How AI and Automation Drive Debt Collection Performance

November 01, 2022

6 min read

Diana Kisling

How AI and Automation Drive Debt Collection Performance


According to the latest statistics from the Money Charity, the UK residents owed £1,810.7 billion at the end of July 2022. While debts are growing, the ability to pay them off is diminishing. More and more people in the UK receive calls from debt collection agents, which often go unanswered.

Public sector net debt in the UK 1997-2021


Speaking of debt collection, where financial businesses deal with a lot of confidential information and perform critical tasks, customer care should come first. History has proven that no matter how careful we are, humans  can make errors that regularly lead to real problems. Such problems are unacceptable when dealing with debt-burdened clients.


The debt collection industry is undergoing a digital transformation. It has already gone a long way from waiting in queues outside the bank to getting most services online. Today, automation is making a big difference by letting the debt collection process run smoother. It provides better data management, increased security and seamless customer support.

Problems faced by the debt collection agents

With rapidly changing technology, regulations and demographics, debt collection agencies face a wide range of challenges. Debt collection is a time-consuming and extensive task. For example, the client may require frequent support, which can take a lot of time and effort and the costs will be extremely high.



In addition, debt collection needs a great deal of legal attention. It requires verification of each defaulter, the reason for non-payment, confirmation of promise-to-pay dates, etc. Having meaningful and error-free conversations with debtors every day is an unrealistic task for most call centre agents.



Equally important is the fact that agents should be sensitive to the personal situations in which clients may find themselves. The middle ground between debt collection and empathy for customers is a balance that can be difficult to find.

How can AI-powered automation help debt collection companies

The automation of the collection process plays an important role and is already becoming an integral part of the default management process. Voice bots are not only more convenient but are also more cost-effective than a team of agents. 

Reduced burden on collection agents’ duties

The debt collection process usually begins with the agent sending an initial notice to the client with the arrears. If no response is received within a set time frame, follow-up messages will be sent. Agents spend hours sending messages, making calls and picking up the right phrases. 


A single 24/7-operating collections bot can replace an entire contact centre. Designed specifically for a variety of debt collection practices, it has script samples and debtor status lists. 


Bots can remind a debtor of unpaid debts via WhatsApp, email, SMS, Telegram or simply by calling.

Improved debt repayment performance

In everyday practice,  debt collection agents try to make as many calls as possible to contact debtors. However, this does not always mean that a needed rate of the debts will be recovered. In the worst cases, this approach can breach the requirements of the FCA and CSA regulators. 


Clients with arrears are usually reluctant to talk openly about their debts, ignoring messages and calls from agents. Knowing they’re chatting with a robot, customers will feel less pressured. The automated collection bot is impersonal and non-judgmental, so the embarrassment factor is reduced. 


Debt collection bots also simplify customer interactions, making conversations more efficient and personalised. Using customer data from the CRM, bots provide answers to questions in real-time with no chatbot-to-human handoff.

Automated customer coverage

Debt collection is becoming increasingly efficient through the introduction of automation. More than 50% of the customer interaction process can be completed by an AI assistant which can handle most of the simple issues such as identification, notification and confirmation of promise-to-pay dates.


With AI bots, agencies can automate the whole collection process by creating custom call flows. This will help make decisions based on the data collected by the bot, getting results in real-time.

Effective debt collection strategy with AI

Implementation of a digital strategy is a customer-oriented approach, which is crucial for clients. Bots allow debtors to free themselves from the guilt associated with talking about their debts and instead discuss better payment options. In addition, by analysing the debtor’s emotions, the bot can emphasise and respond in a more convenient way.


A collection bot can replace an entire contact centre. Such a bot is able to make up to a million calls and texts a day, showing an 80% increase in debt recovery. Such AI assistants can send out regular reminders and offer the debtor different options to choose from.


The Debt Collections Bot by Tovie AI is a conversational AI solution that can be easily implemented in any existing default management process. The bot automates the debt collection process, saving up to 50% on agents. That way, organisations get a higher conversion rate and extra revenue.

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