Delinquency rates are on the rise again. While this may have been the perception of many collections professionals over the past few months, the data published by the Federal Reserve Bank of New York’s Center for Microeconomic Data in February 2024 confirms it.
During the last quarter of 2023, the total household debt in the U.S. increased by $212 billion (+1.2%). This can be attributed to the rise in balances for multiple types of debt, including:
Mortgage balances increased by $112 billion from the previous quarter.
Credit card balances increased by $50 billion (+4.6%).
Auto loan balances increased by $12 billion, standing at $1.61 trillion.
As a consequence, delinquency rates have been rising in Q4, with 3.1% of outstanding debt in delinquency at the end of the year.
Delinquencies have been consistently increasing among most types of debt; notably, credit card delinquencies have been rising among younger borrowers. Collection agencies now need to compete with multiple entities to recover payments from consumers, and their communication strategy is key.
What Does the Rise in Delinquencies Mean for Collection Agencies?
The rise in delinquencies signifies a challenging period for collection agencies, as they must navigate an environment where consumers are juggling multiple debts. This increase in late payments can lead to a heavier workload and the need for more resources as agencies attempt to manage an expanding portfolio of delinquent accounts.
With more accounts falling into delinquency, the probability of successful debt recovery diminishes without the adoption of efficient and strategic collection practices. Additionally, with the escalation of competition for repayments among different creditors, collection agencies are compelled to refine their approach to ensure they stand out and effectively reach consumers.
For collection agencies, this uptick in delinquencies also represents an urgent call to innovate and adopt newer technologies. Traditional methods of recovery, through letters and manual calling, no longer suffice in the face of evolving consumer behaviors. That’s where AI comes into play.
How Conversational Voice AI Can Reduce Delinquencies
Conversational Voice AI consists of the utilization of voicebots or Interactive Voice Assistants to automate collection phone calls. The benefits of using Voice AI are many:
Personalization: Interactive Voice Assistants offer a personalized and responsive interaction with consumers. The Voice AI solution addresses the consumer by name and knows the necessary contextual information on the due balance, the original creditor, and more.
End-to-End Automation: Voice AI can handle collection calls from start to finish: establishing right-party contact (RPC), providing information on the outstanding balance, answering questions, capturing promise-to-pay, taking payments on-call, and also transferring the call to a live agent whenever necessary.
Scalability and Account Penetration: A high delinquency rate means that agencies have more accounts to contact. This can be challenging in terms of staffing, since you can’t tap into unlimited staffing resources no matter how large your agency is. AI is infinitely scalable, and enables you to penetrate thousands of accounts within minutes.
Reach Younger Consumers: As we explained earlier, credit card delinquencies have been rising among younger borrowers. Younger consumers tend to prefer to interact with voicebots and chatbots rather than human collectors—and are unlikely to respond to a print letter. Meet young consumers where they are—with the latest technology.
Is It Difficult to Adopt a Voice AI Solution?
The short answer is: no.
No IT staff needed: The adoption of Skit.ai’s Voice AI platform is fast, easy, and painless, not requiring any specialized IT staff on the agency’s end. Our team helps you set up the platform according to the type of campaigns you’re running and the type of debt you’re servicing.
Preset compliance filters: The platform is already preset with all the applicable compliance filters at the federal and state levels, ensuring that calling times and frequency are programmed to be fully compliant.
Go live in 48 hours: You can easily share your first campaign data via a simple flat-file transfer, and you’ll be able to go live in less than 48 hours.
Consumption-based pricing: The pricing model is consumption-based, so you pay for the minutes you use.
Are you ready to take the leap, or do you want to learn more about our solution? Schedule a call with one of our experts using the chat tool below.
Debt collection is a notoriously difficult task—and law firms specializing in this field are no exception to that rule.
Creditors’ rights law firms involved in collections frequently face obstacles such as compliance with ever-changing regulations, account penetration, staffing challenges, and the high costs associated with collections. As a consequence, these firms are increasingly looking towards innovative solutions to streamline their operations, making them not only more efficient but also more cost-effective.
The field of legal collections is complex and ever-evolving, and just like other segments of the accounts receivables industry, it’s quickly catching up with technology, particularly the use of artificial intelligence. In this article, we’ll explore the use of Conversational Voice AI for legal collections, a booming technology that will likely become an industry standard.
Investing in AI Technologies for Collections and Beyond
AI-driven solutions like machine learning, natural language processing, and automation have been gaining significant traction among law firms and collections agencies. These technologies are capable of analyzing large datasets to identify trends, predict payment behaviors, and personalize communication strategies.
Most notably, the introduction of Conversational Voice AI has revolutionized the debt collection industry, with Skit.ai emerging as the industry’s leading provider of this type of technology. Voice AI enables organizations to automate phone interactions with consumers, streamlining and accelerating the entire collection process.
This development ushers a new era of efficiency, personalization, cost-effectiveness, and customer satisfaction.
Here are some of the most common challenges faced by creditors’ rights law firms:
Regulatory Compliance: Law firms and agencies are the most careful and well-informed when it comes to complying with laws and regulations, including the TCPA, FDCPA, and Reg F.
Staffing: Collecting in-house requires hiring and retaining full-time staff, including legal assistants and live transfer agents, which is costly and time-consuming.
Outsourcing: Outsourcing collections to a third-party agency is a common practice, yet it’s an expensive option for law firms.
Call Volume: Maximizing the number of consumers reached, known as account penetration, can be a pain point that some companies end up compromising on, especially when dealing with hundreds of thousands of accounts.
Time and Resources: The last calling attempts before pursuing legal action cost time and resources, including establishing right-party contact (RPC).
What Is Voice AI and How Does It Work?
Conversational Voice AI is a sophisticated technology that simulates human-like conversations with consumers. It combines natural language processing (NLP), machine learning (ML), and speech recognition technologies to effectively interact with consumers in a natural-sounding and fluent manner.
Voice AI enables companies to automate thousands of consumer interactions within minutes at a fraction of the cost of a traditional collection call. Collection agencies have been relying on this solution for both outbound and inbound collection calls, successfully cutting costs and accelerating the recovery process.
This technology must not be confused with an IVR system. An IVR forces users to listen to lengthy menus that are mostly irrelevant. Research has consistently shown that IVRs are not popular among consumers. Unlike IVR, an AI-powered solution like Skit.ai handles intelligent, personalized, and effective conversations with consumers, eliminating wait times and cutting costs.
Skit.ai’s solution is fully compliant with all laws and regulations at the federal and state levels related to debt collection, including the TCPA, FCDCPA, and Reg F. Additionally, we also adhere to a stringent data privacy policy.
The adoption of Voice AI is incredibly smooth and efficient. Many of our clients experience a seamless integration, going live with the solution in less than 48 hours. This rapid deployment enables you to start collecting immediately, requiring minimal effort and eliminating the need for specialized IT personnel.
Here’s what one of Skit.ai’s clients has said about us: “Skit.ai’s technology has proved very effective. The platform smoothly integrated with our payment gateways, effortlessly handled high call volumes, and strictly adhered to compliance standards. Consumers have begun to prefer interacting with the Voice AI solution, marking an improvement in the overall consumer experience.”
Are you curious about how Conversational AI can streamline your collection efforts? Use the chat tool below to schedule an appointment with one of our experts!
Since the COVID-19 pandemic, massive supply chain delays, and the ongoing recession, auto finance companies have had to be as competitive and forward-thinking as possible. After an unprecedented year, many companies are looking to invest more in technology, specifically artificial intelligence, in 2024.
What’s Happening in the Auto Finance Industry Right Now
At the moment, four facts are defining the auto finance industry:
Car prices have never been as high as they are right now
Record car prices are leading to higher auto loans debt
Auto loan interest rates are climbing
Auto loan delinquencies are increasing
Let’s break these statements down with the help of a few data points.
Car prices are still very high: After hitting record prices in 2022, the average price for a new car was at $48,247 at the end of 2023. Used car prices were down to $27,300 in June 2023.
High car prices = higher auto loan debt: Auto loan balances hit a record $1.6 trillion in Q3 2023. Between high interest rates, high inflation, and high prices, affording a car has been increasingly difficult for consumers.
Delinquencies are increasing: Delinquency rates reached their highest level in almost 30 years at the end of 2023. This is likely due to the increase in loan size, interest rates, and monthly payments.
Financial institutions, in general, have been eager to adopt AI solutions to process loans and vet borrowers. But AI can do much more than professionals in the auto finance field might expect.
The Different Uses of AI in the Auto Finance Industry
With the high demand for auto loans, providers have been adopting new solutions to streamline operations. One of the biggest focuses in auto finance right now is the digitization journey—starting with digital contracting. Digitization makes operations more efficient and scalable, helps to improve compliance, and enhances the customer experience. Yet, artificial intelligence can achieve much more than just “going paperless.”
AI can expedite many processes, saving time, money, and other resources; it can generate data-driven predictions much faster and more accurately than humans. While AI can be extremely helpful, it does not substitute human work but rather augments and simplifies it. Paired with human expertise, AI can be an incredible asset for auto finance companies.
Here are some of the applications of AI:
Document management with AI: Document management with AI enables companies to classify, process, and cluster documents, extract data, secure sensitive information, and recognize signatures. This can be useful when processing applications; it helps reduce errors, improving the consistency and accuracy of the data.
Decisioning with AI: AI can assess risk and help auto finance companies in the approval process. While AI should not make irreversible decisions independently, it can help companies to make data-driven decisions.
Predictions and behavioral models with AI: Predictive models allow auto finance companies to better understand their customer base and its behavior as they identify patterns that can be useful for future decisions.
Customer service and communications with AI: Chatbots and voice bots have the ability to transform and streamline customer service, improving the company’s customer experience and providing a distinct competitive edge.
Collections and payments with Voice AI: Conversational Voice AI can also help auto finance companies in the collection process, as it automates outbound calls to customers, reminding them of outstanding payments and collecting payments over the phone.
Agent intervention with AI: Thanks to AI-powered predictive models, auto finance companies can flag accounts that require additional communications and facilitate agent intervention.
Voice AI Is the Big New Auto Finance Trend in 2024
Of all the existing trends we’ve mentioned, Voice AI seems to be the one that will get a spotlight in 2024. More providers are turning to Voice AI to automate customer service calls for both inbound and outbound use cases.
Collection calls and payment reminders are one category of customer interactions that a Voice AI solution can easily handle from start to finish—from dialing the number and establishing right-party contact to engaging in a conversation with the customer and collecting payments via gateway.
The Voice AI platform enables auto finance companies to call thousands of different customers simultaneously, sending them reminders and collecting payments on-call or via a third-party gateway. The Voice AI platform can be easily integrated with multiple tools and applications, such as telephony platforms, CRM systems, payment gateways, and messaging tools; all while complying with the latest laws and regulations.
Context is critical: The Voice AI solution keeps track of the information obtained from the customers, feeding the data to the CRM in real-time and providing helpful analytics for future action.
As a result, companies adopting Voice AI can collect payments more efficiently, saving a lot of time and money they would otherwise spend if they did everything manually.
Voice AI can be adopted for many use cases, not just payments and collections. Voice bots can be employed for both inbound and outbound use cases, customer service, and other types of communication.
Interested in learning more about how Conversational AI can transform the auto finance industry? Schedule a call with one of Skit.ai’s experts using the chat tool below.
Companies offering Buy Now, Pay Later solutions have been in business for over a decade; in recent years, with the boom of e-commerce, BNPL has become an established vertical within financial services and consumer lending.
This past Cyber Monday, a record number of holiday shoppers used BNPL services to relieve stress on their wallets; the surge in popularity amounted to a 19% increase from the previous year, according to a report by Adobe Analytics. As more consumers struggle to make ends meet but don’t want to forgo their shopping, companies offering BNPL services are gaining popularity.
How do Buy Now, Pay Later services work, and what role is artificial intelligence playing in this promising industry? How can BNPL companies leverage the power of Conversational Voice AI to streamline and accelerate their collection processes? In this blog post, we’ll dive into the answers to these questions.
The Buy Now, Pay Later Boom in U.S. Financial Services
Buy Now, Pay Later solutions usually offer consumers (mostly online shoppers) highly customizable payment plans to purchase products so they can pay in installments rather than upfront. Here’s how it works: The BNPL provider pays the merchant the full product’s price, indirectly lending the money to the consumer. Transactions through BNPL are easy and fast to execute; they’re highly customizable, so the consumer can choose the plan that works best for them.
What’s appealing is that BNPL are often interest-free. The longer the time range for the installments is, the higher the interest rate becomes. However, consumers will be charged a late fee whenever they miss a payment.
Affirm, Afterpay, Klarna, and Sezzle are some of the most renowned BNPL companies; tech giants like Amazon and Apple have recently jumped on the bandwagon and unveiled their own solutions.
Why Collections Are the Most Important Piece of the BNPL Puzzle
For Buy Now, Pay Later businesses, payment recovery is vital. To improve business operations, figuring out how to optimize the recovery process is the key to long-term success.
Most BNPL companies handle collections in-house, with a team of agents or collectors who reach out to consumers to remind them to pay and collect their due payments. This process can present some serious challenges if done manually and without AI.
Why Voice AI Is the Collections Industry’s Preferred Recovery Channel
Being part of the fintech industry, BNPL companies are usually pretty agile and fast at adopting new technologies. There are many different uses of artificial intelligence (AI) in this industry, from fraud detection to data analysis, from credit scoring to AIOps.
Given the importance of collections for BNPL businesses, employing AI to streamline the recovery process and automate interactions with consumers is the answer to the challenges we explored earlier. In particular, Conversational Voice AI has emerged as the collections industry’s preferred recovery channel, as it enables companies to automate thousands of consumer interactions within minutes at a fraction of the cost of a traditional collection call.
Here’s how Voice AI can streamline the collection process:
Here’s what one of Skit.ai’s clients has said: “Skit.ai’s technology has proved very effective. The platform smoothly integrated with our payment gateways, effortlessly handled high call volumes, and strictly adhered to compliance standards. Consumers have begun to prefer interacting with the Voice AI solution, marking an improvement in the overall consumer experience.”
As another client of Skit.ai put it: “When it comes to collections, most consumers don’t want to have to interact with another person. We wanted to make the process easier. Skit.ai’s solution allows consumers to choose; they can interact with the voicebot, ask to speak to one of our agents, or visit our website to make a payment.”
Are you curious to learn more about how Conversational AI can accelerate your collection efforts? Use the chat tool below to schedule an appointment with one of our experts!
Some technological tools and solutions, once adopted, become a seemingly indispensable part of a company’s operations, to the point that it’s hard to remember how things were before the advent of these technologies. The integration of artificial intelligence and large-language models appears poised to follow a similar trajectory across various industries, including the accounts receivables sector.
The debt collections industry has traditionally been slower at adopting new technologies in the past—likely due to the strict regulatory landscape and the nature of the industry itself. But a notable shift seems to be underway. We are seeing so many collections executives and companies proactively engage with AI providers, eagerly trying to figure out how different AI solutions can simplify processes and save them money.
At Skit.ai, we recently sponsored a webinar hosted by Accounts Recovery on this very topic. The quotes in this article are excerpts from the webinar; you can watch the recording to listen to the entire conversation and get the full context. The experts who spoke are Brandon Huisman of State Collection Service, Nate Kalnins of The Stark Agency, John Kelan of Hunter Warfield, Jeremy Mapes of Mapes Consulting, Alec Tilley of Goal Solutions, and Amit Ambre of Skit.ai.
How AI Is Changing the Way We Collect Debts
Voice AI adding self-service option and preventing volume handling challenges: “One thing we’ve seen on the Voice AI front is putting self-service on the forefront, and yet, offering that smart call routing back to the call center where it’s needed. So rather than clogging up the inbound lines, Voice AI allows the caller to really navigate and self-serve and hopefully prevent a phone call to the call center.” — Brandon Huisman of State Collection Service.
A more effective and efficient workflow: “Letting the Interactive Virtual Assistant (or Voice AI solution) handle the bulk of the conversations and prescreen interest for resolution, especially on low-scored accounts so that the agents can shift more towards helping the people that want to be helped and have a much more effective and efficient workflow in general. We’re also seeing benefits a little bit less directly operationally, but also in the way that the collection departments are being managed, like using transcription tools to create meeting minutes and direct takeaways to take stakeholders in different departments or even generating SOPs and things like that via loom and screen recorders, where you can dictate exactly what you’re doing and have that transcribed into something that essentially serves as a readymade SOP to make our processes more repeatable and easily trainable.” — Nate Kalnins of The Stark Agency.
Filling the staffing gap left by COVID-19: “You could go on Google right now and you’d find easily 25, 30 different types of AI groups. Additionally, during COVID-19 and afterward, a lot of agencies have been challenged with finding employees, so they’ve been looking for what to do. AI is starting to fill a large part of that gap, besides just the outsourcing that they might potentially do. I think the opportunities are limitless.” — Jeremy Mapes of Mapes Consulting.
Finding the right combination and calibration between channels: “I think the next bit will be trying to find the sweet spot across all the multiple tools and all the multiple AI platforms and figuring out how to maximize them for your own use case and your own kind of debt.” — Amit Ambre.
Are Machines Ever Replacing Collectors?
Don’t forget consumers’ preferences: “I don’t think we’ll ever fully replace humans doing the job, nor should we. I think we would be foolish to not account for consumer preference. And there will always be consumers that prefer to deal face-to-face or directly with a person. At the end of the day, I still think that skilled labor is a precious resource and one that we can use to differentiate the quality of the services we provide. So, we tend to view Interactive Virtual Assistants (IVAs) and bots as something that we can use to scale our services without adding additional staff and lean more on developing the skillsets and retaining the staff that we do have.” — Nate Kalnins of The Stark Agency.
How is AI changing the agents’ skills? “The question is not just the percentage [of work that is being automated with AI], but what is the agent skillset that’s required afterward? So if the AI is handling a lot of easier tasks, does that mean that the agents have to be higher-skilled and have more training and more access to information for more complicated use cases that aren’t easily handled by technology? I think that’s likely.” — Alec Tilley of Goal Solutions.
The industry is constantly evolving: “I definitely don’t think we’ll ever be able to get to 100% reliance on AI, but I think definitely 80-90%, I could see feasible. Even looking at right now versus a year ago, how much is in this industry that wasn’t there before. It’s evolving constantly. There are more vendors out there. The price points are coming down. It’s easier for companies like us to get these types of technologies in place. If we can manage 80% of our business with AI, I think that’s a huge win for the industry, but I think there will always be a place for the reps themselves in our business.” — Brandon Huisman of State Collection Service.
What Will the Industry Look Like 5 Years from Now?
Ask the tough questions: “Fundamentally, we have to ask ourselves: What problems can we foresee that exist today that would also be a problem five years from now? I think you just have to pose some questions that you think will be there in the next two to three years and ask yourself, why are you trying to solve these with technology? You have to weigh out the pros and cons of using it based on cost, FTE changes, and shifting culture. Those types of things are what weigh on us when we’re looking at any kind of new products, like chatbots. When we were first trying to determine why we would want a chatbot during operational hours, [we] realized there are a lot of repetitive things that chat agents have to go through constantly, that are just basically a copy-and-paste or a quick-link response. So you start saying, what if we start hitting off that at the forefront? What technology can you bring on today that you can evolve over that next period to hopefully help you combat what might still be there in the near future?” — John Kelan of Hunter Warfield.
Don’t wait for the perfect solution: “If you wait until the perfect solution exists—one; you might be left behind. And two; when it presents itself, you may be knowledge-deficient because it’s just so overwhelming. There’s so much to bring on that you’re not in a good position to bring it on and use its full capabilities responsibly. So for us, it’s more [about] constant progress and really understanding how this works and tailoring and how we can use it for our use cases.” — Nate Kalnins of The Stark Agency.
Investing Time and Resources to Implement New Tools
Plan short and long-term: “You can’t just assume that you’re just going to buy something and turn it on out of the box. I think it’s cool that you can do some things in two to three months, but I would view this as a car you’re going to be driving for a long time and have resources that are constantly pushing towards using these tools, more and more. Can you get up and running in a few months with a flat-file kind of situation? Sure. But then how do you get better API integration? How do you add more use cases? How do you figure out why they’re calling in the first place? I think the right approach is a long-term commitment with some resources dedicated to it.” — Alec Tilley of Goal Solutions.
Try with pre-set models. “Solutions like Skit.ai have pre-set models that can be used; so that’s a very short time to go live. I know a lot of us in the industry like to see anything that we’re testing, anything that’s new, be out there for six months to a year just because we don’t want to be the first ones to get sued. I think the Voice AI solutions that are coming up now, they’ve been out there for six months to a year; so you can trim that down.” — Jeremy Mapes of Mapes Consulting.
What’s Your Vision for the Future of Collections?
Meet every consumer’s preferences: “The vision we’re focusing on is being able to have a seamless interaction with a consumer using the channel of their choice and the technology of their choice. We just want the consumer to be able to have, 24/7/365, any tool, any technology to allow them to resolve their debt with the simplest, least complicated process possible. It also to take some of the repetitiveness or the stressfulness off the agents.” John Kelan of Hunter Warfield.
AI will become the baseline expectation: “We see, among our clients, a tremendous interest in these same topics we’re discussing here. And many of them have already deployed this type of technology themselves. So they’re looking long and hard at it, and at some point, it’s going to become the expectation [to offer] those seamless interactions for consumers – that’s just the baseline expectation and no longer a differentiating factor of work.” — Nate Kalnins of The Stark Agency.
Focus on alignment: “At the end of the day, from a collection agency perspective, the three stakeholders are obviously your clients, the consumers you are interacting with, and your agents. Irrespective of whether with AI or without AI, we need to ensure that there’s an alignment in terms of the results that we want to achieve for all three different stakeholders. In terms of AI, the whole perspective has to be how things can work together to ensure that you make this experience as smooth and as easy for the stakeholders as possible.” — Amit Ambre of Skit.ai.
Want to learn more about Conversational AI and how it can benefit your business? Use the chat tool below to schedule a free consultation with one of our experts!
It’s a wrap! 2023 has been a fantastic year for Skit.ai. From turning 7 to unveiling a brand new office space in Bangalore, the Skit.ai family had no shortage of notable moments.
Let’s re-live some of our favorite moments from this past year; grab a cup of coffee or tea, and make yourself comfortable as we walk down memory lane.
Generative AI Takes Over Skit.ai’s Voice AI Solution
Between ChatGPT and LLMs, virtually everyone has been talking about integrating artificial intelligence to automate and accelerate countless processes this year.
In May, we announced the incorporation of Generative AI into Skit.ai’s solutions. Thanks to the new advancements in AI, our voicebots now sound more natural and can handle even more complex conversations, leading to better results and enhanced customer experience (CX).
Some of the business outcomes ARM companies can expect with Generative AI:
Higher collection and resolution rates
Lower agent dependency
Ability to create new voicebots quickly
Ability to enter new markets at ease
Skit.ai’s Big Win at the International Business Awards
In August, Skit.ai won the Gold Stevie Award for the “Most Innovative Company” at the 20th annual International Business Awards! This award is yet another testament to our company’s quest to develop cutting-edge Conversational AI solutions.
Skit.ai Inaugurates Brand New Office Space in Bangalore
In October, just in time for our company’s 7th anniversary, we inaugurated our new office space in Bangalore. The gorgeous new office, spread across two floors, offers more space for our team members to work and collaborate on our innovative solutions.
Skit.ai Reaches 50 Clients in the U.S. Collections Industry
This year, Skit.ai has had remarkable success in the accounts receivables industry in the U.S., with over 50 organizations already using its conversational Voice AI technology to automate and streamline their recovery strategy. Skit.ai’s Augmented Voice Intelligence platform is the ARM industry’s favorite Voice AI solution thanks to the company’s industry expertise, the easy and fast deployment process, and the ever-evolving technology.
You can learn more about our current clients and their accomplishments on our News page.
Memorable Company Initiatives and Events
Throughout the year, our team members have come together on multiple occasions at company parties, outings, happy hours, a World Cup screening, stand-up comedy acts, potluck dinners, and more. Two highlights of our year were Skit.ai’s 7th-anniversary parties—which took place both in New York and Bangalore—and Hackday 2023, a 24-hour hackathon that saw members from different teams contribute with innovative ideas and add value to our business operations.
Another important initiative that was launched in 2023 was the Employee Exchange Program, which has allowed team members from India and the United States to visit each other and build valuable relationships on a global scale.
We are looking forward to an even more exciting and productive year in 2024!
Hungry for more? Follow our LinkedIn page and stay tuned for many more updates in 2024. Happy New Year!
Tax season is the busiest time of the year for collection agencies. According to a recent report, 44% of Americans say they earmark their tax refunds to pay off their debts or bills. With 3 in 4 U.S. residents receiving a tax refund from the government during this season each year, the number of people who will wisely take advantage of the reimbursements to pay off their debt is high.
Collection agencies know it’s important to take advantage of this window of opportunity to maximize their recovery rates and agency margins. During tax season, the industry usually experiences a peak in payments, paired with a general openness of consumers to engage with collectors. Many consumers will be relying on tax refunds to pay off their debt at this time of the year.
Now is the perfect time for agencies to prepare for tax season and the volume surge in outbound and inbound calls. In this article, we’ll explainhow Voice AI (the technology behind a voicebot) can transform tax season for the better, making it a less stressful and more profitable time for collection agencies.
The Challenges Collection Agencies Face Before and During Tax Season
While tax season undoubtedly represents a window of opportunity, it also presents several challenges for collection agencies. The best way for management to tackle these challenges is to prepare in advance and to involve their collectors on the floor in these preparations.
Here are some of the most common challenges collection agencies face before and during tax season:
Hiring new collectors: To handle the surge in call volume, collection executives often seek to hire new collectors to join their staff. Hiring takes time and resources; since the COVID-19 pandemic, it’s become more challenging to find new talent, as people are inclined to seek more flexible jobs, and salaries have become more competitive. You’ll need ample time to find new talent and train new hires.
Training staff to prepare for the season: Whether newly hired or seasoned, all collectors should receive the appropriate training before the beginning of tax season. All training materials should be easily accessible, focusing on the challenges and skills specific to this time of the year.
Updating the agency’s compliance management system: Every agency should have a compliance management system — often found within the collections management software. This system is used to store and organize the current laws and regulations of the ARM industry. Before tax season begins, the agency’s compliance officer or manager should ensure that the system is up to date with the latest regulations, including state laws; outdated regulations should be removed. Additionally, this system should be easy to access and browse for collectors.
Planning a successful settlement campaign: The surge in collection volume encourages some agencies to offer small discounts for a limited time; other agencies take it to the next level by planning a wide-scale settlement campaign. For a settlement campaign, the agency focuses on a specific group of accounts, typically consumers with higher recovery rates and debt whose age falls within a specific timeframe. If the agency services third-party debt, then it also must coordinate the campaign with the original creditors. Executives must decide what balance reduction they are going to offer those consumers and the running time of the campaign. The entire process can make the agency extremely busy, and things are likely to get hectic for the collectors on the floor.
How Voice AI Can Make Your Life Easier During Tax Season
Voice AI, the technology behind voicebots, has become one of the favorite automation technologies in the accounts receivables industry. Voice AI enables collection agencies to automate collection calls, both inbound and outbound, making it much easier for executives to scale their collection campaigns without the need to hire additional or seasonal agents.
Skit.ai’s Voice AI solution initiates thousands of calls to consumers within minutes, establishes right-party contact, reminds them of the outstanding balance, and encourages them to make a payment or captures promise-to-pay. The solution easily transfers calls to your live agents so they can speak to the most engaged consumers and collect payments on-call.
It’s important to note that Voice AI is not IVR (interactive voice response), an outdated and unpopular solution commonly used in customer service. Unlike IVR, Voice AI can handle intelligent, two-way conversations with consumers.
Call automation with Voice AI is transforming collections across the board, as it enables collection agencies to handle many more accounts simultaneously, recovering payments at a fraction of the cost. Additionally, this technology augments the work of live collectors, who are empowered to handle more complex cases and focus on more revenue-generating tasks; whenever agents get a transfer from Voice AI, they receive the context on the consumer’s previous interaction with the voicebot in real time.
While this technology is helpful all year round, during tax season it becomes particularly essential. Here’s why:
Make it super easy for consumers to pay. Any roadblock in the payment process can significantly hinder the recovery of the debt. That’s why customer experience plays an important role, and making the payment as easy and frictionless as possible is a priority for your agency. Voice AI makes the process smooth and pleasant for consumers.
No need to hire additional collectors during tax season: Voice AI enables executives and managers to scale their operations, without the need to hire additional collectors during this busy season. This way, they can continue to rely on their trusted team and get the extra help they need from the Digital Voice Agents, who are unlimited in number and can handle thousands of calls simultaneously. Collections with Voice AI are significantly cheaper; additionally, voicebots don’t take any commission!
Fewer concerns about compliance thanks to Voice AI: Executives can worry less about complying with laws and regulations since the solution is fully trained to comply with regulations at the state and federal levels. Unlike live collectors, the automated agent is always compliant and does not go off script.
Execute a smooth settlement campaign at scale: With Voice AI, collection agencies can execute a settlement campaign at scale, reaching thousands of consumers in a very short amount of time to offer the settlement and collect the payments.
When Should You Start Preparing for Tax Season?
While it’s never too early to get started, we see many agencies evaluate partners and vendors before Thanksgiving, just as the holiday season approaches and many U.S. residents are known to use their credit cards for holiday spending.
However, make no mistake: it’s also never too late! At Skit.ai, we pride ourselves on our fast and efficient implementation process. From the moment you adopt our Voice AI solution, you can go live and start using the platform in as little as 48 hours.
Are you ready to take the next step toward call automation with Conversational AI? Schedule a free demo with one of our experts using the chat tool below!
What Are Connect Rate and Right-Party Contact (RPC)?
Debt collection agencies invest time and resources in getting in touch with consumers. In theory, all it takes for a collector to speak with a consumer is to hit the call button, but in reality, it’s not that simple; oftentimes, the number is wrong, the consumer does not answer the phone, or the wrong person picks up the phone.
Connect rates and right-party contact rates are two metrics that significantly affect the outbound operations of a contact center—including a collection agency.
The connect rate measures the percentage of calls that are picked up over the total outbound calls initiated. The right-party contact rate is the percentage of calls in which an agent is able to connect with the target consumer, which could be either the debtor or a relative who has been given permission to handle the debt. Right-party contact (RPC) is the most accurate measure of the effectiveness of an agency’s outbound calling efforts.
In this article, we will explore how conversational voice AI technology can efficiently verify right-party contact, leading to significant time and cost savings for collection agencies.
☎️ Factors that affect connect and right-party contact rates
❌ Wrong number
⛔️ Busy line
? No answer
? Voicemail
??♀️ Wrong party answers the phone
Why Right-Party Contact Can Be a Challenge for Collection Agencies
Collectors know it very well: reaching consumers can be tricky.
Given the limitations imposed by the TCPA and the FDCPA, collectors can’t call debtors at any given time of the day. While timing is everything, even a well-staffed agency can only contact consumers so many times in order to reach them, as the number of available collectors is limited and you don’t want them to spend too much time trying to reach the same numbers too often.
Right-party contact can be a serious challenge for collection agencies. Collectors (and their managers) want to spend as much time as possible actually speaking to consumers and collecting payments — and as little time as possible trying to reach people on the phone. Calls not resulting in RPC don’t lead to a collection and result in an overall waste of resources.
This is where automation and artificial intelligence come into play.
How Voice AI Solves the RPC Issue for ARM Companies
With rising costs, staffing challenges, and shrinking margins, accounts receivables companies are looking at digital transformation and automation as valid solutions to their operational challenges.
Contact centers in all industries have been relying on automatic dialing systems (or auto dialer software) for decades. These systems make the dialing process faster and easier, boosting agent productivity; in addition to queueing calls and dialing the target number automatically, they also screen out inactive numbers, busy lines, and answering machines, drastically improving the contact center’s connect rate.
But what about right-party contact?
Once the collector reaches a person on the phone, they must establish whether the person they are speaking to is the right party (the consumer or debtor) or not. The right party could also be a third party (a person authorized to handle the debt or an attorney representing the debtor). This process can take a few minutes.
A conversational voice AI solution like Skit.ai can handle the actual call — rather than just the dialing process.
Once someone picks up the phone, the voice AI solution confirms right-party contact and authenticates the consumer through SSN, DOB, or zip code; it then engages with the debtor, offering ways to pay off their debt. If needed, the solution will negotiate a payment plan or transfer the call to a live agent, who can assist with more complex queries.
The entire process is faster and cheaper, and allows the collection agency to save on resources, enabling live agents to focus on more complex calls and engage with consumers who are already authenticated. Below, you can see a step-by-step summary of how Skit.ai’s voice AI solution handles a debt collection call:
Are you interested in learning how Conversational AI can transform your collection agency’s results? Schedule a call with one of Skit.ai’s experts using the chat tool below.
Let’s face it: debt collection agencies often sit on high-volume portfolios of accounts, as they lack the capabilities and resources to contact all consumers in a timely manner. Ultimately, some agencies give up on reaching all those accounts to focus solely on the larger ones.
ARM companies usually handle thousands of new accounts each month, but many of those accounts might be left untouched due to the lack of bandwidth. For each account, agents need to establish right-party contact (RPC), remind the customer of their outstanding balance, and offer ways to help them pay off their debt, such as a payment plan. More often than not, customers are not available right away, and the agent has to call them back at a different time.
What if I told you that you could automate this entire process?
Yes, you heard that right. A conversational voice AI solution can handle your collection calls on your behalf. In this article, we’ll explain how this type of solution works.
What Is Call Automation?
Nowadays, 88% of consumers expect organizations to offer a self-service support portal. Contact centers in all industries — from banking to e-commerce and, of course, accounts receivable management (ARM) — are turning to automation as a strategy to overcome the challenges of managing both inbound and outbound calls with customers.
In this rapid-changing environment, marked by the surge of generative AI, conversational AI has emerged as a key debt collection software to solve automation challenges. These tools are capable of handling conversations with consumers from start to finish, without the need for any human intervention.
Voice AI technologies may sound “new” to you today, but they are set to become the industry standard in the collections and payments space within a few years. Early adopters are already reaping the benefits as they are ahead of the learning curve.
When they hear “call automation,” many people tend to think of IVR (interactive voice response) systems. Think, “To make a payment, press 1…” In recent years, voice automation, AI, and speech recognition technologies have significantly evolved, also with the emergence of conversational voice AI and large language models, delivering a much more sophisticated technology than IVR. You can think of IVR as the “grandfather” of voice AI.
A conversational voice AI platform delivers a human-feeling and effective two-way conversation with a consumer, answering questions and providing context-specific information.
Once you upload data for a collection campaign, the solution can initiate thousands of calls to consumers, establishing RPC and reminding them of their outstanding balances; the solution then helps them pay via select payment gateways or negotiates a payment plan.
What Does an Automated Collection Call Sound Like?
Because Skit.ai’s technology is powered by AI, no interaction will be identical to the other; every customer is different, and each call is personalized. The technology is built to handle a natural-sounding back-and-forth conversation with the consumer following their responses, cues, and questions ad hoc.
If you want to learn more about our approach to customer experience (CX) and how we build a persona for our voice AI solution, read our article about how Skit.ai elevates CX in collection calls.
The voice AI platform handles these scenarios:
Is an AI-powered Collector Compliant?
Compliance is one of the most common pain points and concerns for executives working in collections. There are many regulations at both federal and state levels, and sometimes consumers may file lawsuits against ARM companies, causing major expenses on the agencies’ part. Additionally, regulations often change, and collectors sometimes struggle to keep up with the new developments.
Skit.ai’s conversational voice AI solution fully complies with the current laws and regulations related to collections and phone calls, such as Reg F, the TCPA, and more. We ensure that the solution initiates calls only at the permitted times of the day and within the correct frequency. We prioritize information security; we have, among others, ISO 27001:2013 and PCI DSS certifications and use AES-256 encryption.
It’s actually easier to ensure that an AI solution rigorously complies with regulatory requirements; this is because the solution:
never goes off-script
always provides identity disclaimers
only calls customers at permitted times
always honors do-not-call registries
never resorts to threats or aggressive language.
Do you want to learn more about call automation for collections and payments? Are you looking to adopt a Conversational AI solution for your business? Schedule a call with one of our experts by using the chat tool below!
From automation and decision-making to fraud detection and customer experience, the applications of artificial intelligence in financial services seem endless. As companies, both large and small, navigate this evolving landscape and its plethora of vendors and solutions, many ask themselves: How will this technology be regulated once our legislative branch starts looking into it more seriously?
At Skit.ai, we organized a panel discussion hosted by our friends at Accounts Recovery with three renowned experts, to whom we asked the most pressing questions on AI in financial services and the regulatory environment. What regulations should we expect? More specifically, which aspects of AI will regulators be more interested in scrutinizing?
In this article, we’ll discuss the current role of AI in the financial sector — with particular attention to the accounts and receivables industry — and report some of the insights from the industry experts we interviewed during the event.
Understanding AI’s Impact on Financial Services
AI in financial services is not a prediction or a catchphrase. According to an international survey published in 2020 by the World Economic Forum and the Cambridge Centre of Alternative Finance, 85% of financial services providers already use AI in some form. Additionally, 77% of the responding institutions reported believing that AI would become essential to their business in the following two years. With the launch of ChatGPT in 2022, these numbers can only be higher now.
Some of the most notable applications of AI in the sector, according to Deloitte, are:
Conversational AI (such as chatbots and voicebots) for consumer interactions
Fraud detection and prevention
Customer relationship management
Predictive analytics
Credit risk management
The Regulatory Framework in the United States
Over the last few years, there have been efforts for legislators to study and regulate the use of AI in various industries, including the financial services industry. But while other foreign legislative bodies have been notably faster than the U.S. at passing timely legislation, there has yet to be a successful attempt at the federal level here in the United States.
In 2022, a bipartisan privacy bill, the American Data Privacy Protection Act (ADPPA) was introduced in Congress, but it did not make it through the Senate and has ever since been abandoned. Later in 2022, the White House published a policy document named the “Blueprint for an AI Bill of Rights,” seeking to provide guidance on the different rights that lawmakers should keep in mind when framing the discussion on the regulation of AI across industries.
In September, the U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing about “Artificial Intelligence in Financial Services” to discuss AI’s applications, risks, and benefits in the industry.
The witnesses who spoke at the hearing were Melissa Koide of FinRegLab, who spoke about credit underwriting; Professor Michael Wellman of the University of Michigan, who raised concerns about algorithmic trading and market manipulation; and Daniel Gorfine of Gattaca Horizons, who focused on the opportunities presented by AI.
Most recently, the White House issued an executive order on artificial intelligence, establishing guidelines for AI safety and security. The order includes requirements that aim to protect consumers from threats to privacy, discrimination, and fraud.
Insights from the Experts: Possible U.S. Regulations of AI
The following quotes are excerpts from the webinar hosted by Accounts Recovery. Watch the recording to listen to the entire conversation and get the full context. The four experts who spoke are Dara Tarkowski of Actuate Law, Heath Morgan of Martin Golden Lyons Watts Morgan, Vaishali Rao of Hinshaw Culbertson, and Prateek Gupta of Skit.ai.
(Please note: The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only.)
Key Takeaway 1: Look at the European Union for Guidance
“The United States is pitifully far behind the EU, the UK, areas of APAC, and Australia in the way they’ve approached the technology and the utilization of the technology. If we want to see which direction our country will go in terms of AI regulations, we have a five-year playbook of what it looks like in the rest of the world.”
“What we’ve seen from the hearings that have been held in Congress; at its base, the concern by lawmakers and regulators and a lot of the practitioners, is that bad data leads to bad outcomes, which is selection bias. Then we’ve got process bias, which means that bad methods and bad processes lead to bad outcomes. Philosophically, those are the two issues that lawmakers are trying to address in whatever sector.”
“If you’re looking for guidance, put together a framework that is largely compliant with what the European Union has already laid out as the ethical and safe use of AI. In a global economy, it would be foolish of the United States to deviate too much from what the rest of the world is already adopting.”
Key Takeaway 2: This Is Not About Replacing People with Technology
“In our industry, the usage of these types of technologies is not and should not be to replace people or to replace the thoughtfulness and the consideration of the decisioning. However, a lot of these technologies can help speed up and improve our decisioning, so that people can make better and faster decisions, which is better for both businesses and consumers.”
Key Takeaway 3: AI Must Provide Value to Consumers
When it comes to the use of chatbots and voicebots, “you can’t keep consumers in an infinite loop with the artificial intelligence system and not let them talk to an actual human being whenever the AI is unable to provide a resolution. One of the focuses needs to make sure that AI provides value to the consumer, and is not used as a way for companies to create a hurdle between consumers and live agents.”
Key Takeaway 4: Waiting for Regulations May Not Be the Best Strategy
Should we wait for regulations before adopting AI solutions to avoid any risks? “You can’t bury your head in the sand and say: ‘We’re not going to deploy this technology until there are regulations.’ It really isn’t a question of whether you are going to adopt this technology—it’s a matter of when. The more you accept that and look into having risk assessments, an AI policy, and an AI committee, the better you’re going to be. The technology is coming to you through vendors and consumers before you know it.”
Key Takeaway 5: Set up an AI Task Force
“Set up an AI task force, so you can set up a framework on how to use AI properly.”
Want to learn more about Conversational AI and how it can benefit your business? Use the chat tool below to schedule a free consultation with one of our experts!
