Advanced Analytics Insights
by Zaid Kamhawi, CEO, Qarar

In the first of a series of articles exploring the impact of Artificial Intelligence (AI) in the banking and finance sector, Zaid Kamhawi reviews using AI to enhance customer-focused service in collections.

This is an interesting question because you would not usually expect to see ‘happy’ customers in a collection environment!  However, collections and debt management has greatly benefited from the use of technology and AI. That means interactions with customers can be streamlined and smoother, so collections teams focus on core tasks at hand — reducing debt.

There are a number of examples where AI can be deployed, including debt simplification — for instance, to help customers who are having difficulty managing multiple credit cards debt.  Solutions are already out there now helping alleviate the situation, and these tools have the ability to help customers decide which credit card to pay first and how best to reduce the outstanding balance, and how to effectively go through the process of reducing all that debt by incurring the least amount of interest. 

When it comes to the bank-customer relationship, what we are now seeing are automated 2-way automated communication tools that directly interact with the customer.  So, the interaction itself can be less invasive.  AI tools can reach out to the customer to remind them of their late payments, so the customer does not have to talk to an agent and have that difficult conversation. These tools go way beyond just a two-way communication. They are driven by a many sophisticated algorithms and models in the background that also inform the tool of the optimum amount to request the customer to pay based on their affordability as well as their past performance.   

The motivation behind this solution is to bring back the customer to becoming a current and active customer, and the best way to achieve that is to help them keep their commitment to repay the outstanding debt.  For example, if a customer owes a thousand dollars, but we know — through analysing a lot of the information about the customer — that they could only afford to pay five hundred dollars now, then the best way is to ask them to pay what they can afford.

These AI tools have become so intelligent that they can then ask each customer for the affordable amount that they can afford to pay, get them to pay that amount and then continue every month looking at the customer’s history, looking at all of the available information and make it easy for the customer to come back to an active current customer.

It is a classic example of a win-win situation for all.