Think Differently: Digital Advances Mark a New Era in Debt Collections

Over my career, I’ve witnessed several macroeconomic events that have shaped the debt collection industry. Yet none has been as unique as the COVID-19 pandemic, which has left millions of consumers struggling either from the virus or loss of income, overwhelmingly through no fault of their own.

The perception of many is that we’ve turned a corner on the pandemic, but the reality is not so simple. Even as more people go back to work, many have taken on additional debt to deal with life’s necessities. The good news is collectors have a new choice when it comes to intuitive, non-invasive digital technology that blends innovation with empathy.

Unleashing the power of AI

While innovation in the debt collections industry is increasing, most creditors and third-party providers of collection services are using the same methods they did five or even ten years ago. As a result, they are failing to move the needle when it comes to improving recovery rates. 

However, new technologies have become available that leverage AI and machine learning to create an automated, digital collections strategy that is far more effective than traditional methods. These new tools can analyze, understand and guide the debt collection process through voice analytics and AI-driven scripts that guide a consumer interaction toward a successful outcome. In fact, these technologies have been demonstrated to improve repayment rates by as much as 80% while lowering the cost of collections by 70%.

These new technologies also make the collection agent’s work much easier. Even the very best collection agents can make mistakes, simply because they’re human. Yet automated, AI-powered digital collections technology is guaranteed to ensure an interaction with the consumer by helping agents steer conversations in ways that are customer service driven and address the consumer’s true needs.

Giving consumers greater control

Self-service has become critically important in debt collection not just because more consumers want it, but because it lowers costs. There is also a new, younger generation of debtors who have grown up with new technology. Most of them despise collection calls and prefer to communicate solely through digital means. 

Fortunately, new digital collections technologies are capable of enabling debt collectors to detect a consumer’s preferred communication method and style and shift the collection strategy on a dime. They are also capable of executing an unlimited combination of strategies ranging from email to phone to web. 

More importantly, perhaps, is that AI-powered digital collection technologies give consumers greater control over the repayment process, which improves collection rates. The key is the ability to give consumers options over how much they can pay and when, as well as the ability to change their repayment plan should their personal circumstances change. 

The bottom line is that there is a greater need for both digital collections technology and empathy in debt collection practices—and these goals are not mutually exclusive. With the right tools, companies can create a customized collection strategy that works in any situation, giving themselves and the consumer a greater chance to place debt behind them.


iA Innovation Council is a collaborative working group of product, tech, strategy, and operations thought leaders at the forefront of analytics, communications, payments, and compliance technology. Group members meet in person (and lately, virtually) several times each year to engage in substantive dialogue and whiteboard sessions with the creative thinkers behind the latest innovations for the industry, the regulators who audit and establish guardrails for new technology, and educators, entrepreneurs and innovators from outside the industry who inspire different thinking. 

2021 members include:

2nd Order Solutions

AllianceOne Receivables Management


Arvest Bank



BC Services

Beyond Investments

Capital Collection Management

Cedar Financial

Citizens Bank

Collection Bureau of America

Crown Asset Management

CSS Impact

Dial Connection


Exeter Finance

Firstsource Advantage

Healthcare Revenue Recovery Group

Hunter Warfield 






NCB Management Services



Ontario Systems

Phillips & Cohen


PRA Group

Professional Finance Company

Radius Global Solutions


Revenue Group


Spring Oaks Capital

State Collection Service


The CMI Group




Unifund CCR