With pandemic-induced loan relief programs coming to an end, financial institutions may soon face another challenge – loan collections. And while the fintech space has seen lots of smart solutions in recent years, debt collection has been largely left on the back burner.

That leaves a lot of room for improvement from even simple, incremental changes involving data and automation. In fact, McKinsey reports that one European bank saved 30% of its debt collection costs by automating 90% of its client communications via machine learning. The loan recovery space is ripe for disruption, and AI technology will play a key part. In an industry that traditionally relies on phone contact, loan providers stand to benefit a lot from Voice AI.

Though not new, Voice AI technology still has yet to see widespread adoption in the financial sector, particularly in loan collections. This seems counterintuitive, as there are a couple of ways Voice AI helps make things better in this area. Here are some of them –

1.   Automate reminders to customers

Streamlining processes has always been one of the immediate priorities when it comes to adopting AI. This applies to loan collections as well. Instead of having a large team of agents make telephone calls to remind customers that their loans are overdue, Voice AI can do same–and do it at scale.

Automated calls can also be deployed simultaneously, increasing the efficiency of operations. The best thing is that it only takes a few minutes to schedule these calls, and the technology takes care of the rest. This relieves agents of the stress and frees them up to focus on more complex tasks.

2.   Help manage difficult conversations

Debt has a negative impact on mental health, and this comes out in unpleasant ways during collection calls. Agents often face challenging situations, and conversations can range from awkward to downright rude. Voice AI can take the emotional burden away from human agents by becoming the first touchpoint in loan collections.

Moreover, Voice AI agents can handle difficult cases in a more neutral manner, using natural language understanding to modulate tone. Learning from previous conversations, AI agents can proactively adjust to respond in ways that soften a customer’s heightened emotions and reach a positive resolution.

3.   Provide personalised options

One benefit of using AI is having a wealth of data to draw insights from. AI can profile customers and start providing personalised experiences that cater to individual preferences. By sifting through a customer’s history, AI agents can identify the best day and time to call, the types of repayment or loan restructuring options that would appeal to them, and even how they would like to be spoken to. All these things matter when it comes to potentially charged interactions involving debt. Being able to harness background information on how to manage these conversations would definitely give you an advantage.

4.   Collect, analyse, and act on audio data

Having tons of data is only great if you can use it to gain actionable insights. This used to be challenging with voice calls, but not anymore. Voice AI can analyse calls and extract information on what approaches work best–from language and wording to tone and accents, and even pauses. Insights from data can be used to update scripts based on customer response, helping to ensure greater chances of success in future calls.

AI can also automatically categorize your customers into different buckets, according to their risk or likelihood to default. This helps you manage your portfolio more effectively and take action where needed.

5.   Inform and update your strategy

While we may not see or hear how each customer responds, Voice AI technology can help spot patterns and flag potential risks that may be invisible to humans through big data analysis. Does the person sound nervous? Or using words with negative meanings? For brief calls, is the person being curt, or confident? By having AI surface these patterns, such as through sentiment and tone analysis and voice transcripts, you can refine your strategy and take a more proactive approach.

Customers that exhibit behaviours signalling delinquency can be contacted earlier, avoiding bigger issues further down the line. AI can even provide insights into which strategies worked well in the past, and how to best deploy them to get optimum results.

Loan collection is a hairy task, but with technologies like Voice AI, the process can be made simpler. And while it may not make the experience completely painless, it can definitely relieve much of the burden.

Automate your loan collection processes with Voice AI. Contact us today to learn more.