Technological trends in debt collection

Change is a hallmark of our times. Although it might seem that we are accustomed to dynamically changing conditions and have the ability to adapt quickly, modern realities force organisations to be even more flexible. This trend is particularly evident in the debt collection industry, which is evolving strongly, making the technological perspective in this sector increasingly interesting. Automating debt collection processes nowadays is the order of the day, which translates into the quality of customer service and its improvement.

Automation and robotisation, communication, digitization of courts, AI, scoring or data analytics ensure not only faster decision-making, but also the selection of an individual strategy tailored to a particular client.

Why is it worth following trends in debt collection?

The high competition of debt collection companies, growing debt of consumers and businesses, resulting both from the difficult economic situation and changes in habits (for example the growing popularity of “buy now, pay later”) are among the numerous reasons why it is worth following the trends in debt collection. New technologies help to increase effectiveness and improve efficiency, which is particularly crucial in the initial stages of debt collection, but also necessary in judicial and enforcement collection. The implementation of modern solutions, such as the automation of routine and time-consuming tasks, improves efficiency, thus enabling faster handling of more cases and easier coping with the difficulties of recovering debts from new debtors.

According to expert observations, a strategy of effective monitoring of payments, ensuring a smooth transition to the initiation of legal proceedings in case the client fails to pay the amount due within the time agreed by the parties, will be of considerable interest.

How do new technologies support debt collection?

Technological trends in debt collection primarily include the increasing automation and robotisation of activities that were previously performed by humans. Modern tools, such as AI, scoring and data analysis, allow not only to improve debt collection processes, but also translate into the efficiency of the company. The faster a specific action is completed, the more efficiently the entire process can be closed. Those who follow and implement trends in debt collection can count on the greater effectiveness of new work tools, including faster decision-making or individualized selection of handling strategies.

According to expert observations, a strategy of effective payment monitoring, ensuring a smooth transition to the start of legal proceedings in case the client fails to pay the amount due within the time agreed by the parties, will be of considerable interest.

Key technological trends in debt collection

Automation of debt collection processes. What is it, how does it work?

Automation of debt collection processes is nothing more than “delegating” some of the daily duties to modern tools. Thanks to automation, the risk of mistakes due to the so-called “human factor” decreases, and the collection process is performed more efficiently. By automating time-consuming activities, a debt collector can devote their time to other duties, which increases their motivation. Automation in the daily work includes a mechanism for selecting the optimal strategy for dealing with customers (based on the processes of monitoring receivables), application of AI to calculate the customer’s scoring, collecting the amount due automatically, requiring no action by an employee. In Poland, it also means improvements resulting from the digitalisation of the judiciary, including debt collection proceedings (through the implementation of e-delivery in the Court Information Portal by the Ministry of Justice). Without a doubt, it is automation that is the future of debt collection systems (for instance, in court proceedings by exchanging data with the Common Courts Information Portal).

Self-service portals for debtors. What are their advantages?

Thanks to modern self-service portals for debtors, such a person has the possibility to monitor their case in real time. “Moving” the most significant aspects of debt collection activities to the Web reduces the amount of paperwork required to be completed in the presence of the client. Convenient self-service portals take into account the most crucial aspects of the process: its course, the customer’s data, the debt collector’s data, the amount of the debt. This type of solution also contributes to increasing the level of security of the debtor, as the data is processed in accordance with the highest standards, and only authorized persons have access to the case. Self-service portals for debtors also make it possible to declare a repayment deadline and restructure the debt.

Creating a full history of customer contacts. Why is it worth it?

Creating a complete history of contacts with a customer translates into a significant facilitation of the process. By recording the progress of the action on an ongoing basis, the employee has the possibility to view the entire previous history of a particular customer. This type of solution will support the work of the debt collector on a daily basis, keeping it optimally organized (without the risk of overlooking important issues for the case). Complete information on the history of contacts with the customer can be extremely helpful in a situation when it is necessary to transfer the case to another employee (so that they efficiently and seamlessly find their way through the process delegated to them).

Switching from stationary to remote work – what does it entail?

Although remote work is no longer surprising nowadays, an employee switching from stationary to remote mode must expect major changes in their daily work activities. In order to organize their work well and get used to performing their duties at home (or wherever they want), they should equip themselves with the right organizational tools. A person dealing with processes remotely can use modern communication platforms (for example, when meeting with the debt recovery team).

Using a bot. What is AI?

Nowadays, bots are used in almost every industry! Thanks to the use of modern AI technology, debtors do not have to worry about the so-called “psychological barrier”. Distance and objectivity are the main advantages of automating conversations with the customer, who (when presenting their situation to Al) will not have to face a sense of embarrassment or awkwardness.

Al not only recognizes the content of letters, sent to institutions claiming their debt, but also streamlines contact with the customer, especially in the early stages of monitoring the debt to inform the customer of the debt.

Whatsapp for business. How can it help?

A practical business chat application, Whatsapp for business enables efficient day-to-day communication among employees and teams. Business-dedicated Whatsapp also offers the possibility of attaching documents and holding “meetings” where employees can exchange information and experiences in debt collection. Using a modern communication tool, employees save their own and the client’s time, which translates into improved operations.

Full integration of the debt collection system with other systems. What is the purpose?

Taking advantage of the full integration of the debt collection system with other systems, debt collectors can count on faster and more effective insight into the Client’s data and cases. This type of solution not only saves them time (all information is in one place), but also improves the quality of customer service.

How will the new trends affect the development of debt collection?

There is no doubt that employees in various industries (including debt collection) are in for quite a change. Moving with the times, debt collection companies are choosing to implement convenient, fully automated tools that streamline daily work. What kind of difficulties may the debt collection industry face? First of all, those that (according to Polish law) result from legislative changes, such as limited working hours. The work of debt collectors is defined by a number of regulations, including Article 190 of the Criminal Code (which states the punishability of any threat that arouses a justified fear), Article 191 of the Criminal Code (which deals with specific acts that, among other things, a debt collector may not commit against a debtor) or Article 216 of the same Code (which defines insult and defamation). Implementing new solutions to support effective and compliant debt collection activities initially requires a considerable commitment, of course, but it is an investment worth considering. Using modern tools will bring optimal results, which will translate into real profit for the company. Debt collection teams, wishing to try out new technologies in their work, can reach for ready-made solutions from proven vendors who are willing to share their technological expertise. Without a doubt, debtor portals, AI, creating a full history with the customer and other tools to streamline case processing are an investment for years to come, which will effectively support the work of debt collectors on a daily basis.

Which tools are worth paying special attention to?

In times of dynamically changing trends, it is worth investing in effective and proven solutions. One of them is a modern debt collection system VSoft Collection, providing full automation of important steps in the recovery process. For teams working in the field or remotely, the VSoft Mobile Workforce application will be useful. In turn, VSoft Court Portal Connector providing integration with the Common Law Courts Information Portal will support the reduction of time for handling pleadings. By investing in modern technologies for debt collection, managers can count on real benefits from automating tedious and time-consuming activities previously performed by employees.

As you can see, trends (including in the debt collection industry) are changing very rapidly. However, they are all moving in the same direction, based on maximizing work efficiency and effectiveness. Thanks to modern, optimized tools, employees can spend more time on issues that require their full attention (entrusting some of their tasks to technology). Relying on effective and proven solutions, they can be sure that their daily work will not only gain in quality, but also translate into real profits.

He has over 20 years of experience in the IT industry and knows IT projects inside out. He has participated in their implementation both as a project manager, consultant, and manager. He has been with VSoft since 2008 and currently, as the Director of Debt Collection Development, is responsible for projects for the largest Polish financial institutions (e.g. PKO BP SA, mBank SA, Alior Bank SA, EFL SA) as well as for developing products in the debt collection area (VSoft Collection) and carrying out tasks in the field (VSoft Mobile Workforce).

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