more in control of the interaction.

Blended Chatbot and Agent engagement is best
With the explosion of chatbots, many debt collection companies and teams dismissed their application in the whole area of debt collections, citing that full automation will never work.  And you know what, they are right. The “State of Service” research found that 80% of service decision-makers believe AI is most effective when deployed with — rather than in place of — humans. 

A one shoe fits all approach just won’t work, and we have seen this with our clients.  So, we would always recommend deploying a blended approach i.e. using chatbots for the lower value conversations and bringing in agents only when needed.

This strategy is showing real results with increased payment conversions, improved customer experience and a cut in operating costs.

Predicting conversation outcomes Is where the real value lies 

Adding in a little bit of magic with Machine Learning will round off a collection’s digital engagement strategy. Having the ability to predict the most likely outcome of conversations as they happen, route conversations and prioritises appropriately to manage each conversation is vital to effective collections conversations.

Imagine using the knowledge of customers’ behaviours  - i.e. have they paid in the past, how many times have they said ‘I lost my job today’, are they showing signs of vulnerability - to direct the conversation to the next best step to ensure that the conversation continues and is always moving towards a positive outcome. That is all possible with Machine Learning and is adding huge value to in-house debt collection teams and organisations

So, in short, just because the business of collecting debts it can be a difficult one and talking about money doesn’t come easy to all of us, don’t pass up the opportunity that technology can deliver.  Chatbots and AI are here to stay so the sooner you take those first steps and embrace this new world of engagement the more customers you will be talking to and collecting their payments.


Why Messaging and Chatbots in Credit and Collections

Are So Uniquely Powerful

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