The Potential of AI in Collections

As internet knocked on the door, snail mail faded out of customer’s lives. But then, with ecommerce, it was reborn with a boost to the delivery system for products instead of mails. With time and given the right technology, processes and systems evolve to drive improved efficiencies and create a better experience for everyone. Sometimes, this technology-driven evolution can also change the role of the employees and mold the purpose of the service or product a bit.

And a technology like AI is helping businesses evolve every day by leveraging heaps of data that this digital era already has. AI is doing more than just improving efficiency. It is helping businesses fulfill their missions better by providing actionable data-driven insights. There are many industries that are struggling today because they aren’t leveraging their data. The collections industry is one of them.

With the amount of data generated and waiting to be harnessed, is it wise and in the best interest of collectors to stay old school? Studies show by 2020 businesses with data-insights-driven teams will grab $1.2 trillion from peers without that culture.

Artificial intelligence is the final frontier in technological advancement because it allows self-learning and independent evolution leading to simple, creative solutions that cut through the white noise. 30% of companies worldwide will be using AI in at least one of their sales processes by 2020.

Mapping AI to collections challenges

An average US household today has $5700 of credit card debt. The increasing debt holds multiple opportunities for growth, but with data left unharnessed, collections aren’t coming in.

One of the biggest challenges collectors face today is the changing demographics. With more millenials and less baby boomers, traditional methods that worked a decade ago have become outdated. The industry now faces a digitally aware end user that expects convenience, effortlessness, and personalization. There is a genuine potential for these users to become recurring customers.

AI drives customer-centric collections

With a large portion of customers being first-time debtors, it is important to maintain goodwill and preserve relationships. Customers today seek authentic connections with brands. And for a better experience, collection agents must have insight into how and when to engage with whom and through which medium. Personalized interaction isn’t limited to just knowing their names, it involves knowing and understanding their preferences such payment medium or communication channel.

AI can leverage data from both traditional and digital sources to provide a complete contact and treatment strategy so that the experience is effortless and personalized for customers. Artificial intelligence can enable improved, customer-centric collections.

At Dasceq, we leverage artificial intelligence, consumer 360, in depth collection journeys with continuous testing to enable continuous learning and optimize contact & treatment strategy while learning from successful collections trends. Our next-gen, AI-driven SaaS platform provides actionable insights to boost collection efficiency by 30%, improve $$ collected by 12%+ and improve consumer experience.

AI helps collectors maintain compliance

2018 was a dismal year with complaints consistently rising. Lack of actionable data leads to blocked calls and unread mails. With newer, more stringent laws for privacy and fair collection practices being drafted, there is more clarity on legal statutes. If this catches up, it could set the tone for federal legislation, offering more scope for litigation.

This means it’s absolutely important to stay compliant or collectors will have to face charges. AI offers automated reminders and follow ups, which help in compliance, because these cannot go in after hours or multiple times a day. AI also optimizes the contact strategy enabling collection agents to never have to resort to aggressive methods which fall in the grey areas of compliance. Further, AI can enable self-service options such as chatbots which let customers reach out at their convenience, eliminating the hassle of compliance further.

AI platforms can analyse and unify collections data

AI-driven platforms can use unique variables to deepen consumer behavior, and build a 360-degree view of your customer, aggregating data from both traditional and digital sources including social profiles, credit data, bank data, and customer interactions data, etc. Segmenting the population based on consumer behaviour, followed by prioritizing accounts and devising strategies specific for each target group; allows for tailored recommendations.

With the volume of data generated, AI can help you stay on top of it by compiling it on to a single platform, with differential access and visibility. This begins by collecting verified customer data and establishing a data sharing loop. This allows ease of data transfer, making it simple to update the information as and when needed.

AI increases efficiency

With minimal manual processing, invoices are system generated making it much less error prone. Information is mapped to the right person and account, there are no duplicate accounts and the follow up is automated, saving money, effort and time that can now be spent working on collections strategy. With optimized strategy and improved efficiencies, operational costs are reduced and more collections happen, faster.

Not being able to follow up or respond to queries on time can leave a negative impact. Using AI chatbots helps in prompt responses, faster and easier resolutions for frequently posed queries. In case of more subjective or complicated queries, the call can be transferred to an agent.

Addressing Key Challenges before the Collections Industry Today

The bottomline

Collections management should be an efficient, customer-centric process that increases potentially converts first time and difficult debtors into recurring, loyal customers. AI helps achieve personalization in the age of customer where engagement happens only with relevant and contextual information. In leveraging AI, ML, and Big Data for the collections industry, it is important to build a comprehensive, robust platform that integrates seamlessly with all data sources to create new efficiencies and enable continuous improvement.

With our years of research and collection industry expertise, we have built a next-gen, AI-driven SaaS platform to identify the right consumer behaviors; and hence, optimize collection efforts in the right direction at appropriate time using the best channels. Feel free to reach out to us for a quick demo of the platform or if you have any questions.