Blog > Humanize Debt Collection with an AI Banking Chatbot
Ever heard of El Cobrador del Frac? They were ‘debt collectors in top hats and tails’ – literally!
At the height of a financial crisis (such as the one in 2008), debts are on the rise and collection rates are low. Banks and debt collection agencies resort to many approaches. One of the extreme approaches was used by a debt collection agency, El Cobrador del Frac in Spain. They devised an aggressive strategy to intimidate debtors to pay their debts. Such forceful tactics seem to be counter-productive.
Intimidation and force no longer help to improve debt collection rates. Instead, utilizing technology to understand the psychology of debtors and debt collection will help in creating customer-centric debt collection and outreach strategies.
Today, banking professionals are using advanced technology such as an AI platform and a banking chatbot to build debtor profiles, design customer-friendly interfaces and provide exceptional customer experience. Using machine learning, deep learning, natural language processing, and behavioral engineering, banking technology has evolved to identify repayment solutions that resonate with the debtors’ psyche.
In the world today, a majority of the population live beyond their means. According to the Federal Reserve, in the 1st quarter of 2018, the debts of an average American household has approximately reached $13.2 trillion! That’s an increase of $63 billion from the previous quarter!
While debts are increasing, debt collection has become a challenge. With the stigma associated with debt and the shame associated with financial troubles, debt problems are not something people are comfortable speaking about. Moreover, based on past experiences, debt collectors are stereotyped as hustlers or shady characters. Technology plays an important role in bridging the gap between debtors and debt collectors. For instance, a banking chatbot has become a preferred personal financial banker. They can assist debtors with their financial needs without bias, factually, accurately and efficiently.
Technology has changed the way debtors and debt collection agents can interact and communicate. In this digitally-empowered world, debtors prefer interacting with bots due to several reasons, some of which include:
• Convenient usability – Compared to traditional channels of communication, a banking chatbot is easy to use and access. Debtors don’t need to download an app, fill up a form, spend time on a phone call or visit a bank branch, they can instantly chat or message to interact with the bot.
• Intuitive, conversational and natural interface – Today’s digitally-empowered customers are averse to phone conversations, especially when it revolves around sensitive subjects such as debt collection. They prefer chatting or messaging which is a less intimidating communication channel. An AI banking chatbot offers not only speed of customer service, it is intuitive and intelligent too. It learns through past experience using machine learning and improves personalization and provides a conversational and natural interface.
• Absence of cognitive bias – A banking chatbot when interacting with a debtor does not exhibit any bias, unlike human debt collectors who unintentionally posses a tone of judgment. Given that a banking chatbot can assist a debtor accurately and factually, alleviates the stigma associated with debt.
• Instant understanding of a debtor’s portfolio – To help debtors make informed decisions about repayments, an AI banking chatbot has the ability to create a comprehensive debtor profile and provide recommendations in real-time.
• Omnichannel experience – With many communication channels used by debtors, AI in banking has enabled providing an omnichannel experience. Should a debtor want to shift between channels such as from a chatbot, to the website or phone messaging app or to a human debt collection agent, they can seamless interact without disruption and flow of information. A friction-less experience in stressful situations such as debt collection helps to efficiently focus on the resolution of problems and repayment solutions.
• Stress-free neutralization of tense situations – A banking chatbot remains impassive to stress. While it recognizes the need for a solution, it is not affected by the pressure of the situation like human agents are. With logical reasoning and deep learning, a banking chatbot can neutralize stressful situations which could otherwise escalate to complex issues.
Debt collection is a sensitive subject, and a neutral stance would be an ideal approach. Banking technology (such as a banking chatbot) uses machine learning, behavioral engineering, and deep learning to humanize the debt collection process.
AI in banking empowers you to address challenges such as low debt collection rates and ineffective outreach strategies. An AI-powered Debt Collection Assistant enables you to personalize your outreach program, implement effective debt collection strategies and improve the customer experience of debtors.
Let your debt collection strategy resonate to your debtor’s psyche.
Personalize your outreach programs using AI banking technology
Empower debt collectors to have a more meaningful relationship with their debtors.
Use a banking chatbot to humanize the debt collection experience!