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October 21st, 2019

Technology Meets Collections at Debt Connection Symposium 2019

If you attended this year’s Debt Connection Symposium, you heard the term ‘Artificial Intelligence’ tossed around a lot. There’s no question that ‘AI’ will influence the Collections industry, eventually.


While technology races onward, the laws regulating the industry—now decades old—continue to gather dust. This year at DCS, we heard the Consumer Financial Protection Bureau (CFPB) acknowledge the potential of AI in Collections. Before we can tap the potential of AI, we will need to explain the technology in terms so that everyone can understand how it works. To date, the explanations have been so technical that even the more experienced agencies have a hard time following. That will soon change, just like one day AI will be able to mimic human language, but we still have a way to go.


For now, it’s better to focus on making the most of approved tools.


Forecast changes in regulations forcing creative thinking
When the CFPB’s proposed rulemaking go into effect collections companies will be limited in their ability to make contact with consumers via the phone channel. It’s going to be really important to call the right person at the right phone number, at the right time of day, and on the right day of the week.


Fortunately for the Collections industry, we have already been wrestling with this challenge, and arrived at a best practice: add external data sources to your CRM, so you have better information about the customer’s phone usage. That way, you can be more precise with your outbound dialing. The practice has already proven itself for a collections organization complying with another strict regulation: the TCPA.


Everyone wants to try to avoid the cost of external data by optimizing their historical performance data. That will only get your performance to the point at which it was most optimized. With performance score cards still being king, relying solely on your own historical data leads to a self-fulfilling prophecy. You don’t know what you don’t know. The key to getting the most out of your technology, whether it’s your outbound dialing or artificial intelligence, is to maximize it with external data.


Now, let’s say that you do call the customer at the right number, time, and day. You have a higher chance of them looking at their phone to see who’s calling, in which case it’s essential that their Caller ID displays your organization’s name correctly. If that space is blank, mislabeled as spam, or blocked by the carrier as a scam, well, there goes one of your seven chances that week. (Read Why Customers Won’t Take Your Call, a Forrester Consulting thought leadership paper commissioned by Neustar, for more on this topic, and what you can do about it.)


Artificial intelligence in Collections
The potential of AI will continue to make it a fixture of conversation at industry events for years to come, regardless of when it will attain widespread adoption. That didn’t keep myself and my colleagues on the ‘Technology in Collections’ panel from sharing ways that AI, machine learning and external data could be applied in the industry: modeling individuals’ propensity to pay, determining the best day/time to contact consumers (beyond what our Phone Behavior Intelligence solution is capable of now), taking payments, anticipating what the consumer will say next to an intelligent response virtual agent, and providing self-service entry into a call center with the option to pass information to a live agent.


While this all promises to reshape how Collections organizations operate, the panel agreed that AI today will not make agents obsolete. Rather, the near-term recommendations remain down to earth: start small, expect to make mistakes, organize your data, and talk to vendors and their customers to learn best practices.


Get When Customers Stop Answering Their Phones for five steps your organization can take to keep the lines of customer communication open.

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