Insights and Inspiration


What Technology Is Transforming Debt Collections

Debt Collection Software That's Transformational

Mark Oppermann | Chief Revenue & Marketing Director

There are more than 8m people in the UK struggling with some degree of problem debt, but altough this is difficult to bear, you cannot forget that debt collection plays an important role in business which is to ensure financial stability. Also, companies should not lose sight of the tough situation customers may find themselves in. Striking the balance between collecting the monies owed and treating customers with respect and empathy is a balance that can be hard to strike.

Debt collection complaints to the financial ombudsman are in decline, and with only 27% of complaints being upheld last year, which is good news for the industry.  A closer inspection of debt collection complaints can give a better understanding of the exact nature of the issues:

  • Wrong amount collected
  • Debt amount not verified
  • Debt already paid
  • Debt not owned

On the face of it, these complaints are more clarification issues rather than issues regarding how collections teams go about collecting the debt. They can be traced back to failures in process, automation, and access to real-time data.

So how can companies reduce the unnecessary chasing of customers that only serve to taint the collections process from a customer’s point of view?

Well the good news is that cloud-based debt collection software is playing an important role and it is fast becoming the happy bedfellow of the debt collections process. Not only is it more accessible but it is more affordable. And there are many use cases where technology has not only enhanced the collections process but left customers feeling more positive about their engagement.

Every day, debt collection software is being used to improve customer experience while also enabling collections teams and organisations to work smarter, improve their performance, cashflow and ultimately the bottom-line.

So, what debt collection software and technology is being used in collections and what difference it is making?

Mobile Messaging Apps and SMS

Messaging is absolutely where it is at and its future is only getting brighter and brighter. Messaging apps have permeated the market. WhatsApp currently being the most popular, with about 2 billion monthly active users and OTT applications are expected to grow 33% over the next five years. Similarly SMS messaging is a perfect fit for customer engagement, especially for debt collections as it is a less intrusive form of communication and gives customers an opportunity to engage privately and on their terms.

Conversation Automation and AI Chatbots

Process automation in debt collection is not a new phenomenon.  Activities that are manually done by humans can be replaced by an automated process. The dialler was the initial customer engagement automation technology, but with the onset of messaging, diallers are being relegated and digital messaging is becoming the primary strategy for customer communications.

But in recent times, there is a growing trend in automating customer conversations using AI chatbots.  And we are only seeing the tip of the iceberg in the potential for automated bots to transform how collections companies procure payments. Conversation automation at its simplest involves creating and deploying bots to reach out to customers, start the conversation and fulfil the most basic elements of the conversation and then pass to an agent to complete. But the power of automation cannot be denied and more and more collections teams are using conversation automation in innovative ways.

Artificial Intelligence and Machine Learning

AI has arrived and is here it stay and it has proven to be extremely useful to the debt collection process. The beauty of AI and machine learning is that conversational AI chatbots/virtual assistants can be trained so the complexity of the engagement can evolve.

Predictive analysis can be used to predict that likelihood of a customer missing a payment, making payment, or even identifying vulnerable customers and determining the best way to manage the conversation. In addition, analysis can show at what times and which channels are best to contact customers about their amount owing which saves time and ensures that resources are better placed to increase the probability of securing payments.

So debt collection software and technology are playing a vital role in collecting customer payments and it will continue to do so.Used at the right time, in the right way it is guaranteed to deliver success, not only for the business, but for the customer.

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