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What is artificial intelligence?

Over the past 10 years, digitalization and the development of lightning-fast computers have helped pave the way for artificial intelligence (AI). But what exactly is it?

AI is a field of computer science that works to develop intelligent machines and software that think and react like humans. Voice recognition, learning, perspective taking, planning and problem solving are some of the areas that it strives to emulate.

Two different types of AI are distinguished: strong and weak. Weak AI refers to systems that are able to provide limited human actions. An example of this is Amazon's voice software, Alexa, which is able to change the track on Spotify or regulate the light in your room. Strong AI, on the other hand, are systems that actually think and not just simulate human intelligence. For now, strong AI is just a hypothesis, as it has not been invented yet and it is not known if it will ever become a reality.

Collectia vs. traditional debt collection agencies

Traditional debt collection companies often follow a static and predetermined process that they believe works best. This method does not take into account the type of debtor or the circumstances of the case, resulting in long and inefficient collection processes that often result in a poorer recovery. But at Collectia, we do things differently.
In the video, you can learn more about how artificial intelligence and dynamic collection processes enable us to make the right decisions at the right time in the collection process.

Debt collection that hits the mark - every time!

Interest is growing!

You may not realize it, but AI is already in use commercially today, and probably more than you think. It is used in a number of areas such as image recognition, drug development, search engines, e-commerce, self-driving cars and much more. Artificial intelligence is also helping to improve the customer experience on many of the online platforms you use on a daily basis. For example, if you use the music service Spotify, you may have noticed that new songs are suggested to you that are similar to your taste in music.

The speech recognition software SIRI from Apple is also an example of AI technology used by many people around the world. SIRI can ask you questions and make you do things like send messages, do maths, make phone calls, etc. So we are already benefiting from this technology whether we think about it or not.

AI technology is wide-ranging and its prospects are enormous. AI is probably one of the technologies that will have the greatest impact on business and our daily lives in the future. The many possible applications have caught the eye of both Danish and international companies, which are increasingly focusing on artificial intelligence, machine learning and working with big data. Collectia is not an exception in this context, as we believe that technology can benefit our debtors and customers in many areas.

Hello to you

We would like to introduce you to our colleague Cai (Collectia Artificial Intelligence) - she is a mature girl who is crazy about data and loves to learn new things. Cai's role in Collectia is to analyze and process data and knowledge that we collect about the Danes in our IT system.

Cai analyzes large amounts of data, and she does it quickly. From the data collected, Cai is able to decide how to put together the most optimal recovery process, while choosing the communication method that each debtor prefers. Some prefer to receive formal letters, while others are more inclined to communicate with us digitally. For example, we see that young individuals in particular welcome SMS messages containing payment links that make it quick and easy to clear their debts.

Combining Cai's knowledge, our debt collection system and the latest digital payment solutions, such as Mobilepay, SMSPay and our user-friendly self-service solution for your customers, we have taken debt collection to a level not seen with traditional debt collection companies.

The advantage for you as a customer(creditor) is that we are able to recover your outstanding debts faster, better and more professionally, as we target your customer on the media and forms of communication preferred by your customer. Furthermore, Cai is able to make recommendations in relation to a possible legal process. Here, Cai can give his opinion on the outcome of a court case, so that together we can make the right decision for you in the further recovery process.

AI and machine learning is not just something we talk about at Collectia. It's actually something we work with on a daily basis. Cai is getting smarter by the day, and so are we - to the benefit of both our customers and payers.

CAI - Collectia Artificial Intelligence - Artificial Intelligence Debt Collection 2023
Debt collection score - grey background

Unique debt collection score

Our business intelligence (BI) department has developed a unique debt collection score that indicates debtors' ability to pay on a scale of 1-10. The score is based on more than 2.5 million debt collection cases that we have processed over time. The ability to pay is calculated by looking at Danes' gender, age, payment history, RKI registrations, case type, address and 25 other parameters that ensure a statistically valid assessment of the ability to pay. A score of 1 indicates that there is a high probability of payment. Conversely, a score of 10 suggests that there is a very low probability that the person is willing to pay their debts.

As a starting point, we believe that every person is different and should be treated individually. That's why the debt locator is a powerful tool that our debt collection expert, Cai, uses to develop our dynamic and situational debt collection processes to ensure that we effectively recover your outstanding debt. This is because the ability to pay can change from one day to the next. Therefore, we update and feed the score with new information on a daily basis to ensure that we use the recovery activities that are most likely to trigger a payment.

Is the future of debt collection powered by AI?

The work on artificial intelligence across industries is a continuous process that will eventually result in the creation of increasingly advanced IT solutions. The debt collection industry is no exception. Here, debt collection companies are looking for technologies that can deliver better customer experiences, streamline the customer journey, and improve overall debt collection while taking into account the individual debtor.

Initially, several companies in the industry focused on optimizing the collection process by analyzing big data and implementing champion/challenger programs to identify the most efficient collection processes based on debtorand case type. Now, the focus has shifted to developing and utilizing the technology behind chatbots, including virtual agents, to streamline case management in the collection process and automate the communication flow.

What is a chatbot and why are they important?

A chatbot is software powered by artificial intelligence that is able to simulate conversations (via text or voice recognition) with users through, for example, chat programs, websites and mobile apps. Chatbots are often described as one of the most advanced and promising forms of human-machine interaction. However, from a technical point of view, the chatbot represents the evolution of software capable of recording and answering predefined questions. Some are very sophisticated, while others simply scan for keywords and based on this, the chatbot delivers an answer that matches the detected keywords or matching phrases.

Virtual debt collection agent

One of the more recent inventions in the AI universe are virtual debt collection agents (combination of AI and chatbots), which are able to communicate with debtors and perform case-related tasks.

Examples of tasks performed by virtual debt collection agents:

  • Setting up an instalment facility

  • Setting up a moratorium

  • Display of case information

  • Referral to debt counsellors

  • Answers to general questions

At the moment, virtual agents are just an idea, but it is far from unlikely that we will see them in the near future. Collectia and several other financial companies are already looking at the possibility of realizing this dream.

Virtual debt collection agent

Are virtual debt collection agents the future?

We believe that the next step in the work on artificial intelligence in debt collection is virtual agents that, with human characteristics, can act as debt counselors and negotiate repayment independently. The virtual agent of the future will be a further development of the existing chatbots found in apps and on websites today. It will be able to simulate human emotions and characteristics and play an important role in the debt collection process of debt recovery agencies.

It is impossible to predict what the future will bring. However, one thing is certain. Digitalization, regardless of industry, will drive innovation and competitive advantage for businesses going forward. One of the main benefits of a digital recovery strategy and the use of artificial intelligence is the ability to leverage automation to determine actions in the customer journey (the recovery process) where a real human interaction should be performed to deliver the best and most efficient service. Although in theory a virtual agent can handle large and important parts of the debt collection process and communication with the debtor, there are situations where human intuition, understanding and decision-making are needed to make the collection and customer handling more efficient.

Chatbots, including virtual agents, play a role in the overall automation of call centers and outbound departments of debt collection agencies, as they can combine machine learning with expertise based on the experience of real debt collection agents. Chatbots taking over certain functions in the collection process can potentially result in the following benefits:

  • Debtors will have 24/7 access to a support function that can answer questions and help the user through the process

  • Debtors can use the virtual agent to define preferred communication channels early in the recovery process. Information that will subsequently be included in the dynamic recovery process to improve the possibility of recovery.

  • Debtors can talk about their debt problems in a safer environment as they are not talking to a real person (in our experience, many debtors feel uncomfortable talking about their debts).

  • The debt collector can automatically obtain information about the debtor's behavior and the circumstances of the case based on indicators recorded in the conversation. This means being able to identify and initiate situational activities such as suggesting a call from a real debt counselor.

  • The virtual agent can identify situations where human interaction is necessary. The agent can then present contact information to the company's support center

Chatbots and virtual agents, we believe, will represent indispensable tools in the recovery process to combine digital and traditional communication channels. At the same time, the technology is seen as a unique way to leverage artificial intelligence to concentrate human resources in situational activities to boost overall recovery.