Key Takeaways

• Conversational AI is shaking up debt collection and customer engagement.
• Customers prefer digital engagement, including chatbots, for sensitive topics like debt.
• A blend of AI chatbots and human agents works the best for customer interactions

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.

But now, conversational AI is transforming customer engagement in contact centres, making debt collection conversations less stressful and more customer-friendly.

Digital Transformation in Debt Collections

The shift to digital communication, particularly messaging apps, has dramatically changed customer expectations in debt collection. Consumers, especially millennials and Gen Zs, now anticipate businesses to engage digitally. 'Digital' is where they live. This evolution has made it easier for companies to connect with customers over sensitive issues like debt, reducing the need for persistent calling.

Chatbots: A New Customer Expectation

The majority of customers now expect digital channels, including chatbots, in their interactions with companies. Companies are finding that these emerging technologies have altered customer expectations, pushing businesses to innovate in customer engagement.

Self-Service in Debt Collection

Messaging apps and AI chatbots empower customers to self-manage their debts, offering a "No Agent Intervention" approach for specific customer journeys. This autonomy enhances customer satisfaction and efficiency in debt recovery.

Increased Customer Engagement

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 anonymity and flexibility of chatbot interactions encourage more open and honest communication, leading to increased engagement and even payment from previously unresponsive customers.

See: Why Do Customers Like Digital Channels for Communicating with Businesses?

Blended Chatbot and Human Agent Approach

While chatbots offer significant advantages, a combined approach with human agents is most effective. Incorporating both methods improves payment conversions, customer experience, and reduces operational costs. Experts recommend deploying a blended approach i.e. using chatbots for the lower value conversations and bringing in agents only when needed.

See: Why Contact Centre Agents Welcome AI and Automation

Leveraging AI with Intent Recognition

Adding in a little bit of magic with AI will round off a digital engagement strategy. Intent recognition and propensity guidance play an important role in predicting conversation outcomes, managing conversations efficiently, and guiding them towards positive results.

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’, 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. This technology greatly benefits debt collection strategies, enhancing the effectiveness of customer interactions.

See: A Look Under the Hood at the AI Tech that Powers Webio’s Conversational Customer Engagement

Embracing Conversational AI in Debt Collections

So, in short, just because the business of debt collection can be a difficult one, and talking about money doesn’t come easy to any of us, don’t pass up the opportunity that technology can deliver.  This technological shift is not just a trend but a staple in modern customer service strategies.