Conversational AI in Debt Collection: Streamlining Efficiency and Enhancing Customer Experience

Rising inflation and interest rates have driven a surge in loan delinquencies, with credit card defaults reaching their highest level since 2010, according to The Financial Times. For lenders, this means increased time, cost, and effort in collections. Cloom’s conversational AI transforms debt collection by streamlining processes, reducing costs, and enabling self-service, delivering better customer experiences and higher recovery rates.

What’s the Trouble with Collections?

As delinquency volumes rise, traditional collections processes—relying on manual, case-by-case agent handling—are inefficient and costly. Past automation attempts offered limited, predefined options, lacking the nuance needed for complex cases. Early virtual agents were one-way broadcasters, unable to process customer responses, while two-way agents were restricted to scripted replies, inadequate for diverse consumer needs. Cloom’s conversational AI addresses these challenges with dynamic, human-like interactions.

Conversational AI and Automation

Conversational AI, as defined by Nvidia, enables human-like interactions by recognizing speech, text, and intent, including local phrases and slang. Unlike traditional chatbots, Cloom’s conversational AI operates across preferred channels like text or WhatsApp, processing customer utterances to:

• Understand and analyze customer stories for relevant insights.
• Parse intents (e.g., make a payment) and slots (e.g., account numbers, dates).
• Automate complex scenarios like fraud or collections, reducing agent effort.

This flexibility enhances customer experiences by minimizing data collection steps and advancing processes toward resolution.

Conversational AI vs GenAI

Unlike general-purpose GenAI, which may risk hallucinations, Cloom’s conversational AI uses predefined automations tied to specific intents (e.g., pay now, negotiate terms). This ensures controlled, compliant responses tailored to collections processes, eliminating improvisation risks while leveraging sophisticated AI for natural language understanding.

How Can Conversational AI Improve Collections?

Cloom’s conversational AI enhances collections through six key intents:

• Negotiation: Offers acceptable payment options, mapping customer choices to automated processes without emotional friction.
• Pay Now or Later: Guides customers through immediate or deferred payment processes, offering flexible options like partial payments.
• Hardship: Identifies hardship signals (e.g., job loss) and triggers compassionate scripts with flexible repayment options.
• Speak with an Agent: Captures utterances before escalating to agents, ensuring seamless transitions without repetition.
• Already Paid: Resolves payment disputes by tracking transactions and detecting fraud.
• Fallback: Handles unclear utterances by restarting or escalating to agents, avoiding improvisation.

With rising delinquencies, Cloom’s conversational AI reduces costs, supports customers in hardship, and enables self-service. Schedule a demo with Cloom today to streamline your collections strategy and enhance customer experiences!