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The Collections Industry Inflection Point: How AI is Driving Change 

  • Written by Steel Rose

By Steve Kusic, CEO of NRA

In an industry where you’re constantly finding a balance between empathy and profitability, the circumstances of 2020 have made our work more challenging than ever. With consumer debt skyrocketing, we’ve found ourselves in a unique position: striving to manage unprecedented call volume while balancing both the agent and customer experience.

What I’ve come to realize over the past few months is that digital initiatives that were once on the sidelines are now unavoidable. We’ve reached a turning point where technology—AI and automation in particular—have become essential to the way we do business.

For many, this realization isn’t an easy one. There’s a certain uneasiness associated with investing in technology that will transform the foundation of your business. In collections, contact centers are the focal point of operations, making any investment in this area both high risk and high reward. It’s natural to start asking questions: Will AI get the job done right? Will it frustrate my customers? Will it add stress to employees who are already stretched thin?

This year, our company made the leap; we invested in an AI-powered Virtual Collection Agent (VCA) for our contact centers. I was hesitant at first, but throughout this process I’ve come to realize and appreciate the impact AI will have on not just us but on the industry as a whole. It’s no longer an accessory or moonshot idea, it’s a catalyst for driving the collections industry forward. Here’s why:

AI can be your best agent at scale (and make your best agents even better)

One of the most powerful aspects of our new VCA, which is powered by Interactions, is that it’s advanced enough to operate like our best employee at scale. 

The factors that contribute to any human performing at their absolute best are varied and vast. That’s what makes AI indispensable; it will never wake up on the wrong side of the bed. It always shows up and performs, quite literally, to the best of its ability. This consistency is key to operational efficiency. 

On top of that, a virtual agent can also offload transactional conversations, like sorting out wrong party contacts, from human agents, eliminating the need to hire additional workers to handle spikes in non-revenue generating calls. Meanwhile, shielding humans from these monotonous, sometimes frustrating conversations can boost their productivity and reduce churn—a persistent challenge in the collections space. With an AI-powered coworker, agents can focus on serving customers that need support in handling complex matters, driving profit while helping consumers ease financial pressures.

Customers often prefer to work with a virtual agent

Beyond the clear impact on operational efficiency, there have been a number of studies showing the benefits of AI on customers. A recent Interactions survey found that one in four U.S. consumers prefer interacting with a virtual agent when dealing with uncomfortable financial information, and 70% of them are okay with bypassing a human agent when discussing personal finances. 

When sensitive conversations comprise the bulk of contact center calls, research like this can’t be ignored. We have to take into consideration the various possibilities for adjusting communications with customers to reach solutions that meet their individual needs. 

Security concerns can be yesterday’s problem

Importantly, and unlike conversations with humans, every interaction with a virtual agent is pre-defined and follows a specific flow that’s compliant with our industry’s various regulations.

If you consider the regulations at play in collections, such as the FDCPA regulating call times, the TCPA requiring expression of prior consent, or the FCRA regulating data collection, there’s an enormous amount of complexity involved in each customer call. All of these policies are critical to the sanctity of our work, and failing to meet any one of them can be detrimental to collections agencies and the customers we serve. But with a virtual assistant pre-programmed to adhere to these guidelines, security concerns due to “slip ups” can become a thing of the past.

While I can’t predict the future, I know the three primary challenges our industry faces—operational efficiency, customer experience and security—aren’t going anywhere. Knowing AI & automation can help address these obstacles brings the industry to an inflection point; and you won’t want to be on the other side of the curve. 

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