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How Auto Finance Companies Can Collect End-to-End Without Any Agent Intervention

The current economic volatility is affecting auto finance companies directly, and so are inflation and other consumer behavioral trends, making it a genuinely complex space to be in.

Tracking the Fitch Ratings on Subprime Auto ABS (Asset Backed Security) provides a better understanding of the circumstances in 2024:

  • Subprime auto delinquency rose to 6.39% in February, the highest in the decade.
  • The industry usually expects a recovery in March and April due to tax refunds. Delinquency rates did drop to 5.23% in April.
  • Even with this drop, the delinquency trends are the highest in the last decade. The recovery rates were the second worst, second only to the April 2020 rates.

With the auto finance industry expected to grow at a 7% CAGR, controlling delinquencies in a less affordable market troubled by high inflation rates is a challenge.

In addition to these macroeconomic stresses, auto finance companies face an acute skilled labor shortage. This cumulative effect has made auto finance companies scout for automation solutions that can solve their challenges on all fronts.

Relying solely on traditional collection strategies is not enough in this current landscape. Adopting innovative technological solutions has become a necessity. Before Conversational AI, no tech had the capability to automate collections and customer support calls without the need for agent intervention. 

How Omnichannel Conversational AI Can Empower an Auto Finance Company with Automation

Omnichannel communication is a critical component of automating collections through AI. Omnichannel communication refers to using multiple channels, such as email, SMS, phone calls, and webchat, for collection agencies to engage with customers. By utilizing multiple channels, AI-driven systems can effectively reach customers, providing convenient avenues for them to address and resolve their delinquencies. 

This approach caters to consumer preferences by offering a range of communication options, ensuring that each customer can engage using their preferred channel. Furthermore, this strategy is context-based, meaning they can seamlessly switch between channels without losing the context of their previous interactions.

Conversational AI for Inbound Communications 

Inbound communications are a gold mine for collections. Customers often reach out with various inquiries, frequently seeking help to make a payment or process their transaction.

Without Conversational AI: Most auto finance collection processes depend on agents to handle inbound customer inquiries. However, if customers attempt to reach your business during off-hours or on weekends and holidays, they often can’t get connected with an agent, leading to missed payment opportunities. Moreover, maintaining a well-trained team of agents amid rising attrition makes it increasingly challenging to provide reliable inbound support, making it harder for customers to simply make their payments.

With Conversational AI: All inbound communications are seamlessly managed. Every call is answered, every SMS and email receives a reply, and no payment opportunity is missed. It can also schedule follow-ups and calls for later if requested or needed.

Conversational AI’s Impact:

  • Better collections as willing consumers have access to easy payment options
  • Better disposition and intent capture 
  • Improvements in CSAT scores
  • Better customer experience as financiers can listen to and record every customer query.

Conversational AI for Outbound Outreach

Conversational AI revolutionizes customer outreach by automating end-to-end collections, allowing auto finance companies to efficiently scale their operations. 

Without Conversational AI: Traditionally, reaching out to customers involved significant manual effort, with agents making individual calls and sending messages. 

With Conversational AI: Collections are streamlined, enabling thousands of calls to be placed and SMS or emails to be sent within minutes. This not only saves time but also ensures that outreach efforts are consistent, widespread, and personalized, significantly improving scalability and operational efficiency.

Automated Outreach for Better Auto Finance Collections

Omnichannel Outreach for Maximum Engagement

Today’s customers—especially those from Gen Z—prefer to interact across various communication channels. They are no longer limited to a single mode of communication like phone calls; instead, they expect to be reached via SMS, email, or other digital platforms. Conversational AI excels in this area by facilitating omnichannel outreach, ensuring communication is tailored to each customer’s preferred method. By engaging customers where they are most active, auto finance companies can achieve higher response rates and better engagement.

Seamlessly Consistent Communication

A key advantage of using Conversational AI for outreach is its ability to integrate and never lose the context of communications across all channels. Whether a customer responds via email, SMS, or phone, the AI ensures that all interactions are a part of a unified communication strategy. This prevents any communication gaps or inconsistencies, providing customers with a smooth and coherent experience.

End-to-End Collections without Agent Intervention

Conversational AI can establish right-party contact, capture promise-to-pay (PTP), and facilitate on-call payment collection without needing any agent intervention until asked for or during any complex situation. Customers can easily make payments using a card-on-file or through a secure text-based payment link, streamlining the payment process. This approach can also lead to faster collections without compromising the customer experience, ensuring that payments are collected promptly while maintaining a positive relationship with the customer.

Facilitating Negotiations and Payment Plans

Conversational AI is not just about collecting payments—it can also handle more complex interactions, such as negotiating payment terms and setting up customized payment plans. For customers facing financial difficulties, the AI can offer flexible solutions that align with their current situation, such as extended payment deadlines or installment plans.

Automated Payment Reminders

Conversational AI can automatically send payment reminders via SMS or other channels to further enhance the payment collection process. These reminders can be scheduled at optimal times to ensure they are received when the customer is most likely to take action. By proactively reminding customers of upcoming or overdue payments, the AI reduces the likelihood of missed payments and improves overall collection rates. This feature is especially useful in maintaining regular cash flow and ensuring customers remain on track with payment obligations.

Impact of Conversational AI

Conclusion

Omnichannel Conversational AI offers auto finance companies a powerful tool to automate and optimize their collections process. By integrating multiple communication channels and leveraging AI-driven technology, companies can enhance customer engagement, streamline operations, and achieve faster debt recovery without sacrificing customer experience. 

Whether it’s managing inbound communications, automating outreach, facilitating negotiations, or sending timely payment reminders, conversational AI provides a comprehensive solution that drives better outcomes. As the auto finance industry evolves, embracing this technology will be key to staying competitive, improving profitability, and building stronger, more responsive customer relationships.


Are you interested in learning more about how Conversational AI can improve your collections strategy? Book a demo to schedule an appointment with one of our experts!

Boost Your Collection Strategy with AI-powered SMS and Email Automation

For Canadian debt collection agencies and financial services organizations handling collections, consumer outreach has always been a multilayered challenge. Because of resource limitations, shrinking margins, and the difficult ecosystem of consumer collections, it’s not easy to reach debtors, with account penetration, right-party contact, and payment recovery being some of the hurdles faced by collectors.

Two solutions to these challenges: diversifying your communication and contact methods and leveraging top-tier technology. The rise of Conversational AI and GenAI-enabled, automated messaging via SMS and email is opening new and efficient channels for communication with consumers, which can significantly boost debt collection operations.

Thanks to the recent advancement in Generative AI, text messaging and email automation solutions can now handle two-way, multi-turn, intelligent conversations with consumers, all while complying with provincial regulations on contact timings and frequency.

In this article, we’ll outline the immense potential that text message and email automation using Conversational AI has for ROI in your journey to contact center automation.

Conversational AI: A Game Changer for Debt Collection Across North America

Conversational AI is enabling debt collection operations to be more adaptive, consumer-friendly, and efficient. This technology relies on natural language processing to understand and respond to consumer inquiries, making the process more conversational and less transactional.

Debt collection agencies across North America have already been relying on Voice AI to automate both inbound and outbound collection calls, delivering impressive results. Now, leaders in the industry are offering additional self-service channels to consumers, so that everyone can utilize the channels they prefer. One of them is text messaging automation with AI.

Why It’s Good To Offer Email and SMS Communications to Consumers

  • Text messages have a remarkably high open rate, estimated to be between 80-99%.
  • 90% of text messages are opened within the first 3 minutes of receipt
  • Click-through rates with SMS (i.e., clicks on links within the SMS) can vary greatly, but they’re estimated to be somewhere between 15-30%.

Every consumer is different; our research shows that different demographics prefer to engage through different channels.

Here’s why email is an important channel to use to engage with consumers:

  • Email communications are a good alternative to print letters, as they are more cost-effective and reach consumers faster.
  • Email improves documentation, helping with compliance matters.
  • Email provides metrics such as open rates and click rates, allowing you to better understand consumer responsiveness, which would not be possible with print letters.
  • Electronic records help you integrate metrics with other channels of communication to better understand consumer behavior and preferences.

How AI-powered Text Messaging Fits into Your Recovery Strategy

When applied to text message automation, Conversational AI allows debt collection agencies to:

  • Engage consumers on their smartphones, enabling flexible response times and methods.
  • Conduct intelligent, two-way SMS conversations regarding outstanding debt and resolution options.
  • Alleviate live collectors from routine communication tasks.
  • Share time-sensitive information like payment reminders, settlement offers, and deadline alerts in real-time.
  • Offer 24/7 inbound support via text to consumers
  • Seamlessly integrate with existing software and workflows.

The main benefit of text message automation is maintaining a consistent, timely, and non-intrusive communication line with consumers, allowing them to engage at their convenience. This enhances recovery rates by making interactions more natural and personalized.

AI-powered text messaging offers convenience and personalization. When consumers feel understood and are offered practical solutions, recovery chances increase. AI-driven texts can:

  • Respond instantly to queries or requests.
  • Offer personalized payment plans.
  • Adapt communication strategies based on consumer response trends.

By leveraging AI for communication logistics, agencies can allocate human resources to complex conversations and negotiations, enhancing overall efficiency without replacing live agents.

Explore an Email Strategy Powered by Generative AI to Engage with Consumers

Email automation powered by Generative AI enables you to do the following:

  • Reach consumers directly in their inboxes, allowing them to respond at their convenience.
  • Automate two-way, intelligent, and comprehensive email conversations about outstanding balances and resolution options.
  • Deliver information such as payment reminders, settlement offers, debt breakdowns, and deadline alerts promptly.
  • Integrate seamlessly with your tech stack and workflows.
  • Respond immediately to queries or requests, expediting the recovery process.

Today, email is one of the most common forms of communication. Having Conversational AI handle part of your email communication strategy represents a game-changer for collection agencies of all sizes.

How AI Complies with Canadian Regulations, Both Federal and Provincial

Skit.ai’s solution is tailored specifically for debt collections, and built to comply with the industry’s regulations, such as permitted call timings, frequency of contact attempts, and mandatory disclosures.

These are the federal Canadian regulations our solution complies with through rigid guardrails and filters:

  • Personal Information Protection and Electronic Documents Act (PIPEDA)
  • Canada’s Anti-Spam Legislation (CASL)
  • Canadian Radio-Television and Telecommunications Commission: Key Unsolicited Telecommunications Rules

To ensure data security, we have the following certifications:

  • SOC 2 Type II certification
  • ISO 27001:2022 certification
  • Information Security Management System (ISMS) policies and procedures
  • PCI-DSS compliant
  • AES-256 encryption

Skit.ai also complies with all province-specific laws—such as Ontario’s Collection and Debt Settlement Services Act and British Columbia’s Business Practices and Consumer Protection Act.

Enhancing the Overall Consumer Experience (CX)

It’s also a good practice to focus on the customer experience, which is often overlooked in debt recovery.

Despite seeming out of place, the way consumers interact with your agency significantly influences their behavior. Providing self-service options, like text messaging and email automation, can greatly enhance the consumer experience. Text messaging automation accelerates the resolution process and appeals to demographics that prefer not to use phone calls, such as younger consumers.

Overall, enabling consumers to communicate through their preferred channels maximizes engagement and improves resolution rates. Additionally, Skit.ai’s solution is context-aware, tracking previous interactions across different channels, including Voice AI phone calls.


Are you interested in learning more about how Conversational AI can improve your collections strategy? Book a demo to schedule an appointment with one of our experts!