TL;DR:
- TransUnion’s report reveals that 11% of debt collection firms are using AI/ML technologies in 2023.
- 60% of these companies are in the process of deploying AI/ML-based technology.
- AI is used for predicting payment outcomes, customer profiling, virtual negotiation, communication recommendations, and more.
- Larger debt collection companies are more likely to integrate AI, with 36% of those managing over a million accounts already doing so.
Main AI News:
In the realm of debt collection, the winds of change are blowing strong. TransUnion’s recent report, “Seizing the Opportunity in Uncertain Times: The Collections Industry in 2023,” sheds light on a noteworthy trend. Third-party collections companies (commonly known as 3PC) are increasingly turning to the power of AI-driven solutions to bolster their efficacy and streamline their operations.
TransUnion’s insights point to a future where artificial intelligence and machine learning technologies wield substantial influence over debt collection. Remarkably, as of 2023, a remarkable 11% of 3PC enterprises have already integrated AI and ML into their practices. What’s even more striking is that a staggering 60% of surveyed 3PC companies are on the path towards adopting AI and ML-based technologies.
So, what precisely are these debt collectors harnessing AI for? TransUnion’s comprehensive survey of 90 AI-adopting companies reveals the following key applications:
- 58% utilize AI to forecast payment outcomes, gauging an individual’s capacity and willingness to settle their debts.
- 56% employ AI to segment and profile customers, tailoring workflows to suit diverse client profiles.
- 53% leverage AI as virtual negotiators when dealing with debtors.
- 47% rely on AI to suggest optimal communication methods.
- 47% harness AI to scrutinize the life cycle workflows of accounts.
- 46% use AI to anticipate consumer behavior.
- 37% utilize AI to guide customers towards the most suitable communication channels.
- 32% employ AI to monitor and evaluate worker performance.
Unsurprisingly, the report highlights a correlation between the size of the debt collection company and its AI adoption rate. Notably, 36% of 3PC firms managing a million or more accounts have already embraced artificial intelligence in some capacity, underscoring the transformative potential AI holds in this industry.
Conclusion:
The rising adoption of AI and ML technologies in the debt collection industry, as indicated by TransUnion’s report, signifies a notable shift towards efficiency and effectiveness. This trend suggests that companies embracing AI are better equipped to navigate the intricacies of debt collection, making it imperative for others to follow suit to remain competitive in this evolving market.
