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Get Ready for the Chatbot Collections Agent

U.S. lenders believe consumer debt collections will be digitally transformed in the next two years,…

  • June 14, 2019

U.S. lenders believe consumer debt collections will be digitally transformed in the next two years, according to new research from analytics company FICO and research and advisory firm Aite Group.

Specifically, a large majority (86%) of consumer lenders believe that machine learning and AI technologies may be useful at many stages of the credit lifecycle.

Some applications of machine learning and AI mentioned by collection executives include:

  • Improving collectors’ understanding of optimal times and channels to contact delinquent borrowers
  • Assigning the right type of agent for the right type of activity or contact
  • Identifying early warning signs of distress in not-yet-delinquent accounts
  • AI enabled chatbots to engage lower-risk customers

According to the report, debt collectors increasingly want to understand how to better engage with their customers by delivering personalized communications.

By leveraging data-driven communications platforms, lenders can improve customer communication by better understanding customer preferences and use this within the context of their broader relationship with the financial institution.

By having the insights into what messages resonate with which customers over certain channels, lenders can vastly improve customer relationships which leads to improved collection rates on delinquent accounts.

For institutions that have traditionally managed collections at the branch level, part of this transformation has included centralizing some collection functions, particularly for those accounts that are high-risk, highly, or burdensome from a compliance perspective.