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Naeem Abraham | 01 November, 2022

The new role of AI in debt collection and recovery

Modernization of the collections and recovery industry is moving at lightning-fast pace. Legislative changes have made companies rethink their processes, customer centricity has become a primary focus, and AI is more widely adopted. Major changes are being fueled by technology that shows no signs of slowing down.

AI alone gives collection and recovery teams the ability to adopt data-driven strategies at a record pace, resulting in better performance whilst enabling teams to effortlessly scale. But what exactly is AI, and how does it benefit collections and recovery teams?

What is AI?

Artificial intelligence (AI) is an advanced technology that can complete complex tasks which would normally require human intelligence. Through advanced analytics and machine learning capabilities, AI can use data to enhance and optimize processes to improve collections performance. Not only can AI make human-like decisions, but can often outperform human input in data-driven tasks – like deciding on the optimum collection strategy.

Debt collection teams are taking advantage of AI to construct win-win solutions for their customers. It instantaneously informs them of the best course of action, based on historic performance and customer profiling. As a result, collections teams are better able to provide solutions that resolve debt faster, and more efficiently.

What are the benefits of AI?

Improved collection and recovery performance

Collections and recovery teams manage a range of accounts, with different debt levels and unique circumstances. It’s the responsibility of these teams to personalize the experience to meet these specific and unique needs and help the customer regain financial wellbeing.

AI and machine learning determine the best route to maximize collection by looking at historical situations and results. It reviews prior communications, for example, with customers who have no previous debt history. Collections and recovery teams are able to use information gathered from these communications to identify patterns which become the basis of data-driven strategies which lead to increased performance.

Optimizing the solution process

The economic environment post-Covid has created a whole new category of people in debt, many of whom have never experienced this situation before. Collections teams need the ability to easily scale to meet this influx, whilst maintaining a level of service and empathy that the customer needs.

AI provides collections and recovery teams with tools to optimize the solution and strategy process. It gives them the ability to manage and process information faster, giving them the data and insights they need to create effective treatment plans for customers. Scaling capability enables teams to focus on customer communications and support first.

How can AI improve debt collection and recovery?

AI is becoming an essential part of collections and recovery, not only providing advanced data analytics and performing tasks faster than humans, but influencing strategic decisions that create processes that improve the experience for consumers managing distressed debt.

Debt Manager is an industry-leading recovery and collections platform that is innovative in thinking, technology and usability. It provides real-time analytic capabilities, helping organizations guide their customers through the process, increasing collection performance and improving the customer experience.

Have you successfully integrated AI into your collection and recovery processes? Contact us today to learn how we can help you build a more tailored experience for your customers’ individual needs.

 Naeem Abraham
About the author

Naeem Abraham

Naeem Abraham is leading the charge to implement our decision management tool: FitLogic. With prior experience at a top EMEA bank, Naeem’s expertise lies in credit management, data-driven decisioning, and utilizing AI/ML to improve collections performance.

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