I was asked to write a blog and whilst I normally enjoy writing down and sharing my thoughts, today I was not enjoying it and thought I would take a different approach. As AI is the buzz word of the year, I thought I would ask AI, what AI thought its role in digital collections could be.

I asked,

“As a business analyst for a digital collections software and solutions company, write a blog that discusses if AI has a future in collection activities.”

It responded …

“In recent years, artificial intelligence (AI) has been increasingly used in various industries, including the debt collections industry. AI technology has the potential to revolutionise the collections industry by improving the efficiency, accuracy, and effectiveness of collections activities. In this blog post, we will discuss whether AI has a future in collection activities.

Improved efficiency

One of the key benefits of AI in collection activities is its ability to improve efficiency. With AI technology, collections agencies can automate a range of tasks that were previously time-consuming and labour-intensive. For example, AI-powered chatbots can handle simple customer inquiries, freeing up collections agents to focus on more complex cases. Additionally, AI can be used to automate routine tasks such as sending out payment reminders, allowing agents to prioritise their work on more urgent cases.

Improved accuracy

AI technology can also improve the accuracy of collections activities. By analysing large datasets, AI algorithms can identify patterns and trends that may not be visible to human collections agents. This can help collections agencies to more accurately predict the likelihood of a customer repaying their debt, allowing them to make more informed decisions about how to proceed with a particular case.

Improved effectiveness

Finally, AI has the potential to improve the effectiveness of collections activities. By analysing customer data, AI algorithms can identify the most effective strategies for collecting a particular debt. For example, AI can help to identify the best time to contact a customer, the most effective communication channels to use, and the most appropriate tone to take in communications.

Challenges to AI adoption

Despite the many benefits of AI in collections activities, there are also some challenges to its adoption. One of the main challenges is the cost of implementing AI technology. While the cost of AI technology is decreasing, it can still be prohibitively expensive for some collections agencies, particularly smaller firms.

Another challenge is the potential for AI to be used inappropriately. For example, there are concerns that AI algorithms may inadvertently discriminate against certain groups of customers, such as those from low-income backgrounds or with limited access to financial resources.

Finally, there are concerns about the potential impact of AI on the collections workforce. While AI can automate many routine tasks, it is not yet capable of replacing human collections agents entirely.