How chatbots and automation supports debt collection

Can you believe that the very first chatbot was created in 1966? This makes the technology older than the internet. Admittedly it did take many years to flourish however it was not until 2016 when Facebook allowed developers to place chatbots on Messenger that we saw a turnaround in the use of this technology.

However, chatbots still had a poor reputation. That is until the pandemic hit the world. The increase in self-service solutions that were supported by virtual assistants impacted industries from online shopping to financial services with companies being forced into change.

Research shows that consumers are eagerly turning to chatbots to handle minor issues or when they are in a hurry. People do not mind if they're served by a chatbot if the bot responds to their questions in real time and helps them resolve their problem.

62%

of consumers would prefer to use a bot rather than wait for a human agent to answer their requests (Tidio)

74%

of internet users prefer using chatbots when looking for answers to simple questions (PSFK)

65%

of customers are comfortable handling an issue without interacting with a human (Adweek)

The debt collections industry is one industry that did not jump on the demand from consumers for more self-service solutions. The few debt collection agencies that embraced chatbots and automation, saw improved recovery rates. Since we launched our bot Viva, we saw an 80% automation of customer interactions and below are 3 main benefits we see from this technology;

Put it simple, consumers prefer interacting with virtual assistants over speaking with a live agent.

Having to speak to a human about one's financial situation can be embarrassing. Even more so when an individual is not able to pay. Call-center agents in the debt collection industry often talk about how uncomfortable the conversation is for both the agent and the debtor. It places significant stress on the individual which usually results in them avoiding making contact.

Today we see more of a preference from consumers to interact with a bot rather than speak with an agent. An automated chatbot is impersonal and non-judgmental. Through a series of questions, a bot can help an individual answer questions or determine a solution that helps them. Of course, if a human agent is required, the transfer is seamless.

The other benefit is convenience. A major reason we created Charlie was due to the fact we identified many consumers who were trying to contact us outside office hours. Charlie is available 24/7 and in different languages. This gives the consumer the flexibility to manage their cases whenever it's convenient for them, as opposed to being interrupted at work by embarrassing calls from debt collectors.

Perhaps the biggest factor in the rise of chatbot popularity is that a chatbot provides a platform that is recognisable to most people - especially the younger generations. People prefer to message rather than call. I see this in my own son who does not want to deal with long waiting times. Virtual assistants provide the instant gratification that we all have come to expect in a digital world.

Fact is, chatbots work for debt collections because it saves them time which means it saves them money.

Charlie has seen us automate 80% of front and back-office activity. When we first launched the service nearly 2 years ago, we defined a bot that would automate the simplest of tasks. However as Conversational AI has developed and become more sophisticated, we increased the capability of Charlie in supporting consumers with creating payment arrangements, filing a dispute to technical support with our FinView mobile app.

Anything which creates high levels of stress causes people to delay or avoid. Chatbot automation provides a non-confrontational, low-stress environment that nurtures the individual on a journey. Better still, the average chat takes between 30 seconds versus a call to an agent taking on average over 2 minutes (exclusive the waiting time).

So chatbots helps consumers save time but they also help debt collection agencies save time and money as well. Many companies are struggling with recruiting. Jobs in call centers are not attractive and so companies have to deal with retention issues and sickness. Automated chatbots do not require a HR department or issues with employee satisfaction. They work 24/7 and is the perfect solution to help reduce costs.

Conversational AI is driving debt collection results through increased engagement with more personal interactions.

Improving customer engagement in the debt collection process is key. Chatbots like Charlie are successful because they can personalise messaging which results in more payments being made or plans being created

The fact remains that a bot is also a data collector. It is constantly gathering information from the way a consumer responds, their intention to even their state of mind. This data is used to improve engagement for future interactions. Better still, when a bot does not recognise an interaction, it has a fallback process which teaches it for the future.

DebtCo's own experience is that we have seen more than 2000 interaction improvements being added to Charlie. This has seen chats being handled faster and an improvement in a bot successfully achieving its mission.

Conclusion

Conversational AI and automation in the debt recovery industry has shown that by increasing customer service and engagement, you are able to improve recovery rates. Providing a non-threatening, stress-free environment keeps the consumer engaged in a conversation which is faster, better, and ultimately cheaper than the more traditional methods.

About Us

DebtCo is the only globally recognised self-service commercial debt collection agency you need for payment collection woes. We have developed an innovative digital debt collection platform that can take care of all your collection problems, regardless of your industry. You can reach out to us at 01376 800 592 or request a meeting to know more about our business debt collection in UK.

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