A multichannel strategy enables collection agencies and lenders to cut costs, improve processes, and meet the diverse needs of consumers.
By Sourabh Gupta, Founder and CEO of Skit.ai
*Sponsored Blog Post*
Over the past two years, the accounts receivables industry has undergone a notable transformation, marked by a booming demand for AI and digital solutions in what has traditionally been a cautious marketplace. The shifts in our economy and society have acted as catalysts for the adoption of new technologies across all industries, a change that seems to be far from temporary.
After the COVID-19 pandemic hit, the Federal Reserve responded by significantly reducing interest rates to keep the economy afloat. This move prompted increased borrowing but also resulted in high inflation rates and subsequently raised interest rates, placing the ARM industry in a unique position. On the one hand, the uptick in delinquencies and default rates has created fresh opportunities for companies in collections. On the other hand, inflation has made it increasingly challenging for these companies to hire enough workforce and manually manage the surge in accounts.
Failure to address these dynamic circumstances has eventually led to widespread consolidation in the debt collection industry.
Enter Conversational AI. Voicebots have enabled collection agencies and creditors to handle unlimited human-like conversations with consumers, automating repetitive tasks such as right-party contact verification, negotiation of payment terms, on-call collections, and post-call logs. Automation with Conversational Voice AI has led to a threefold impact in the ARM industry: higher account penetration enabling increased revenue, lower collection costs, and reduced agent workload.
At Skit.ai, we’ve been fortunate to be at the forefront of this transformation, partnering with over 70 U.S. third and first-party debt collection agencies and lenders to automate collection calls with our Generative AI-powered solution. Through our platform, we’ve delivered up to 10X ROI and dialed an average of a million weekly calls.
Why a Multichannel Strategy Has Now Become Essential
The effectiveness of phone calls in maximizing consumer engagement is undeniable. Voice channels are here to stay. But the shifts in consumer behavior catalyzed by the pandemic have underscored the necessity for all industries, including collections, to expand their communication strategies through additional channels.
Today’s consumers expect a multichannel outreach strategy involving the use of email, text messaging, and chat to augment the role of traditional voice channels and enable an enhanced consumer experience.
75% of U.S. consumers won’t answer phone calls from unknown numbers. Outbound phone calls to consumers can be intrusive; the timing can be inconvenient, too. Additionally, laws such as the FDCPA and Reg F regulate outbound consumer outreach frequency and calling times. It can be challenging for collection agencies to reach consumers at their most convenient times via a phone call.
Non-intrusive, automated channels such as chatbots allow consumers to engage with you at their convenience. Reaching consumers through their preferred channels boosts payment results, as shown in a McKinsey study. The use of digital channels to perform activities such as opening a bank account, applying for a credit card, applying for loans, and managing investments is virtually ubiquitous in today’s society.
In contrast to Conversational AI technology, traditional contact centers present stark limitations. Agencies miss collection opportunities on a daily basis due to frustrating IVR menus, after-hours voicemails, insufficient agent bandwidth to handle entire portfolios, the inability to operate round the clock, and the costly nature of staffing—all of which contribute to revenue leakage.
The Impact of Multichannel Communication with AI
At Skit.ai, we’ve helped many existing customers adapt to this shift in consumer behavior. We introduced a suite of multichannel offerings—voice, email, chat, and text messaging—to augment outbound outreach, automate inbound service, and help deliver a positive consumer experience. We have also introduced a mobile-friendly payment portal.
Our customers have automated right-party contact verification, consumer queries, capturing payment dispositions, and payment collection. Our bots allow consumers to make complaints, get information on their outstanding debt, request a live agent transfer, and more. For more complex interactions, they’ve used our email bot, which provides bill breakup information. These tasks are regularly completed with virtually no agent intervention.
The results are impressive. An outbound campaign with our multichannel platform has enabled our clients to double their engagement, leading to more than double the rate of collections while reducing the cost of collections by 40%.
At the same time, we’ve encouraged the automation of inbound channels, where consumers tend to have a higher propensity to settle their debt.
In the long run, consumer data will enable every agency to optimize its strategy and utilize the right channel and time of engagement for each type of consumer.
Paving the Way for Consumer-centric Collections
Multichannel strategies, a brainchild of the retail industry, have already made a lasting impact on many industries.
Sourabh Gupta, Founder and CEO of Skit.ai
Skit.ai’s mission is to revolutionize the accounts receivables landscape similarly. While increased collection rates and reduced costs will undoubtedly benefit collection businesses, the adoption of AI will also have a remarkable impact on the consumer experience.
A multichannel strategy is not about replacing human interactions; it’s about enhancing them by offering multiple touchpoints that meet the diverse needs of consumers and optimizing the resources available to collection entities.
By leveraging cutting-edge technology, businesses can pave the way for a more consumer-centric approach to debt collection, one that is efficient, compliant, and effective. Thanks to the benefits provided by various communication channels, lenders and collection agencies can personalize campaigns, streamline processes, and ultimately improve business results.