debt collection Archives

Beyond Automation: Embracing Conversational AI for Smarter, More Efficient Debt Collections

Posted on September 24, 2024September 24, 2024 by Harshad Bajpai

Over the past year, debt collection agencies have started using Conversational AI as part of their AI adoption strategy to enhance their collection processes. Early adopters have already seen significant benefits from adopting this technology.

Recently, there has been a substantial advancement in the AI industry with the introduction of large language models (LLMs). These models and Generative AI-powered communications are enabling businesses to leverage Conversational AI solutions for even more strategic, personalized interactions with consumers.

This new approach to consumer communication stems from the need for a more focused and optimized collection strategy tailored to each account. By personalizing strategies based on an account’s payment and response behavior, agencies can achieve maximum results with minimal input. This strategy also guides agencies on which channels to use and the optimal times of day for engagement.

Multichannel Conversational AI platform powered by Generative AI represents the next significant leap for the collection industry. In this blog post, we’ll explore how this technology is evolving and how collections can benefit from these advancements.

How is Conversational AI Changing Debt Collections Forever?

Improved Collections with Enhanced CX: Creditors and collection agencies can increase contact rates and engagement levels by leveraging multiple communication channels. This improved communication strategy, in turn, fosters a positive customer experience, as debtors receive timely responses and can resolve their accounts more easily. Enhanced customer experience facilitates debt resolution and strengthens the agency’s reputation and strategic relationships.

Analytics for Optimized Scalable Outreach: With GenAI-powered communications, collection agencies can engage with consumers at scale using a strategy tailored to each account’s payment and engagement history. This approach guides agencies and creditors on the optimal channel and time of day for engagement.

Contextual Conversations Across Channels: Multichannel communications enable collection agencies to interact with consumers through various channels such as voice, SMS/text, and email. More importantly, with Multichannel Conversational AI, agencies and creditors can maintain context across all channels, ensuring consistent and coherent communication.

Compliance and Risk Mitigation: Utilizing a multichannel approach for debt collection not only promotes efficiency and effectiveness but also helps businesses comply with evolving regulations in a fast-changing industry. Every communication is documented and traceable and remains within regulatory limits with centralized consumer interactions.

Agencies can stay compliant in many ways with the multichannel approach for communication with consumers. For instance, the 7-in-7 rule mandates that debt collectors cannot contact consumers more than seven times within seven consecutive days. Similarly, the Mini Miranda rule stipulates that collectors must disclose their identity and the purpose of their communication during contact.

Agencies can drive campaigns through various channels, stay compliant with these laws, or even efficiently track and regulate outreach frequencies with each consumer.

Managing Inbound Queries and Ensuring 24/7 Availability: Multichannel communication ensures that consumer queries are promptly addressed whenever they reach out, be it on weekends or after work hours. Whether it pertains to payments or other inquiries, AI software can answer consumer queries, ensuring zero wait times and seizing every collection opportunity. Chat options provide consumers with a self-serve menu, enabling them to address basic FAQs and clarify queries easily.

Cost of Collection: Multichannel Conversational AI significantly reduces the cost of collection by streamlining workflows, optimizing agent bandwidth, and minimizing manual intervention. By automating repetitive tasks and leveraging multiple communication channels, AI-driven software enhances operational efficiency and reduces overhead costs associated with debt collection processes.

Why You Should Consider Conversational AI

A Conversational AI platform comes with other remarkable benefits. Here are a few:

Minimize Compliance and Legal Exposure

Conversational AI has the potential to improve compliance and reduce the risk of legal issues for agencies. The debt collection space is heavily regulated, and collectors must follow strict compliance rules. With our Conversational AI platform, compliance rules and guidelines such as call frequency, the Mini-Miranda, and other important regulations — both at the federal and state levels — are built into the technology to ensure the Conversational AI solution follows them. Conversational AI never goes off-script and never has a bad day, protecting both the consumers and the agencies.

Identify Underperforming Consumer Segments

With a Conversational AI platform, agencies can balance outreach efforts more effectively by identifying which consumer segments are underperforming. This enables businesses to allocate resources where they can have the most impact, increasing overall collection efficiency.

Establish Better Consumer Engagement

Businesses can identify the optimal channels and times to reach consumers, enhancing engagement. By understanding consumer behavior and preferences, the Conversational AI platform ensures that outreach efforts are more likely to succeed, leading to higher collection rates.

Define Effective Strategies

The Conversational AI platform helps define optimal strategies for collection campaigns, whether through automation, human outreach, or a combination of both. This tailored approach ensures that each campaign is designed to maximize its effectiveness based on the specific needs and behaviors of the target audience.

Forecast Revenue and Recovery

The Conversational AI platform can accurately forecast revenue and recovery rates, helping agencies plan and budget more effectively. It also aids in reducing charge-offs by predicting which accounts are most likely to be collected and focusing efforts accordingly.

Unlock Unprecedented Automation

One of the main benefits of Conversational AI in debt collections is that it automates much of the manual work involved in the recovery process. Debt collectors can use AI to automate tasks such as calling consumers, sending out payment reminders, and recording consumer interactions. This saves time and allows collectors to focus on more complex tasks, such as negotiating payment plans and resolving disputes.

How to Choose the Right Conversational AI Platform for Your Company

Thanks to large language models (such as ChatGPT and Google’s Gemini), it’s never been this easy for Conversational AI providers to build new bots. Since these LLMs are available to all, conversational quality has become a simple function of cost.

Below are some of the things you want to consider when onboarding a Conversational AI platform for your collection operation:

The Conversational AI solution…

Speaks to Your Customer Base: An essential criterion for a Conversational AI platform is that it needs to be able to talk to your customers. If your customers are primarily Spanish-speaking, for example, you need to ensure that your provider has the capabilities to cater to a multilingual customer base.
Integrates to Existing Infrastructure: Personalization is crucial. Your AI provider needs to be able to integrate with your CRM platform, whether you are using Automaster or Dealersocket. Only then can it engage using your customer’s updated information. An integrated platform can also record details of customer interactions in CRM, removing a lot of agent effort.
Processes Payments Securely: The platform needs to integrate with your payment gateway and secure sensitive transaction information to collect payments from customers. The provider should be able to integrate with standard payment gateways such as PayNearMe. You can verify transaction data safety by ensuring that they have PCI-DSS certification.
Is Familiar with the Debt Collection Industry: A referral is always an excellent way to gain trust with the platform provider. You can always find out if your provider is working with any of your peers; either ask for feedback directly from your peers or ask the provider to arrange a reference call.
Offers After-Sales Service: Just like when you purchase a car, it’s important to check if there is an after-sales service for your Conversational AI platform. Ask for SLAs to understand the response time in case of any issues. You should verify if a Customer Success team will be assigned to you. Arrange a regular meeting with the Customer Success team to help them understand your expectations.
Provides a Timeline of Deployment: Before onboarding a vendor, explain your existing call center infrastructure (dialer, CRM, payment gateways) and ask for a timeline of deployment. It is critical to gauge any kind of IT effort or roadblocks to a seamless integration. Extended timelines and extensive IT effort increase costs and lead to loss of estimated value.

Make the Right Choice

Conversational AI technology is remarkable and has proven invaluable in our industry and beyond. With the widespread availability of LLMs, numerous companies are now offering GenAI-powered Conversational AI solutions with various marketing buzzwords.

However, for a collection agency, choosing the right Conversational AI vendor is crucial. They must carefully evaluate their options to gain a competitive edge and achieve tangible results within weeks.

Conversational AI platforms powered by LLMs and Generative AI is poised to change how collections are done in the modern world — don’t miss out!

Are you ready to take the next step toward call automation with Conversational AI? Schedule a free demo with one of our experts to learn more!

What to Look for When Purchasing a Conversational AI Solution for Collections

Posted on September 17, 2024September 19, 2024 by Simone Somekh

You’ve been exploring Conversational AI as a possibile solution to automate your debt collection agency’s operations; you’re considering adopting AI to scale outbound and inbound calls and other interactions for collections. Congratulations—you’re in the right place. What next?

A Conversational AI solution can significantly reduce your business’ collection costs and improve the success rate and duration of your collection campaigns. However, not all AI vendors are the same. How do you choose the right vendor for your company?

Given our extensive experience in the accounts receivables industry and our tech expertise, we’ve put togehter a list of criteria to consider when meeting with providers and choosing the best one to move forward with, from the understanding of your business operations to technical capabilities.

If your Conversational AI vendor doesn’t fully understand the collections space, you’ll end up being heavily involved in every step of the process, causing delays, higher costs, and a disappointing return on investment.

Compliance with Debt Collection Regulations Based on Region

Collections are a highly regulated and litigious industry. The first thing to look for in any AI provider that handles collections is the company’s level of understanding of the existing laws related to collections in your region.

An AI-powered digital assistant handling outbound collection calls and messages can be designed to comply with consistency and precision that human agents can hardly achieve. However, it’s important to check whether the provider is up to date with the current laws.

For example, some of the collections-related regulations in the United States are:

Telephone Consumer Protection Act
Fair Debt Collection Practices Act (FDCPA) and Reg F
Payment Card Industry (PCI) compliance
Health Insurance Portability and Accountability Act (HIPAA)

Some of the regulations for Canada-based collections are:

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

Provider’s Understanding of the Collections Space

This point goes beyond regulations: How well does the Conversational AI provider know and understand the collections space as a whole? Their understanding of the structure and overall operations of a collection agency will be a helpful factor in the collaboration between your business and the provider.

The provider should understand the agency’s structure, the challenges related to employee retention and call scalability, and the best practices for outbound collection calls. This way, you can trust that they will design an optimal conversation flow to facilitate your collection efforts.

Different factors, such as the type of debt and the age of the debt, may affect the conversation design.

Ability to Handle End-to-End Conversations

The Conversational AI solution needs to be able to handle interactions with consumers from start to finish, without any human intervention, from verifying the user’s identity to completing, to answering frequently-asked questions and completing a transaction.

The solution must be able to handle human-like, two-way conversations; its capabilities should include:

Right-party contact (RPC) verification
Promise-to-pay (PTP) capture
Payment collection, either on-call or via SMS link to payment gateway
Dispute handling
Settlement and payment plans negotiation

Whenever the consumer requests it or the AI solution is unable to assist, the interaction should be transferred to a live agent; however, whenever that’s not needed, the solution should be capable of handling a variety of scenarios.

Seamless Omnichannel Capabilities

To offer an outstanding customer experience and maximize recoveries, collection agencies nowadays must offer omnichannel communications, empowering consumers to interact through their preferred channels, such as voice, chat, text messaging, and email. The best practice is to meet consumers where they are, offering the convenience of self-service they expect from financial services organizations.

Voice AI is the most engaging medium among automated communication channels, and can automate phone interactions optimizing the frequency and timing of each engagement.

AI assistants can also be deployed via SMS, chat, and email, offering cost-effective solutions for businesses and convenient channels for consumers. Many consumers nowadays prefer to interact via text messaging, as they enjoy the convenience of responding whenever they want.

Omnichannel capabilities enable collection agencies to identify the best channel to contact various segments of consumers and leverage a mix of channels in a strategic manner. The solution must be able to retain context across channels, so that a consumer can start a conversation on one channel and continue it on another without losing any context.

Comprehensive Integration Ecosystem

When you adopt Conversational AI, you need to ensure it fits into your tech stack to streamline rather than complicate your collection operations. You should therefore be able to access a wide range of integrations with your other tools, such as your CRM, telephony system, SMS provider, payment gateway, and spam monitoring solution. This ensures a smooth, unified approach to consumer interactions, enhancing efficiency and effectiveness across all channels.

Actionable Analytics

Once the Conversational AI solution goes live, will you be able to easily visualize and analyze its performance and results?

As more and more users interact with the digital agents across various channels, you can gather precious data that you don’t want to waste. Your Conversational AI vendor should give you access to a dashboard to monitor the effectiveness and quality of the conversations. Actionable analytics will empower you to optimize your recovery strategy and improve your success metrics.

After Go-Live: Continued Voice AI Training

After your Conversational AI platform goes live and begins interacting with your consumers, the work is far from finished. The solution must be maintained and the technology should be further optimized to improve the conversational experience. Monitoring the solution, especially at the beginning, is needed for quality assurance purposes.

According to a recent Gartner report, failing to monitor automation tools in post-production is one of the most common mistakes companies make when implementing automation.

Additionally, it’s important to note that Conversational AI solutions are typically rolled out in multiple phases: with time, additional capabilities and use cases may be added.

Therefore, your agency will want to work with an AI provider wthat hasa clear plan for post-go-livetraining and handling.

In conclusion, watch out for these key questions to ask your Conversational AI vendor.

For more information and a free demo, you can schedule a call with one of our experts. We’ll be happy to help!

What Is Call Automation and How Can It Impact Debt Collections?

Posted on November 14, 2023July 8, 2024 by Simone Somekh

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 for Debt Collections?

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!

Skit.ai’s Augmented Voice Intelligence Platform Takes a Giant Leap with Generative AI

Posted on May 25, 2023January 18, 2024 by Harshad Bajpai

Skit.ai’s Augmented Voice AI Platform is now powered by Generative AI. With the incorporation of Generative AI, we are taking a giant step forward and boosting the capabilities of our Conversational Voice AI solution. The interactions with consumers are about to become more natural-sounding and complex, leading to an improvement in customer experience (CX) and better results for collection agencies using Voice AI.

At Skit.ai, we embrace the future and go beyond industry standards and expectations.

How Generative AI Impacts the Capabilities of Skit.ai’s Augmented Voice Intelligence Platform

With the ongoing application of large language models (LLMs), we are seeing a big jump in the conversational capabilities of our solution:

Higher Conversational Accuracy: LLMs are capable of understanding consumer interactions through an improved understanding of context, sentence parsing, and response accuracy, leading to significantly higher conversational accuracy.

Better Handling of Complex Conversations: Generative AI enables our voicebots to better handle more complex interactions that were earlier escalated to human agents. This improvement can reduce the percentage of call transfers from the Voice AI solution to the company’s human agents.

Out-of-scope Calls: The LLM’s ability to grasp a wide range of questions and topics enables our voicebots to better handle out-of-scope utterances and calls.

Natural Utterances: The Voice AI solution is able to express a wide variety of natural-sounding utterances that improve the quality of the interaction.

Faster Voicebot Creation: Incorporating Generative AI give a big boost to the speed at which new voicebots can be created as the inherent complexity and effort involved in the design, and creation is a fraction of earlier effort.

Massive Performance Gains with Generative AI Springboard

In addition to the massive gains we are seeing thanks to LLMs, we intend to take this exercise even further and enable our voicebots to outperform human agents and collectors.

Going Beyond Human Agent Performance

An agent’s performance rests on two things: the ability to communicate and technical skills. At Skit.ai, we’ve seen that, with current LLMs, we can achieve superlative communication skills, and by training extensively with end-user data, we can achieve a high degree of technical skills. Hence our solution can excel on both fronts.

To share a rough estimate: the best-performing agent finds success on 5% of the calls (out of all connected calls), while low performers convert about 2% of the calls.

With Generative AI, we take a big jump. From the current voicebot conversion capability of around 1-2%, we expect the performance to jump 3-4 folds. Beyond this, our Reinforcement Learning platform learns from outcomes to personalize the conversation to figure out the ideal strategies, learning from thousands of daily conversations.

Better and More Natural Spoken Conversations

Generative AI, with its unparalleled conversational capabilities, needs to be complemented with equally capable speech synthesis and understanding systems that produce the right speech given the output from LLMs. And that is one of the major areas from the many below:

A more natural-sounding TTS (text-to-speech) voice
Conversational context handling prosody of generated audio
Full duplex and backchannels in speech conversations

Ultimately, we will be able to deliver the most engaging conversations that delight consumers by solving their problems faster and better than human agents.

The Business Outcomes of Incorporating Generative AI

Below are five major impact areas we will move the needle on:

Higher Collection Rate, ~5%: This is a difficult number to quantify, but as the incorporation of Generative AI matures, we expect its collection capability to move beyond 5%, surpassing even the best of human agents.

Lower Agent Dependency, reduction by 50-80%: As the voicebot will be able to handle more complex queries, we expect a 50-80% reduction in agent touch points.

Higher Resolution Rate, ~100%: Better accuracy and conversations with higher engagement will help us achieve a conversational resolution rate close to 100%.

Creating New Voicebots: The effort to create new voicebots will see a significant dip, as the complexity will be remarkably lower.

Entering New Markets with Ease, 15X faster: Entering new markets and training for new use cases and applications will require less effort and resources. We are estimating the process to be 15X faster.

What’s Next

Though the improvements in our Augmented Voice Intelligent Platform are visible and clear, we will further our efforts to achieve greater performance gains and stay ahead of the curve.

To learn more about how Voice AI can help support your collection efforts through call automation, schedule a call with one of our experts using the chat tool below.

An Unbiased Look into the Positive Side of Voice AI

Posted on May 25, 2023August 24, 2023 by Harshad Bajpai

Artificial intelligence is experiencing exponential innovation. Generative AI, ChatGPT, DALL-E, Stable Diffusion, and other AI models have captured popular attention, but they have also raised serious questions about the issue of ethics in machine learning (ML).

AI can make several micro-decisions that impact such real-world macro-decisions as authorization for a bank loan or be accepted as a potential rental applicant. Because the consequences of AI can be far-reaching, its implementers must ensure that it works responsibly. While algorithmic models do not think like humans, humans can easily and even unintentionally introduce preferences (biases) into AI during development and updates.

Ethics and Bias in Voice AI

Voice AI shares the same core ethical concerns as AI in general, but because voice closely mimics human speech and experience, there is a higher potential for manipulation and misrepresentation. Also, people tend to trust things with a voice, including friendly interfaces like Alexa and Siri.

Call automation for call centers and businesses is not a new concept. Unlike computerized auto dealers (pre-recorded voice messages) like Robocall, Skit.ai’s Voice AI solution is capable of intelligent conversations with a real consumer in real-time. In other words, Voice AIs are your company representatives. And just like your human representatives, you want to ensure your AI is trained in and acts in line with company values and displays a professional code of conduct.

Human agents and AI systems at any given point should not treat consumers differently for reasons unrelated to their service. But depending on the dataset, the system might not provide a consistent experience. For example, more males calling a call center might result in a gender classifier biased against female speakers. And what happens when biases, including those against regional speech and slang, sneak into voice AI interactions?

In contrast to human agents, who might sometimes unintentionally display biases, Voice AI follows a predetermined, inclusive script while strictly adhering to guidelines that prioritize consumer satisfaction and compliance. This level of professionalism eliminates the potential for misbehavior and creates a positive consumer experience.

Our team is always potentially looking out for any potential bias that accidentally seeps in, as ‘biases’ as constantly evolving. One thing can be acceptable today, but may bee seen as a bias tomorrow. At Skit.ai our skilled team of dedicated designers meticulously construct the dialogue patterns to guarantee balanced responses. Following these predefined scripts allows our Voice AI solution to offer consistent, unbiased interactions, thus establishing an inclusive user experience. This emphasis on conversation design aids us in overcoming potential biases that may surface in human interactions, thus securing a more balanced and impartial user experience.

Consumer Convenience and the Growing Preference for Voice AI

Consumers increasingly prefer interacting with Voice AI rather than human agents due to the convenience it offers. Voice AI allows users to communicate naturally through voice commands, eliminating the need to type or navigate complex menus. This convenience aligns with the preferences of many individuals who find it easier and more natural to speak rather than type. Furthermore, Voice AI is available 24/7, providing round-the-clock support without the need to wait for human agents.

This instant access to information and assistance enhances consumer satisfaction and can lead to faster issue resolution. Additionally, voice interactions can be personalized and tailored to individual preferences, creating a more personalized and engaging consumer experience. The convenience and preference for voice-based interactions make Voice AI a valuable tool for meeting consumer expectations.

Building Ethical Voice AI

Empathetic conversational design eliminates bias. At Skit.ai, we’re dedicated to developing leading-edge Voice AI technology. Our mission is to facilitate communication that is equitable and devoid of bias. Through conversational design, biases are eliminated, ensuring fair and inclusive interactions. A significant part of our strategy involves refining the conversational capabilities of our systems, striving for a natural, seamless exchange of speech that ensures equal treatment for all and eradicates discriminatory tendencies. As we navigate the future of work, Voice AI stands as a valuable tool, empowering enhanced communication, fostering seamless consumer conversations, and further elevating customer satisfaction.

To learn more about how Voice AI can help support your human resources and scale their collection efforts with call automation, schedule a call with one of our experts or use the chat tool below.

Tackle Agent Productivity in Debt Collection Agencies Using Voice AI

Posted on November 25, 2022February 5, 2024 by Harshad Bajpai

For debt collection agencies, debt recovery is a labor-intensive effort that typically relies more on human effort than capital investments. Even with the adoption of newer digital communication tools that promise to scale manual efforts, the ARM industry invariably struggles with one major issue — human resource turnover.

Across all industries, average attrition rates in contact centers vary between 30 to 40%.

It’s hard to know the exact attrition rate in the ARM industry. Agencies reported a monthly quit rate of 2.9% in 2021. Before the pandemic, in 2016, large collection agencies reported experiencing an average turnover rate of 75% to 100%, according to the Consumer Financial Protection Bureau.

The high attrition that characterizes the collections space makes third-party debt collection agencies vulnerable to several challenges, like loss of domain expertise, risk of non-compliance, lawsuits, and increased cost of hiring and training new talent. In the United States, with nearly one in four citizens having at least one debt in collections, recovery has become an increasingly costly endeavor.

Most Common Reasons for Collection Agent Attrition in the Debt Collection Industry

Here are some of the most common challenges that make it so difficult for agencies to retain collectors:

Too Many Accounts, Too Much Work: Given the growing debt delinquency in the U.S., one can only imagine the amount of verification and debt-related communication work that can drive collectors to overwork.
Collectors’ Commission is Dependent on Recovery: Third-party debt collection agencies are involved when credit card issuers or creditors’ collection representatives cannot recover overdue balances. Collection agencies face thinning profit margins, and human agents’ commissions for debt recovery further burn holes in their pockets. There is no set rule or guarantee on the time the human agents need to recover outstanding loans successfully.
The Great Resignation: While all contact centers face high attrition rates, many people have been rethinking their careers and seeking opportunities in new fields over the last two years. This also applies to the ARM industry, where collection agents face acute stress from chasing after customers over the phone while adhering to a wide array of regulations, making attrition an even bigger challenge.
Empty Promises to Pay: It is common to find consumers dodging debt-related interactions. When confronted directly, they are likely to make promises to pay that may only sometimes be honored, which is another detractor for collectors to stick to their roles.
Debt Shame: Debt collection calls are direct and can sometimes make the debtors uncomfortable delving into the details of their unpaid loans. According to a study by Webio, people can be much more honest when communicating via text messages than in voice interactions for difficult scenarios. In the case of debt collections, textual conversations can reduce stress for both debtor and collector.
Efforts Often Don’t Justify Conversion Rates: When it comes to debt, the devil is in the details. To invest too much attention and time in each customer who needs a detailed overview of their loans and debts is unrealistic. It is extremely costly and leads to operational overkill, another reason for collectors’ resignation.
Debt Collection is Not for Everyone: Employee turnover in any field results from the nature of the job/employer and the employee’s capabilities. Working conditions, perks, quality of work, and benefits will fix the collector’s morale. But employees’ capabilities for the job determine how much they are willing to stick to it.
Rapid Changes in Regulatory Framework: Many regulatory agencies like FTC and rules like Fair Debt Collection Practices Act dictate how collection agencies can approach consumers without violating consumer protection laws. It requires constant staff training and procedural approaches like obtaining debt verification requests, debt validation, forbearance, and foreclosures that rely on unique expertise. When agencies adopt a manual route or use restrictive debtor communication methods, errors and inaccuracies are expected.

The Rising Role of Voice AI in the Debt Collections Industry

These challenges highlight the urgency for digital transformation in collection agencies; in particular, agencies are looking at automation as the primary solution to their attrition crisis.

In our previous articles, we discussed the unique capabilities of Voice AI technology in reducing contact center agent labor costs via call automation. Concurrently, Gartner’s estimates from their survey also suggest that labor expenses represent 95% of contact center costs, and adopting Conversational AI helps cut expenses by $80 billion. The customer-facing side of ARM, particularly the debt collection agencies, can capitalize on this trend to reduce staff shortages, curb labor expenses and make human resources more efficient and effective.

Skit.ai’s Voice AI platform is at the forefront of transforming the ARM industry with its Digital Voice Agents and augmenting collection agencies’ workforce to focus on resolving complex use cases.

Voice AI’s value-adds are in areas that impact collectors’ productivity and bandwidth which further determine talent retention in this space. Here’s the rundown of its merits that help address agent attrition challenge in the debt collections industry:

End-to-end Call Automation: Voice AI helps automate 70% of calls (inbound and outbound), allowing prompt query resolution. Also, agencies can leverage automation to identify consumers, policy numbers, and other debt-related information. This reduces the effort and time it would take to call and follow up with each debtor manually.
Reduce High Cost of Collection by 1/5th: Digital Voice Agents that plug into contact centers and take over calls by holding human-like conversations can execute calls at less than 1/5th of the actual cost of manual calls. Collection agencies can lower operation costs with intelligent voice agents in lieu of collectors by concurrently calling over thousands of defaulters.
High Scalability: Agencies can scale their debt collection efforts and consumer outreach by leveraging call automation and Digital Voice Agents that can handle and answer tier-1 caller queries by automating up to 70% of calls, reducing dependency on human agents.
Higher Portfolio Coverage Intensity: Collectors can cover many more debt files when they leverage Voice AI’s ability to handle multiple calls simultaneously. With minimal effort, cost and time, agencies expand their scale of reach of debt collection practices with minimal human intervention.
Strict Adherence to Compliance: Fear of lawsuits or going off track by the debt collectors will be alleviated by the Voice AI platform, which is purpose-built and specific to the domain and use case. Digital Voice Agents can be tailored to hold and attend calls as per the laws governing consumers’ preference for call frequency, tone, language, and time to receive debt collection calls.
Solve Diverse Use Cases: The recovery process in the collection agencies involves rigorous reviews, checking outstanding balances, sending demand and acknowledgment letters, and arranging for telephone contact. It is humanly impossible to keep track of all details, numbers, and sensitive information about different types of debt and cases at their fingertips. Digital Voice Agents can be optimized to address various debt-related queries and use cases without time, cost, and human effort constraints, reducing work stress and dissatisfaction for debt collectors.
Enhance Human Agent Productivity: Debt collectors can experience higher and faster conversion levels by leveraging Voice AI’s analytics and caller data insights. The pre-call verification, call automation (inbound and outbound), and routing features enable real-time agent augmentation, boosting productivity and performance. Also, the Digital Voice Agents are capable of intelligent call transfers to human agents only for complex cases, allowing the human workforce to focus on efforts that help retrieve debts faster.
Voice AI Calls are Free of Human Biases: Holding debt recovery conversations is a sticky collection practice that most consumers tend to avoid out of pressure, discomfort, shame, and fear of judgment. Voice AI’s call automation capability eliminates direct voice interaction between defaulters and collection agents, making collection calls free of human biases. Also, Digital Voice Agents can hold persuasive, contextually accurate, and proactive conversations and keep interactions direct and objective. This way, collection agents can experience higher work quality without job stress, dissatisfaction, and the chances of misdemeanors while talking to consumers.

Collection agencies rely entirely on outstanding loan payments to survive. Voice AI helps collection agencies strike a balance between meeting their recovery targets and making debt collection efforts more intuitive in a way that doesn’t come at the cost of operational burnouts and resignations. Voice AI eliminates bottlenecks in debt recovery and improves the overall customer experience.

To learn more about how Voice AI can help you solve attrition challenges, schedule a call with one of our experts or use the chat tool below.

How Voice AI Helps Debt Collections Companies Improve Top and Bottom Lines

Posted on October 19, 2022August 24, 2023 by Harshad Bajpai

Many debt collection companies are evaluating emerging technologies and looking into digital transformation. You can’t blame them: due to a faltering economy, rising costs, and high agent attrition, new processes and solutions are needed.

As a result, within the next three years, one in every ten interactions with call center agents will be voice bots driven, according to the new Gartner report. These findings are directly attributable to the spectacular rise to the advances in conversational artificial intelligence (AI), along with the mounting challenges we detailed above.

The report also estimates that by 2026, Conversational AI could save about $80 billion in labor costs! That is a significant number, indicative of the merits that early adopters will have in terms of cost, CX, and expansion of top and bottom lines. But, starting early is key to competitive advantage.

It is an open secret that high human agent churn is due to the fact that most calls are low-value and tediously repetitive. By handling these calls, Conversational AI will make the agents’ jobs more exciting and fulfilling, allowing them to focus on high-value and complex calls.

Globally, there are approximately 17 million contact center agents, and their cost makes up 95% of contact center costs. By intelligent call automation led by voice-intelligent technology, Voice AI, a big part of unproductive calls can be taken over by Digital Voice Agents, yielding high cost and CX advantages.

The Direct Cost and Efficiency Benefits of Voice AI for Debt Collection Agencies:

The most significant takeaway for the debt collection agency is that the benefits of Voice AI implementation are tangible and quickly realizable. But before we go into stats, here is a simple explanation of what essentially happens in a debt collection agency when they deploy a voicebot.

Voicebot Functioning

A voicebot is a conversational Voice AI application that can understand what the customer is saying as it is trained for a specific customer problem. It can strike a meaningful conversation with the customer. This happens because the entire conversation design has been done keeping in mind all the possible difficulties a customer can encounter.

So for every customer query, the voicebot has a ready answer as it pulls out relevant information from the client system and informs the customer, cutting the duration of the conversation remarkably.

Digital Voice Agents (DVA) Vs. IVRs: It is worth mentioning here that DVAs are remarkably different from IVRs; in fact, there is no comparison between the two. DVAs are at the cutting edge of the technological spectrum, while IVRs are legacy technology.

IVR can not converse. It is an unintelligent technology that runs a tedious exchange of inputs and outputs. For something as sensitive as debt collections, it is remarkably unsuitable.

Digital Voice Agent is AI-powered, built on Spoken Language Understanding (SLU) and context-rich conversational designs.

Dive deeper: The difference between Digital Voice Agents and Outbound Robocallers

For a debt collections company, the two main categories of calls are Inbound and Outbound. Here is the process of value creation:

Inbound Calls: Many agencies cannot process a significant portion of customer calls. From them, a tiny fraction of customers have called to pay and perhaps need guidance.

Answering Non-revenue Generating Calls

The data from various sources is precise: A majority of calls are so simple that answering them by a human agent does not add any value to the company.

We’ve discussed the value of adopting a Digital Voice Agent for call automation. If you want to learn more, take a look at our Resources page, in which we regularly explore current topics related to the ARM industry.

Understanding the Top and Bottom Line Impact of a Voice AI Solution on a Debt Collection Company

The Final Word

Voice AI has proved its capability in bringing about a transformation of contact centers either with a small team or a big one. As its adoption increases, it will become a technology that can deliver sustainable cost advantages as well as a competitive advantage.

Refer to our Voice AI page for more information about its transformative potential.

Book a demo with one of our experts-www.skit.wpenginepowered.com

Crafting a Digital-First Debt Collection Company by Becoming Voice-first

Posted on September 9, 2022September 9, 2022 by Harshad Bajpai

The need for digital transformation (DX) can hardly be overemphasized. The need for DX and automation is becoming more conspicuous in the debt collection space. Globally, companies are expected to spend a whopping $1.8 trillion on DX technologies, and what’s more incredible is that DX spending will sustain the momentum and grow at a whooping CAGR of 16.6% between 2021-2025 (IDC DX spending guide).

While the investment and gung ho surrounding DX are real, typically, companies find it hard to succeed at DX, and further challenging is to sustain that success. Only ⅓ of companies succeed at DX, and a much smaller fraction has been able to sustain that success. This blog focuses on one technology that has proven to have a high business impact, and success rates, while being easy and quick to deploy, i.e., Voice AI.

Debt collection space has not remained insulated from the recent tumultuous years. The industry is amidst epochal changes as challenges mount in 2022. The overall grim economic forecast, inflation, and frequent regulatory changes make it imperative for debt collection companies to transform. In 2010, U.S. businesses placed $150 billion in debt with collection agencies, who could collect just $40 billion of that total. On delinquent debt, the industry averages a 20% collection rate, a decrease from 30% a few decades ago.

Technology is the only potent tool capable of overcoming core challenges and transforming debt collection companies.

Ironically, 7 in 10 U.S. small businesses put off technology decisions and are invested deeply in day-to-day tasks, according to a 2021 study from Xero, a global small business platform. The implications of this are clear–companies will not be able to incorporate technology that is vital to their long-term survival. No wonder the majority of DX efforts result in digital grief. Hence the discussion on a technology that brings about quick and easy transformation is vital. But first, let’s deep-dive into the challenges that are crippling collection agencies.

As CXOs look forward to improving the performance of debt collection agencies, here are the core problems they are trying to solve:

Efforts have been made to solve these problems, emanating out of 8 core challenges:

What Digital Transformation (DX) or Being Digital-first will do?

DX is essential if a company wants to thrive in the long run. But it is a precarious journey, and only when prudent technology incorporation is done, it brings about positive outcomes.

For the same purpose, we delve into the nuances of technology that a debt collections agency can incorporate. Post transformation, debt collection agencies can leverage technology to be more agile, more efficient, and automate most of their processes.

Technologies Enabling Debt Collection Companies

We have classified the technology into two parts – Those that help in communication and customer support. and those that support the business function.

A. Customer Support Technologies

i. Voice-Based Conversation Technologies

We can look at voice-based technologies from a standpoint of their newness. This is important because most debt collection companies have to decide what to upgrade, integrate and replace.

Dialers and Telephony
IVRs
Voice AI or Voicebots
Voicemails
Voice Analytics

The larger discussion here would be about legacy systems. Dialer and telephone are very important and can be of great value if they are on the cloud. IVRs are still useful, but are equally frustrating, so a decision to either replace them or upgrade them is a big one. Voice analytics is a new and emerging tech, and debt collections companies will benefit if they leverage it. We will discuss Voice AI in detail, as the potential for value creation is incredible.

ii. Text-Based Conversation Technologies

They have been the oldest ones and have also been a part of legal mandates. These technologies are a significant part of interactions with customers, notifying them at the right time.

Chatbots and Text Messages
Using Email in Debt Collection

Text messages have been a vital part of debt collection as they are mandated by regulations. Chatbots are new and are improving rapidly, but since debt issues are complicated, it is not the favored go-to modality for problem resolution.

B. Technologies Supporting Business Function

These technologies power the business function of debt collection agencies and help them operate at better operational efficiency and agility.

Collections CRM for Debt Recovery
Debt Collection Compliance Software
Payment Gateways

They are very essential and can help debt collection agencies perform operationally better.

Analysis of Cost Structure

To assess the impact of technology, it will be necessary to analyze its impact on cost and revenue. Typically the cost structure of a debt collections agency is like this:

Even a cursory look at the graph makes it abundantly clear that wages are the most significant element of the cost structure, ranging near 42%. Hence a technology that helps debt collection agencies minimize this cost via automation will have a significant impact on the structure of collections agencies.

Call Automation via Voice AI

Voice AI is the most disruptive technology of our times since it automates the most expensive part of contact center operations – calls and conversations.

It is one-of-its-kind technology that can enable debt collection companies to make complete calls without requiring a human agent. Lately the Voice AI technology-based SaaS platforms have become quite affordable and quick to deploy. Hence are creating large competitive advantages for early adopters.

AI-enabled Voice Agents have been optimized to understand spoken language and strike intelligent conversations. The voice engine picks up not only what the customer is saying but also the semantics of the conversation.

Perhaps it is the most disruptive of all the present technologies as it is empowered to answer customer calls, and can reach them out independent of human agents. They are also excellent at updating customers and adhering to compliance requirements. They are proven to cut costs and improve agent productivity and collections rate.

Solving the Biggest Challenge – Automating Voice Conversations

A major chunk of the cost of a debt collection agency involves human agents’ salaries and similar expenses towards that end. Today, for the first time, companies have the technology to automate voice conversation and make calls possible without the need for human agents for as much as 70% of call volume.

We are in this section to delve deep into this new era of technology that will help companies transform truly.

Listen to Skit.ai’s Voicebot in Action

Voice AI Software for Debt Collections Industry | Skit.ai

The rapid rise in call volumes, defaults, demand for remote resolution of disputes, and diminishing CX have resulted in collection agencies scrambling to catch up.

The need for better outbound collections efforts—along with managing increasing volumes of inbound inquiries from customers—is putting pressure to scale contact center teams, an undesirable and herculean task.

Call center turnover (30 – 45%) has always been a challenge and has generally been twice as high as the industry average (13.5 – 18.5%), while collection agencies perform worse, with some reporting as high as 100% employee turnover. The concatenation of these factors—higher call volumes, regulations, and agent turnover—has made companies lookout for technology solutions such as Voice AI-enabled contact center automation.

Let’s compare the challenges collections agencies are facing to how a conversational AI-enabled Intelligent Voice Agent meets every challenge.

Beginning the DX Journey With Voice AI

Of all the technologies, the deepest impact has been seen with the deployment of Voice AI. This is because a major part of what a debt collections company does is conversations and automating them is going to create an unprecedented amount of value.

Once a voicebot or Voice AI agent is deployed, here is what that happens:

Automated campaigns with clear data documentation
Clear capture and documentation of the disposition/intent
No breach of compliance as the virtual agent stays true to script
Handing the same volume of calls with a much smaller human agent team
Improve compliance adherence by Voice AI strict adherence to scripts, timings, and regulatory changes
Immediate cost savings and revenue expansion

7 Reasons to Adopt Voice AI For Debt Collection

Augmented Voice Intelligence or AVI is the blend of Conversational AI and human intelligence. It creates meaningful conversations with customers to support them throughout their entire collection journey while adhering to compliance and regulations. Let’s delve deeper into the 7 core reasons:

Read in detail about these reasons in this Article

Here are a few outcomes contact centers have been able to achieve and are equally applicable to debt collection agencies:

Near 50% reduction in contact center operational cost:
- Debt collection companies can work with a small team of human agents and handle the same amount of accounts. This is due to the automation as a majority of calls by Voice AI Agents.
- The debt collection companies save on the hassle of recruitment and large wages.
- The voicebot would also help companies cut down on agent commissions that typically range between 20-25% of the agent’s fixed compensation and is paid over and above the fixed component. This happens because the voicebot can enable payments without the need for human agents or does end-to-end automation. The higher the proportion of the payments the voicebot enables, the higher will be the saving on agent commissions.

Over 35% automation of customer support efforts:

For a debt collections company, the split–80% (Outbound) and 20% (Inbound) holds true. Let’s look into the proportion of call automation:

Inbound: Though it depends upon the number of uses the voicebot is trained for, at an evolved stage, it can handle as much as 70% of total inbound calls. Escalating only the complex cases to human agents. Also, even if the call is escalated, the voicebot will capture the intent and establish the right party contact before transferring the call to a human agent. This adds value and saves agent time, and this reduces the cost.
Outbound: Typically a voicebot will make multiple rounds of calls for the entire database before it can capture the soft PTP (propensity to pay). Only on the select accounts, the human agent will make the call. In many instances the voicebot does the job, in the same manner, a human agent would and thus creates value by replacing his effort. For instance, it can successfully establish:
- Wrong party contact
- Call back
- Debt dispute
- Reminder calls
- Capturing disposition to pay
- And more.

About 40% reduction in Average Handling Time

Overall companies across industries have observed a drop in average handling times. This is because even in most simplistic use cases the voicebot will verify the consumer, identify his/her intent, and summarize the interaction. This helps the human agent close the query faster.

Smoother Recovery with Better CX

Making the right call, to the right person at the right time makes a world of difference in collections space. Voicebot with its meticulous follow-ups, with the right message, can help customers make payments more conveniently. Hence companies see better recovery with better CX.

The Most Comprehensive Guide on Selecting a Voice AI Vendor

Conclusion

When going for DX, a piecemeal approach is the best. It is most prudent to start with technology with the biggest impact on the performance of the company and has the highest ROIs. But concurrently it must be easily accommodated into the current process with slight modifications. Voice AI possesses all the qualities, making it an ideal point to begin the DX journey.

AI-enabled Voicebots such as Skit.ai’s Digital Voice Agent thus has helped companies transform their contact centers with positive business outcomes.

For any questions on selecting the right Voice AI vendor and the technology, please schedule a meeting on www.skit.wpenginepowered.com