The debt collection sector is less innovative than other areas of the financial sector; operational effectiveness and consideration for the customer experience are still almost nonexistent. If we consider the quantity of potential clients across numerous industries as well as the regularity and severity of the issue with delayed payments, there is already a substantial market for debt collection digitalization.
Mentioned below are a few technology trends that are revolutionizing the debt collection space.
1. Payment apps- For mobile devices running iOS and Android, there are many debt collection apps available. The best part about these apps is that they completely prevent any possibility of fraud. Due to the way the apps are designed, transactions happen directly between the lender and the debtor or vice versa. The most important feature of debt collection apps is complete transparency.
2. Predictive Analytics- Thanks to developments in predictive analytics, a kind of advanced analytics, the debt collection sector is undergoing a significant transformation. It uses a variety of methods, including statistical modeling, machine learning, artificial intelligence, and data mining, to make predictions about the future. Lenders can quickly observe a considerable boost in debt collection with the aid of predictive analytics without lowering consumer interaction.
3. AI-driven chatbots- Customer experience is one of the most crucial areas for improvement in debt collection. Intoday's intensely competitive corporate climate, success or failure is determined by customer happiness. Naturally, a chatbot powered by artificial intelligence (AI) cannot totally substitute human negotiators, but it may help them comprehend clients better and communicate with them in a timely, efficient, and cost-effective manner by using the most appropriate channels.
4. AI enabled Accounts Receivables Platforms- On the legal side, there are frequently clearly laid-out regulations in place that alter periodically. They would require less human interpretation (and error), which would result in lower total legal expenses, if they were included in an automated accounts receivables system. With the increase in global trade, AI offers a solution for cross-border compliance. Platforms for managing receivables with AI capabilities are particularly helpful in sectors where it is notoriously difficult to be paid on time.
The article has been written by Manavjeet Singh, MD & CEO, CLXNS