Improving Debt Collection Practices with Artificial Intelligence

Debt collection remains as one of the top challenges for financial institutions to manage their business profitability and it remains a manually intensive task. Banks often offload this activity to third party debt collectors when they fail to collect on their own. It is estimated that there are more than 6,000 third party debt collectors operating in United States alone. Debt Collection is a multi-billion dollar industry and around 70 million customers in the last 12 months would have been contacted at least once by these debt collectors.

Challenges with Current Debt Collection Practices

To ensure fair debt collection practices by debt collectors, Federal Law has enacted Fair Debt Collection Practices Act (FDCPA) which says debt collectors are not allowed to use unfair practices to collect debt.

In spite of the above Act, as per Consumer Financial Protection Bureau (CFPB) report on debt collection experiences, the survey found that:

  • Over one-in-four consumers report threatening contact
  • Three-in-four consumers report that debt collectors did not honor a request to cease contact
  • More than half of consumers report incorrect contact for at least one debt
  • Over one-third of consumers report being contacted at inconvenient times

With regulation being not clear on how frequently consumers to be contacted, which channels of communication to be used, it creates a frustrating experience for borrowers and banks risks of permanently losing out customers.

Leveraging AI for Personalized and Fully Compliant Debt Collection Practices

With Banks sitting up with a pile of customer data such as consumer spending habits, consumer income, consumer’s preferred channel of engagement, banks can create hyper personalized debt collection plan.

Some of the key benefits of AI debt collection Assistant:

Consumer preference for bot interaction– Conversations around debt can be sensitive and customers are comfortable discussing their options with a bot rather than a human agent, without being conscious of whether they are being judged or not

Consistent Agent Performance– With our AI assistant the collection process is guided by automated workflows specified by your unique business rules. This leads to fewer disparities in performance.

Automated Invoice Reminders– You can ensure that your customers know exactly what they owe you and when the payment is due. Out AI assistant can communicate that to customers through voice or text reminders

Customized Plan: Customers can select a range of different debt payment plans customized based on customer payment history and savings.

Debt Collection Compliance– The workflow can be programmed to ensure it addresses compliance requirements in your country

Process Driven– The automated workflows you use are specified by your debt collection process and built according to your business rules

The AI assistant can predict the consumer’s reaction to communication frequency, timing, channel, and content. By reaching the consumer at the right time, over the right channel, AI debt collection assistant can improve your collection rates.

About is an award-winning out-of-the-box Intelligent Virtual Assistant(IVA) that acts as a “personal banking teller” to help customers 24×7 through every step of the journey from being a prospect to achieving financial wellness.

The solution can go live in less than 2 weeks and is proven in production with customers already witnessing over $50M+ ROI.

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