Even Debt Collectors are Using Automation and Self-Service for CX

Traditionally, debt collectors would stop at nothing to recover lost assets. Harassing debtors by phone, mail or even in-person was the norm.

Today, however, businesses understand that you catch more flies with honey than vinegar – both for inducing delinquent customers to pay up and for the sake of preserving the customer relationship in the long run. Attrition costs money, regardless of who was at fault. 

Digital channels empower consumers to take control of debt repayments through self-service; they can set up payment plans, track their spending and receive overspending alerts. On the flipside, they alleviate a great deal of emotionally demanding grunt work for debt collection agents. 

One New Jersey-based collections agency, MRS BPO, has developed an AI-powered conversational IVR that services customers on inbound calls. “Adam” is available after hours and can handle thousands of concurrent calls using IBM Watson voice recognition technology.

The bot can assist with a range of tasks like disputing a debt, disclosing a bankruptcy, communicating the death of a customer and making a payment or series of payments. 

Given that the business of debt collection is heavily undergirded by financial and compliance regulations, automation goes a long way toward reducing compliance errors by doing the same thing the same way every single time. 

“We wanted to create something to service customers, get the compliance, cut the [call] time down and also take away some of the things that agents don’t want to handle,” Alex Pettit, lead solutions architect at MRS BPO, said at the VOICE Summit in Newark.

Pettit built a prototype of Adam “by accident” while completing an assignment for his Master’s degree, in which he was required to use Raspberry Pi, a credit card-sized microcomputer. 

While it might sound like a souped-up IVR, customers can engage with Adam by speaking naturally rather than having to listen to a list of menu options and press numbers on their keypad. Currently, “he” handles about 6,000 calls a day - and he sounds like a bot. There’s no Google Duplex-type hoodwinking here. 

This year, MRS is set to process over $7 billion in financial transactions and interact with over 10 million consumers. Debt collection is a high-stakes business; it’s also a delicate matter.

The case of a customer who forgot to make a payment while on vacation is very different from one who was laid off and is falling behind on their mortgage. Consequently, some debt collection agencies have recast their roles as “repayment consultants."

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MRS’s IVR technology isn’t fully primed to do this just yet. It can assist customers with full or partial payments or setting up a payment plan, but if a customer wishes to dispute their balance or claim that the wrong account has been charged, Adam directs them to lodge the dispute by mailing a letter to MRS, as shown in a brief demo call with a customer. 

However, customers have shown a preference for interfacing with a bot rather than a human in a situation that is often embarrassing, intrusive and stressful. 

“Guiding that interaction in a way that’s simple takes the emotion out of it,” said Pettit. “They can yell at the [IVR] all they want and feel better after, but it still continues right on the path.” 

Since the beginning of the year up until mid-June, Adam has handled 97,000 calls and taken 4,000 payments totaling over $1 million. The average size of each payment is $144. 

“We have noticed that payment size is typically larger because people are less likely to try and finagle a bot,” Pettit added. “They’re more likely to pay off the entire balance rather than negotiate for a settlement or make a single partial payment.” 

PriceWaterhouseCoopers reported that 46 percent of consumers use only digital channels to conduct banking, skirting traditional offline channels altogether. Institutions are focusing on treating customers in a caring and respectful way while still driving increased receivables. 

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“These people are already pissed off; they owe money,” said Pettit. “We’re trying to be nice about it at least by making [repayment] as easy and painless as possible.”

Granted, they still get a lot of hangups - a perpetual pain point for debt collectors, where customers hang up the phone the second they identify that a creditor is calling. While customers might feel more comfortable setting up payments with a bot, they’ll also feel less guilty about hanging up on them.