Understanding Machine Learning & Artificial Intelligence Debt Recovery and Collection

Categories Uncategorized
July 13, 2022

Debt recovery and collection look quite different in 2022 than they did ten, five, or even just a year ago. New means to reach consumers, larger data sets to analyze, complex regulations to follow, and so much more.

So when it comes to deciding the best way to engage consumers, has your strategy evolved to keep up? Machine learning, artificial intelligence, data science—these terms are thrown around a lot, and for good reason.

What exactly is machine learning, especially when it comes to recovering delinquent funds?

We’re here to cut through the jargon and help you understand machine learning and its application in the collection and recovery so you can make an informed decision before taking a big technology leap.

What is Machine Learning?

Machine learning is the capability of a computer to make decisions using thousands of inputs faster than the human brain can process, while continuously improving the quality of those decisions as it learns more over time.

How is Machine Learning used in Debt Recovery and Collection?

Machine learning is used in numerous ways across industries and organizations—but what about in collection? There are many ways it enhances a debt collection and recovery strategy, but here is a quick overview of common machine learning components used for collections with the benefits each provides.

What challenges does Machine Learning solve for Collection?

What is the challenge?
What message will appeal to and compel a customer to read and respond? Treating content as one-size-fits-all can fall flat when trying to engage an individual, especially when it comes to sensitive or delinquent accounts.

How does machine learning solve it?
Send a message more likely to resonate based on data points that align with an individual customer. Through the learning feedback loop, a wider library of content can be created to offer more personalized messages tailored to a variety of customers.

What is the challenge?
Which is the best channel to reach out to a customer: phone, email, SMS, or something different? Trying to figure out the best way to contact a customer is the key to any successful collection operation—avoiding wasting valuable time, energy and cost on the wrong channel with no engagement.

How does machine learning solve it?
Faster than a human can analyze, an ideal channel is selected based on the customer. If that avenue doesn’t produce results, another decision will be made—and in the process it will create new

What is the challenge?

Automation has relieved a lot of the manual processes of sending emails or SMS messages, but it’s often still a one-size-fits-all. Catching a customer at just the right moment can be the difference between no engagement and recovering funds. On top of simply reaching customers, recovering debt has strict rules about when you can and can not contact individuals that you must adhere to.

How does machine learning solve it?
Taking the learnings from other similar profiles, reach out to customers at the most appropriate times to spur action, and then recalibrate timing if the first outreach doesn’t land—all without having to adjust automated messages manually. In addition, machine learning is able to adapt as regulatory compliance are introduced to ensure all federal, state and local rules are being followed without human involvement.

The Bottom Line Benefits

Machine learning applied to a collection strategy drives overall improved performance, better customer experience, and the more effective recovery of delinquent funds. As per survey of lenders report machine learning and artificial intelligence improve data analytics by more than 80% and improves productivity by more than 70%

A debt collection-focused machine-learning model can rapidly evolve and improve collection efficiencies at different stages of the collection process. The more data you have, the better you can collect, and the more you collect, the more data you have.

How to Get Started

The ins and outs of machine learning can get complex quickly, but learning more about how it can enhance your collection strategy is easy:

Recover more with the right message, on the right channel, at the right time with ClearDu’s machine learning-driven collection and recovery platform.