Automation is becoming a driving force in collections success. When you compare the workload handled by receeve, powered by automation, to the FTE equivalent, it surpasses the efforts of over 150 full-time agents, freeing up actual agents to focus on high-value tasks, underscoring its impact in optimising collections processes.
Consider the following statistics:
- 89% of financial services leaders believe that the first financial services companies to deploy autonomous finance will carve out a large competitive advantage;
- 60% of financial institutions believe that autonomous finance enhances personalisation capabilities, which improves their customer experience (CX).
As things stand, over 50% of the following finance and accounting activities are mostly or partially automated: processing of transactions, procurement, preparation of financial reports, and planning/forecasts, etc.
Automation has already made its way into the financial services industry—and it’s likely to accelerate in the near future. This blog will provide some context into what autonomous finance is, delve into its benefits, and explore how it can be applied in debt collection.
What does ‘autonomous finance’ mean?
According to Forrester, autonomous finance can be described as: “Algorithm-driven financial services that make decisions or take action on a customer’s behalf”. As International Banker states, “By using technology, particularly artificial intelligence (AI) and automation, autonomous finance seeks to alleviate a significant burden from consumers’ shoulders by automating a number of key financial decisions and processes.”
Over the past few decades, financial services have become increasingly technologically driven, culminating in the development of autonomous finance. According to Rachid Molinary, senior vice president of digital strategy and innovation at Spain’s Banco Popular: “Autonomous finance is the organic convergence of all the technology innovation we’ve been seeing over the years, from AI to unprecedented access to data, to finally deliver[ing] on self-driving finance.”
You’ve probably come across autonomous finance before, such as robo-advisors like Nutmeg and Wealthfront. These companies automate trades on consumers’ behalf, combining next-level data analytics and automation capabilities to make the most out of the latest market developments. Or consider Gabi, for instance, a company that compares and shops around for new insurance policies to automatically optimise an individual user’s coverage.
However, it’s worth pointing out that the term “autonomous” encompasses a wide range of capabilities. According to the appzen’s Autonomous Index, there are 6 distinct levels, as shown by the image below.
As you can see, levels 4 and 5 are the most valuable forms of autonomous finance, using artificial intelligence (AI)-based solutions to automatically handle 80 - 100% of all decision-making. All businesses should strive to reach levels 4 and 5, leveraging the full benefits of AI and machine learning to increase efficiency and scalability.
What are the benefits of autonomous finance?
There are four distinct benefits that financial institutions can gain from implementing autonomous finance:
Better CX
According to Salesforce, 87% of financial institutions believe that autonomous finance is the key to improving the CX. This is more important than ever, given that 66% of today’s customers want their financial institutions to understand their specific needs.
AI-based autonomous finance can source, merge, and combine internal and external data in real-time. By analysing how customers behave, financial institutions can better predict what they want—and what they need. Telus International states that autonomous finance makes life simple for customers, saves them money, and enables institutions to provide proactive support. This will therefore improve their CX, driving long-term loyalty and customer retention.
Greater efficiency
It should come as no surprise that automation is better (and quicker) than humans when it comes to certain tasks—especially those requiring large-scale data analysis. By using automation, financial institutions can make better use of their wealth of customer data. They don’t have to spend hours, or even days, understanding what the data means before taking action. Instead, autonomous finance makes this process almost instantaneous.
A sizeable competitive advantage
The points above show that financial institutions can enhance their know your customer (KYC) processes, improve their CX, and become more efficient by leveraging autonomous finance. These three benefits will offer them an unparalleled competitive advantage. They will move quicker than their competitors and please more customers. Over time, this competitive advantage will increase the gap between institutions that use autonomous finance and those that do not.
How can autonomous finance drive collections success?
Autonomous collections software drives success at every stage of the collections process. Automated collections scoring systems speed up credit risk assessment processes, analysing data from internal and external sources through their own algorithms, and identifying low/high-risk customers in the early stage.
The system will then follow the collections strategy you created, automatically sending dunning messages (whether emails, SMS, or through other communication channels) to your customers. It will gather insightful details regarding end-customers’ behaviours, their preferred channels, and the times when they respond to messages. AI-based solutions will collect this data before displaying it in real-time dashboards. Collections departments can therefore make informed, data-driven decisions that help them resolve more customer debt and increase their ROI.
Better resource allocation, driven by automation
Consider the following scenario: Mike, a valued customer, is behind on his credit card payment due to selling his company. While a conventional approach might deploy a generic chatbot to contact him, receeve leverages AI to segment and identify Mike's case as low risk, with a high likelihood of repayment. Consequently, receeve issues a gentle reminder after a couple of days, tailored to the customer’s unique situation.
This personalised approach contrasts with the one-size-fits-all automation used by many collections systems. While a chatbot might irritate Mike, a thoughtful reminder could foster gratitude. The difference lies not only in the method but also in the short-term and long-term outcomes.
Not all late payments stem from forgetfulness; some result from genuine financial hardships. This is where our AI-driven segmentation and strategies prove essential, maximising the effectiveness of automating touchpoints. Depending on the results of those touchpoints, automatically monitored and acted upon by our platform, the agent can be directed to call the debtor, propose an instalment plan, or make calls based on real-time feedback.
Our typical client manages 50,000 active claims per month, sending out 150,000 emails and 15,000 SMS messages through our platform. These communication journeys result in tens of thousands of automated payments. When you compare the workload handled by our software to the FTE equivalent, it surpasses the efforts of over 150 full-time agents, freeing up actual agents to focus on high-value tasks.
receeve’s key purpose is to offer intelligent automation that's both sophisticated and simple to implement. Powered by data and AI, the platform transforms debt management by delivering timely, personalised communications at scale, empowering debtors to resolve their issues independently while preserving the human touch without the associated resource costs.
Make the most out of autonomous solutions
Autonomous finance is the future. In order to gain a long-lasting competitive advantage and not lag behind this emerging trend, implementing automation-based solutions that help you reduce manual effort, increase efficiency, and provide greater customer experiences is your best strategy moving on.
Ready to learn how automation can help drive better resource allocation and increased profitability in your operation? Book a call with us today and transform your debt management success with receeve.
