Blog > 5 Ways How AI Applications in Debt Collection Improve Conversion Rates
Bad debts are consistently increasing and collection rates are declining. The US alone has a billion dollar debt out of which more than 50% is outsourced to collection agencies. Debt collection is one of the biggest challenges financial institutions and banks have to address. Added to this are other challenges such as the hiring of expensive resources by collection agencies, an increase in customer complaints and a great risk of non-compliance.
AI applications in debt collection play a big role in easing out the process by reaching the consumer at the right time, through the right channel. Provided below are some of the ways on how applications of artificial intelligence can improve your debt collection rates and outreach strategy.
5 Ways AI Applications in Debt Collection Improve Conversion Rates
1. Improves the response rate of customers – Debt collection can be a sensitive topic for many customers. Customers are comfortable discussing their options with an AI Bot rather than a human agent, without being conscious of whether they are being judged or not.
2. Provides automated invoice reminders – An AI agent can communicate to the customers what they owe and payment due dates as a gentle reminder through voice or text messages.
3. Reduces expenditure on resources – There are 4,100 debt collection agencies employing nearly 450,000 people and spending a huge amount of money on their training. With our AI agent, there is a reduction in the spend and fewer disparities in performance.
4. Provides automated debt collection compliance – The workflow can be programmed to ensure it addresses compliance requirements in your country. The automated workflows you use are specified by your debt collection process and built according to your business rules.
5. Improves debt collection performance – An AI Bot can predict the consumer’s reaction to communication frequency, timing, channel, and content. AI in Banking can improve your collection rates as an AI Bot tracks real-time events of consumers such as email open rates, click through rates and browsing patterns.
AI applications in debt collection help financial institutions make better decisions specific to each customer and enable customization of outreach programs.
To know how you can leverage the applications of artificial intelligence to improve your debt collection process, download Payjo’s Intelligent Debt Collection Assistant Solution Brief.