AI has changed how debt collection works, making it faster and more efficient. But there's a big problem: AI often fails to personalise its approach when dealing with people who owe money. This can cause issues like poor results, angry debtors, and even legal troubles.
AI can do a lot in debt collection. It can send out messages, make calls, and analyse data to find patterns. In theory, it should be able to tailor its approach to each person. But in practice, this often doesn't happen.
While AI can crunch numbers and send messages, it often misses the mark when it comes to treating each person as an individual. Here's why:
AI often uses the same scripts for everyone, ignoring each person's unique situation. It can't show real empathy like a human can.
AI might treat people differently based on where they live or their background. This can lead to unfair practices and make existing inequalities worse.
AI often makes decisions based on limited information. It might not understand a person's full financial situation or life circumstances.
The lack of personalisation in AI debt collection can cause several problems:
Generic approaches often don't work well. People are more likely to pay if they feel the collector understands their situation.
AI that treats certain groups unfairly could face discrimination claims. Aggressive tactics could also be seen as harassment.
Bad debt collection experiences can ruin a company's relationship with its customers and harm its reputation.
To make AI debt collection more personal and effective, companies can:
Train AI on diverse data sets and keep information up-to-date.
Let AI handle routine tasks, but involve humans for complex cases.
Use advanced language processing to help AI understand and respond better to people.
Make sure AI debt collection follows all relevant laws and regulations.
In the future, AI debt collection could become even more personal by:
Developing AI that can pick up on emotional cues and respond appropriately.
Allowing debtors to pick how they want to be contacted.
Constantly improving AI based on feedback from debtors.
By addressing these issues, AI-driven debt collection can become fairer, more effective, and more personal. This would be better for both the companies collecting debts and the people who owe money.