The author

Ben O'Brien

Managing Director

View profile
News & Views / Could automation technologies eventually replace traditional, manual collections?
11 September 2023

Could automation technologies eventually replace traditional, manual collections?

The money.co.uk debt index reports that four in five adults started 2023 in debt, and 46% of adults attribute this debt to a direct result of the cost-of-living crisis.

With this increased financial strain on customers, collections departments are under greater pressure to improve cash flow and customer engagement. The challenge is: operational budgets and collections capacity are not growing at the same pace as the number of struggling customers.

12 years ago, after the UK’s last recession, Jaywing worked to lessen the burden of this challenge by creating one of the first digital collections products. This technology mirrored collections strategies, using your processes to determine what you would accept as a final closing balance and allowing customers to make payments online 24/7.

When used by a multi-brand retailer in support of manual collections activities, this tech enabled the organisation to increase collections with minimal impact on resource and, crucially, meet the demands of their tech-savvy customer, empower them to self-resolve payments, and avoid any potential shame or embarrassment sometimes associated with debt.

Evidently, the automation of collections strategies, and of other manual processes like data entry and reporting, have many benefits, particularly for teams looking to improve efficiency and/or reduce operational costs. So much so that the retailer still uses our product to this day, refreshing it as and when strategies evolve.

Today, many collections strategies now include automation technologies and digital channels, but the extent of digitisation varies significantly between organisations, with some still heavily relying on traditional methods for parts of the process. On top of this, in today’s world, a lot of customers have only ever engaged with brands digitally, making a sudden switch to traditional methods liable to creating payment inertia, impacting overall collections for the organisation.

So, as organisations continue embracing digital transformation to improve efficiency and cut costs, the question arises: will traditional, manual treatments become obsolete? Or does human intelligence and interaction still play a vital role within collections?

Technology can, and should, be used to handle routine tasks like storing and tracking data and providing customers with accessible solutions through digital channels. New attribution modelling techniques, like our Collections Attribution, can also be leveraged to measure the incremental impact and return of each treatment, on each customer, and adjust budgets and strategies accordingly.

However, while technology and AI have evolved significantly, they are not advanced enough to sensitively deal with all the complex financial situations today’s customer faces, particularly in this economic climate. During complex negotiations and resolutions, the expertise and interpersonal skills of a human being must be involved, particularly where a customer has been highlighted as being potentially vulnerable. For UK banks specifically, this is increasingly important in light of the FCA’s upcoming consumer duty regulations, whereby firms must “focus on the real and diverse needs of their customers, including those in vulnerable circumstances, at every stage and in each interaction”.

An ideal balance can be found when organisations allocate sufficient budget to technology that better serves their customers, increases collections and reduces operational costs, giving collections departments the time to focus on manually intervening in complex scenarios, where they must communicate effectively, empathise with the customer, and find a mutually acceptable solution.