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Why Chatbots and Automation Work for Debt Collection

Mark Oppermann | Head of Sales and Marketing
Debt collection technology in the UK has changed dramatically. The covid pandemic certainly had quite an impact, but overall, people’s online behaviours have changed, especially when it comes to how they handle their finances.
 
Instant gratification has become the norm. That’s why chatbots and automation are working so well in the financial industry. According to Chatbots Magazine, bank systems will automate up to 90% of customer interactions using chatbots by the end of 2022. And the popularity of chatbots has trickled down to the collections industry as well.

Here are the three main reasons that chatbots and automation work well for debt collection.

1. Chatbots and automation work for debt collection because customers prefer the process to live agents

It’s embarrassing to owe money and not be able to pay it back. That’s just human nature. When a person gets a call from a debt collector, it’s an uncomfortable situation for both parties. That’s why so many people would rather use a chatbot than speak to a live agent. That’s why so many customers would rather use a messaging channel to discuss their financial situation. And the beauty of messaging channels is that they really work well with chatbots and automation.
 
Chatbots and automation facilitate the customer engagement process by making it more efficient and personal. By using customer data and bringing it into conversations, customers can have their questions answered in real-time. And if a human agent is required, the transfer is seamless with the complete conversation history accessible to the agent. 
 
Chatbots make these difficult conversations easier. An automated collections bot is impersonal and non-judgemental. Therefore, the embarrassment factor is reduced.

Convenience is another reason people prefer chatbots to live agents. Chatbots are available 24/7. This gives debtors the flexibility to manage their payments whenever it’s convenient for them, as opposed to being interrupted at work by embarrassing calls from debt collectors.
 
Perhaps the biggest factor in the rise of chatbot popularity is the fact that most people - especially younger generations - prefer texting and chat applications as opposed to phone calls. They don’t want to deal with long wait times in order to speak with a customer representative. Chatbots provide the instant gratification that consumers have come to expect in all aspects of their lives.
 
 

2. Chatbots and automation work for debt collection because they save time and money.

One of the main benefits chatbots provide to consumers is time-savings. In fact, in a 2019 survey by Usabilla, 54% of respondents said they would choose a chatbot over a live agent every single time if it saved them 10 minutes.
 
People are reluctant to spend time doing things that cause them high levels of stress. This is why they procrastinate, especially when it comes to financial issues. Chatbot automation makes it quick and easy for debtors to make payment arrangements in a non-confrontational, low-stress environment. In this case, the saving of time can actually equal money.
 
Not only do automated chatbots save debtors time, but they also help debt collection agencies save time and money as well. This was especially relevant during the pandemic, when many companies saw a reduction in their workforce thanks to the “great resignation.” With fewer agents available to handle calls, chatbots were able to fill in the gap. The addition of artificial intelligence to chat technology has improved the entire collections process, reducing the time required of agents while increasing the success of collections efforts as a whole.


3. Chatbots and automation work for debt collection because they’re able to increase engagement through personalization.

Increasing customer engagement in the debt collection process is key. Automated chatbots are successful because they are able to personalise messaging and deliver those messages at the exact right moment. This process leads to higher engagement, which in turn leads to higher open rates and payments.
 
During an automated chat session, AI-enhanced chatbots can gather information about a customer’s demeanour, state-of-mind, intention, and more. This data is then used to engage the customer with a prompt that is most likely to result in a desired outcome. The whole experience is more positive for the customer and encourages them to keep up with future payments.
 
Webio’s own research into customer engagement rates has found that automated chat technology and digital messaging efforts outperform diallers by 3x as much. Plus, over 60% of all our customer conversations have been completed over digital channels.


Conclusion

The success of chatbots and automation in the collections industry can really be credited to the increased customer service and engagement provided by the debt collection technology itself. Anytime you can make a difficult collections conversation easier, you increase the probability of a favourable outcome, for all involved.
 
Want to achieve better customer conversation outcomes? Consider using AI to automate and blend chatbot and call centre technology. We can show you how. Contact us today!

 

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Webio, The Conversational Middleware Company™ brings true AI driven customer conversations to the enterprise. Webio's channel agnostic conversational AI  platform uses the power of AI driven chatbots, machine learning and NLP to introduce a 'blended AI' approach to customer engagement that lets AI agents work alongside human agents to seamlessly engage with customers.

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