Everything you need to know about AI Automated Debt Collection

While asking customers to pay overdue for their debts has always been a challenge for businesses. And in today’s fast paced world, customers demand flexibility and accessibility to pay their debts, this leads to an increased number of late payments and ignorance.  

Checkout how a Gen AI powered Voicebot can automate debt collection operations.

Late debt payments can severely affect the liquidity of several firms, forcing some firms to exit the market. To tackle this problem, AI automation has been implemented for a few years now and AI has disrupted the debt collection process. 

Even though AI automated debt collection systems are essential for businesses, do they replace human debt collectors?  

Let’s find out…  

What is a Debt Collection System?

A debt collection system is designed to streamline and automate the process of collecting outstanding debts owed to a business or organization.  

While the human debt collection process is proved effective in collecting outstanding invoices from debtors, the strategies implemented are outdated and complex.  Ideally, debt collection processes must be customer-oriented and a lot less painful to the collection agencies.  

AI Automated debt collection can exactly do that. 

Role of AI in Automated Debt Collection System 

AI is enabling companies to use advanced analytics, behavioral science, and machine to seamlessly automate their debt collection strategy. Automated debt collection can maximize debt recovery and optimizes Account Receivable management. 

Automated debt collection is powered by multi-lingual and multi-modal AI agents, enabling seamless communication across voice, chat, text, and email supporting more than 150+ languages. Available 24/7, it enables a self-service option to customers, empowering customers to resolve issues independently while managing high volumes of interactions with precision and efficiency. Customers never have to wait for assistance, and businesses can ensure a smooth, responsive experience across all channels. It can also seamlessly automate PTP & RPC.

Beyond self-service, automated debt collection also involves enhancing collector and agent productivity via AI Agents which act as AI-powered co-pilot or real time AI Agent Assist. It streamlines workflows with conversational workflows, real-time nudges, decision trees, sentiment analysis, and RAG-powered knowledgebase optimization, call summarization, ensures compliance through Auto QC & QA checklists, and flags unprofessional agent behaviors, helping businesses maintain high standards of customer service and regulatory adherence

In this blog, we’ll explore how you can make use of an AI automated debt collection system and seamlessly implement it for your business thus encouraging your customers to pay on time, increasing cash flow, and less losses.  

By introducing AI into your existing debt collection system, you can ease the process of debt collection resulting in higher revenues and reduced operational costs.  

Check what Greg Johnson, Chief Technology Officer from InterProse has to say about LEXI - Floatbot's Collections AI Agent.

AI in Automated Debt Collection Process 

Step 1: Launch voicebot/chatbot with an easy-to-use no-code platform – Floatbot.AI 

Step 2: Run campaigns for debt collection by providing details of customers such as due amount, due date, etc. 

Step 3: AI Bot connects with customers and tries to take inputs on the issues they are facing for debt payments and reminds them to pay asap. 

Step 4: The bot sends timely reminders to the customers and ensures the payments are done on time. 

Step 5: Engages debtors through communication channels like Email, Text, and WhatsApp 

How does AI personalize the debt collection process? 

• Understands the requirements of your borrower.  
• Streamlines an end-to-end collection process.  
• Personalizes the approach based on customer behavior.  
• Recovers loans without spending much on resources and infrastructure.  

Benefits of Conversational AI in Debt Collection

• Payment gateways and communications with customers can be integrated.   
• Enhance the borrower experience with personalized outreach strategies.  
• Automate repetitive tasks, giving your agents the flexibility to prioritize other functions that require human sensitivity.   
• Lenders can instantly see an improvement in ROI.  
• Increased speed and efficiency to collect debts faster and reduce the risk of bad debt.  
• Get detailed reports on the collection process, including the number of reminders sent, the number of debts collected, and the overall success rate.   
• Monitor the progress of debt collection activities and identify areas for improvement.  

We're overcoming one challenge using AI: Debtor's Experience  

And this particular factor is crucial; to make your customers choose your service over others.  

Deliver personalized and empathetic communications with the right payment option at the right time and channel using Gen AI.  

Yes, there’s so much more than AI in automating debt collections and enhancing the overall experience of your customers.  

Generative AI to Automate Debt Collection

As per industry reports, “the use of generative AI has increased debt recoveries by 65%. A Gartner study also suggests that call centers globally can save as much as 80 billion dollars in revenue by 2026 using generative AI.“  

How Does Gen AI Work in Automating Debt Collection?

Gen AI empowers debt collectors with automated, intelligent, and effective consumer conversations at scale.  

Let’s see how a Conversational and Generative AI impacts your collections’ efficiency and revenue.  

Classification of Borrowers 

Using data-driven ML solutions, Gen AI provides insights into customer behavior, and history and helps lenders build borrower profiles to predict who resolves delinquencies and who needs an alternative approach. This practice strategically reduces revenue losses.  

Personalizing Customer Experience 

Reach out to the debtors on their preferred platforms such as email, voice call, or text by following an omnichannel approach to optimize the impact of the collection process. 

Predicting Default Probability 

Gen AI with the power of Artificial Intelligence (AI), Machine Learning (ML) and Natural Language Processing (NLP) analyzes structured and unstructured data in real-time to predict the defaulters. Lenders can create recovery plans and monitor borrowers -- likely to default.  

Determining an Effective Compliance Strategy 

Collection agents can also identify the right time and right medium of communication, which results in a faster response rate and improved collection rates.  

AI Debt Collection Chatbot and Voicebot 

Conversations with human agents might lead to discomfort for your customers whereas AI-powered bots gather information about the debtor’s payment history, their preferred modes of communication, and importantly their intent to pay.  

How Do Chatbot or Voicebot Function in Debt Collection Agencies ?

• AI bot collects essential information like outstanding amount, customer name, place of residence, and past conversations -- which means does the customer fall under regular debtor or irregular debtor.  
• And then these bots feed on this information.   
• It then processes all of this information to come up with the flow of conversations that enable the customer to take action.  

These AI-enabled voicebots/chatbots are capable of interpreting the purpose of customer inquiries and responding accordingly.  

These automated bots share reminders regarding upcoming and overdue payments without human intervention.  

Voicebots and chatbots can handle multiple queries simultaneously.   

You can also build automated workflows that can trigger automatic conversations along with personalized payment links so that the debtor can complete the payment at a convenient time.  

This process is extremely beneficial for both debt collection agencies as well as borrowers.  

As it:  

• Saves time  
• Increases efficiency  
• Lowers costs  
• Provides round-the-clock assistance  
• Reduced additional costs of hiring & training  

Also, customers can engage anytime, anywhere.

How to Make Use of Conversational AI in Debt Collection?

1. Automate debt collection via chat/voice  
2. Automate reminders on the due amount  
3. Flexible payment processing  
4. Personalize the customer experience  
5. Collect reviews and feedback  

LLM agent tools like ChatGPT, Google PaLM, and Agent M can be trained and automated to interact with defaulters and send reminders about outstanding payments. They can be used to personalize the customer experience by communicating with the debtors' preferred channels.   

If you’re a debt collection agency looking to acquire new customers, automate the debt collection process and get rid of manual traditional processes.  

Here’s how you can get started with building a chatbot/voicebot to collect the debt.  

Let’s understand Floatbot’s human-like debt collection using chatbot/voicebot.  

Automating Debt Collection with Floatbot

Floatbot is a low-code, conversational AI platform that helps businesses to build Chatbots and Voicebots.  

With Floatbot, you can deploy chatbot/voicebot to  

1. Automate debt collection 
2. Automate payment negotiation 
3. Switch from voicebot to chatbot 
4. Collect debt payments through WhatsApp/SMS/Text 
5. Automate disposition 

Communicate in multiple languages and reach every customer around the globe, in a friendly and human-like approach.   

Automate hundreds of calls at once and transfer call; when an agent intervention is required.   

Also enable multi-channel support and reach customers on their preferred platform thus ensuring a positive customer experience and engagement.  

If you’re wondering about the hidden costs involved in automating debt collection process. You don’t have to, simply sign up on Floatbot’s website and you’ll be ready to build, launch and deploy AI automated debt collection bot within few clicks.  

In Conclusion 

While the processes in AI automated debt collection system seem out of the world and can put behind your collection agents, there is still a need for human approach when complexities arise.   

Hence, a mixed approach that effectively encourages AI automated debt collection and human interaction -- leads to healthy and positive relationship between you and your customers.  

Get started with a free trial and empower your agency with automated debt collection using AI, ML and NLP.