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Automate Your Auto Finance Collections with AI-Powered Text Messaging

Simone Somekh

March 18, 2024

Auto finance companies, like all businesses dealing with consumer payments, face a few innate challenges when it comes to communicating with borrowers. Regular outreach to borrowers to remind them of future and due payments is an essential part of the day-to-day operations of an auto finance business to avoid delinquencies.

Common challenges include resource limitations, rising costs, and the inability to send out frequent reminders and handle all inbound calls. As such, reaching consumers at all stages of the collection cycle—from pre-due date reminders to late-stage collections—can be a complex process.

Two possible solutions to these challenges are leveraging top-tier technology and diversifying communication methods. Conversational AI and automated messaging have ushered in new, efficient communication channels with customers, significantly boosting auto finance collection operations.

Powered by Generative AI, text message automation enables two-way, multi-turn, intelligent conversations between lenders and borrowers. This technology is now emerging as a pivotal tool for auto finance companies to communicate with consumers in an effective and cost-efficient manner, helping consumers make payments on time and avoid charge-offs and repossessions.

In this article, we explore the immense potential of Conversational AI-powered text message automation in transforming the auto finance sector, not only in terms of customer communication but also operational efficiency.

Why Conversational AI and Why Text Messaging?

Conversational AI is transforming auto finance collections into a more adaptive and efficient operation. This technology employs natural language processing to understand and respond to customer inquiries, making the process more conversational and less transactional.

Auto finance companies have been using Voice AI to automate both inbound and outbound collection calls, yielding impressive results. Now, industry leaders are extending additional self-service channels to consumers, including text messaging automation with AI.

  • Text messages have a remarkably high open rate of 80-99%.
  • About 90% of text messages are opened within 3 minutes of receipt.
  • Click-through rates with SMS can vary significantly but typically lie between 15-30%.

Conversational AI facilitates two-way, intelligent conversations with customers, answering questions and providing context-based information. Whether used for automating phone calls or text messages, Generative AI allows auto finance companies to optimize their recovery strategy.

The core advantage of text message automation is that it maintains a regular, timely, and non-intrusive communication line with customers. Instead of ignoring calls or feeling exasperated with numerous phone conversations, customers can engage at their convenience and in a format that feels most natural to them.

AI-powered Text Massaging Turbocharges Outbound Outreach

How can you effectively incorporate AI-powered text messaging capabilities into your collection strategy? Let’s start with the outbound use case.

An auto finance business wants to be able to reach all of its active customers frequently and effectively. While maintaining a dedicated staff is crucial, you can only afford so many live agents and they can only handle so many calls. Automation with artificial intelligence is essential to scale the number of calls or outreach via other channels such as text messaging.

Additionally, it’s important to diversify your communication efforts, so adding channels such as SMS alongside phone calls can greatly increase your chances of reaching all customers.

When applied to text message automation, Conversational AI enables auto finance companies to:

  • Reach borrowers on their smartphones, allowing them to reply at their convenience
  • Achieve scalability by handling as many conversations as needed
  • Send reminders at every step of the collection cycle—including pre-due, early-stage, late-stage, and high-risk—to avoid delinquencies
  • Facilitate two-way, intelligent conversations with borrowers
  • Reduce the load on live agents for routine communication and outreach

24/7 Customer Service with Inbound Conversational AI

Now, let’s move on to the inbound use case.

As you intensify your outreach efforts and increase the number of outbound communications, borrowers will start contacting your business to make payments or inquire about their accounts, and that’s when you’ll know it’s important to augment also your inbound service with Conversational AI.

Conversational AI gives you the ability to reduce wait times to zero seconds and assist borrowers immediately. When you deploy text messaging automation for inbound communications, you offer 24/7 customer service able to assist customers at any time of the day and week.

Offering self-service alternatives to live interactions will positively impact the customer experience (CX).

Augmenting inbound communications with AI enables your live agents to focus on complex queries and important tasks. As the AI solution addresses the low-hanging fruits, your agents are empowered to do their job more efficiently.


If you’re interested in learning more about how Conversational AI can enhance your collections strategy, use the chat tool below to schedule an appointment with one of our experts!


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