• The Future of Debt Collection

    The Future of Debt Collection

    Image credit: Freepik

    Since the pandemic, debt collections have progressed at a rapid rate, where consumers today are expecting more flexible and streamlined financial services. Aggressive phone calls, messages, emails and stern letters are becoming less effective. Rather, it is becoming more important than ever for financial institutions (FI) to take a more proactive and empathetic approach in collecting and recovering debts. Debt collection agencies and departments need to evolve and refine their collection and recovery strategies to keep up with the times. 

    In this article, we will look at the biggest trend that will make an impact in the debt collection industry and how your company can take advantage of these trends moving forward. 

    Improving user experience through customer self-service

    Digitalisation has changed the way consumer behaves, and consumers now prefer the option to see, monitor and resolve their debts on their own without the involvement of debt collectors. Self-service technology makes this possible by giving consumers the flexibility to serve themselves anytime, anywhere. At JurisTech, we have Juris Concierge, a customer self-service portal that enables customers to make their payments through any device regardless of time and location. 

    Companies and organisations are deploying self-service technologies in order to improve many areas of their debt collection process, especially in increasing collection rates and managing their time and resources effectively. This way, collection departments and agencies will be able to be more productive as customers are able to serve themselves, especially for simple, high-volume tasks such as making a repayment. After all, an improved customer experience may lead to better debt collection and recovery rates. 

    Using Artificial Intelligence (AI) to track customers and make predictions

    If you are not tracking your customers effectively, the chances of experiencing delinquencies are high. Many defaults can be avoided if businesses are better equipped with tools to predict the issues before they arise. Utilising artificial intelligence (AI) and machine learning (ML) in the debt collection strategy will provide financial institutions with the opportunity to forecast possible delinquencies and default rates. Besides that, collection systems that are embedded with AI and ML are able to make more accurate predictions as well. 

    With the information at hand, FIs can create personalised collection strategies, such as contacting customers based on the optimum time determined by AI and automating them to improve collection rates. So, if you’re not using AI or ML in your collection process, you’re missing out. 

    Automating processes

    As mentioned previously, embedding AI and ML in your collection strategy enable process automation. Debt collection and recovery is a repetitive, heavy process and when performed manually, the task is highly laborious, resource and time-consuming and is prone to human error. This is where process automation comes into play. Process automation gives financial institutions a competitive advantage as it facilitates end-to-end automation of debt collection and recovery processes, enabling them to manage loans and accounts efficiently. 

    For instance, companies can enable automation to handle simple service inquiries or consumer concerns regarding collection processes such as repayment arrangements via tools like chatbots and telephony automatic call distributors (ACDs) with interactive voice response (IVR). telephonic auto-dial systems. This way, companies will be able to improve compliance by eliminating human error and minimising burdens, allowing employees to focus on delivering a quality customer experience. 

    In a nutshell 

    The digitalisation of debt collection is inevitable, and it is already happening now. Consumers want to pay off their debts in a way that is convenient to them, where flexibility and user experience are enhanced. With this in mind, companies should start embedding AI and machine learning into their debt collection and recovery solutions and make use of its learning capabilities and predictive analytics to analyse customer preferences and assist in their collection strategies. Meanwhile, collection professionals should make it a priority to make use of automated technologies to further improve the customer journey and increase the collection and recovery rate. 

    About JurisTech

    JurisTech is a leading Malaysian-based Fintech company, specialising in enterprise-class software solutions for banks, financial institutions, and telecommunications companies in Malaysia, Southeast Asia, and beyond. 

    As one of the Fintech pioneers in Malaysia, our vision is to enable financial inclusion for the financial industry with our diverse range of solutions. Check out Juris Mindcraft, our latest AI-powered technology that helps banks and financial institutions to transform their digital landscape.

    For enterprise solutions, Juris Collect is an end-to-end debt management and collections system that helps you to implement different collection strategies for different customers to achieve the most efficient use of your resources. If you are also interested in automated telephonic auto-dial systems to enhance your collection and recovery strategies, check out Juris Astra and Juris Predator

    By | 2022-02-24T14:52:02+00:00 21st February, 2022|Insights|

    About the Author:

    Sabrina Looi was a Marketing and Communications executive at JurisTech. She is highly interested to explore the diverse technologies in the financial services industry and enjoys keeping up-to-date with the latest market trends.