Intelligent Collections Drive Better Experiences for Customers That Are Past Due — And Improve Success Rates

The debt collection industry has been growing for years in the U.S., and recent events look set to propel that growth further, with consumers facing economic headwinds such as inflation, as well as the continued follow-on effects of the COVID-19 pandemic.

Figures from the Fed show consumer credit increased at a seasonally adjusted annual rate of 9.7 percent during the first quarter of 2022, reaching $4.5 billion compared to $4.2 billion a year earlier. Further, according to data from Experian, the percentage of accounts 30-59 days past due increased 6.1 percent in 2021 compared to 2020. Meanwhile, utility customers were reported to owe up to $40 billion in COVID debt in 2020.

As the debt mountain grows and the number of impacted customers grows with it, collections teams must solve for a couple of growing challenges. First, they need to figure out how to maximize revenue collected while still driving good experiences for past due customers. Second, they must do so efficiently so as not to exacerbate the problem by increasing costs.

Welcome to intelligent collections

Addressing these two key challenges can be a tricky balancing act. The very best way to preserve the customer experience for past due customers would be to maintain the personal touch. But adding headcount at the scale required is not likely to be feasible for most – if any – collections departments.

Instead, billers can leverage technology to empower past due customers to self-serve the repayment solutions that best fit themselves and the biller’s organization.

Specifically, by using intelligent automation, billers can deploy digital agents that navigate customers through the experience of hardship surveys, forbearance requests, payment arrangements and more, to reach an agreement and bring them up to current status.

Throughout this process, data around the options customers tend to accept or reject, where they get stuck and how they respond to various offers can be collected and fed back into a biller’s processes. The data can be used to fine-tune collections strategies, allowing billers to continue collecting 24x7x365, all the while getting smarter about how customers can pay. These intelligent collections make the collections process more efficient and yet more empathetic.

Up and running in weeks

Among the challenges preventing organizations from adopting intelligent collections is the lengthy project cycle and resource requirements of the application development and data engineering involved.

But just as self-service can transform the collections process for customers, it can also do the same for billers when it comes to injecting intelligence into their collections experience. Adoption of technology such as ACI Virtual Collection Agent, part of the ACI Speedpay suite of solutions, can reduce time to market to weeks. Features such as a strategy manager tool allow billers to create a quick online survey for overdue customers on their financial condition, which in turn drives personalized payment offers or serves up pre-selected payment offers. The collections experience is driven at the backend by a rules-based engine, which makes it easy to set up customized offers for particular customer segments (offers can also be ranked and stacked based on rules and segments).

Rules can even be tested and validated before being presented to customers to determine the number of customers and dollar amounts affected. And, as customers engage through the self-service portal, their behaviors can be used to optimize the performance of collection models. This intelligence can also be made available to simplify and improve agent-assisted payment arrangements.

Consumers prefer digital agents

Millions of consumers have past due bills that they don’t know how to manage. Billers must respond with approaches that accelerate the process of bringing customers up to date.

According to our own customer data, consumers prefer to be contacted by a virtual agent if they are overdue on their bills, at a ratio of 4 to 1. And 22 percent of logins to ACI Virtual Collection Agent happen outside call center business hours.

The question is, how much of the collections industry is past due on responding to the growing consumer preference for greater use of automation and self-service to maximize both collections and customer satisfaction?

Learn more about the evolving consumer landscapes by downloading our latest full report on how consumers prefer to pay their bills.