5 killer ways automation improves the debt collection process

The development of technology has facilitated the automation of nearly all business activities at banks and financial institutions. Lending is one of these organizations’ fundamental revenue-generating mechanisms. Therefore, whether or not the corporation records profits or losses over a specific period is greatly influenced by debt collection. It has an immediate effect on the general revenue of a borrowing company.
Due to growing debt consumption, it is even more critical for lending institutions to implement a reliable debt collection system. Debt recovery is more straightforward in theory than in practice.

What is debt collection?

“When firms or consumers legally required to pay back the money they owe are approached by creditors and collectors for payment, this is called debt collection.”
Besides debt collectors, a debt collection agency can also interact with you to get overdue payments. These unpaid debts can be anything, such as; (Zinn, 2022)

• Personal loan debt
• Medical debt
• Automobile debt
• Unpaid bills
• Student loan debt

It is a complicated task that calls for lenders to give debtors multiple chances to pay off the debt they have been granted before they can take any harsh steps.

How to improve debt collection?

There are five best ways to improve debt collection rates as mentioned below: (Rose, 2021)

1. Proactively support struggling customers
2. Centralize data
3. Implement a multi-channel payment approach
4. Make payment options easy
5. Identify the best communication method and then automate

Now, the main concern is how automation improves the debt collection process. Numerous strategies will enhance the debt recovery process through automation. Let’s discuss them in detail.

killer ways automation improves the debt collection process

A debt collection system (automation) was established to make things easier for lending institutions. A debt collection system reduces the lender’s reliance on outside parties.

What is a debt collection system?

“It is software that enables lenders to:

• Estimate, organize, and prioritize debt collection and recovery
• keep track of loans disbursed
• follow up with individual debtors.”

According to Reports and Data, the global debt collection software industry is expected to reach $5.54 billion by 2028 (Debt Collection Software Market By Deployment (On-premise, Cloud), By Offering (Software and Services), By Organization Size, and By End-Use (Banks, Collection Agencies, Finance Companies, Healthcare), Forecasts to 2028, 2020).

A debt collection system is often associated with the lender’s enterprise resource planning (ERP), and a loan management system will assist lenders in gaining an overview and control over the debt management method. It essentially automates debt collection using cutting-edge technologies.

Optimize resources

Automation includes the use of Artificial intelligence such as Chatbots etc. Artificial intelligence (AI) in debt collection can evaluate the collection routine and trend to determine which affiliate is efficient at collecting what type of debt and afterward rate the time spent on client accounts by an associate. This allows for faster account clearance and permits lenders to concentrate more on accounts with a favorable outcomes.

Automatic payment reminders

Automated text message collection reminders have an engagement rate of over 68%. Collectors can even try using automation to boost response times. According to a new study, little adjustments to automated phone alerts are a cheap approach for businesses to encourage customers to recall their intents and deepen their mental involvement.

Chatbots Magazine reports that by the end of 2022, bank systems will use chatbots to automate up to 90% of client communication. (Chatbot Report 2019: Global Trends and Analysis, 2019)

In the unlikely event that a borrower skips a payment, the lenders can get in touch via an automated outbound call asking the users to choose their preferred method of action. For illustration, the phone calls may offer the following choices:

1. Press “1” if prepared to pay the bill immediately.
2. Press “2” to confirm that you want to pay by the end of the day.
3. Hit “3” to indicate that you plan to pay by the end of the week.
4. If you request assistance and are not yet prepared to submit a payment, Lenders may send reminders and warnings following the option the consumer selects.

Better focus on delinquent accounts and CX delivery

According to a survey by Intrum Justitia’s European Payment Indicator, “57% of enterprises in Europe claim to be experiencing financial issues as a result of late payments and Greece topping the list with 96%.” (Liquidity squeeze as business debt write-offs escalate, 2012)
This is where artificial intelligence comes in handy allowing businesses to use advanced technology according to their benefit. Digital technologies can relieve some of the everyday work stress on debt collectors. They may simplify the complicated problems relating to your past-due accounts and provide these clients with tailored support to resolve their issues. It leads to a quicker, highly efficient collection procedure that increases income and provides a better CX throughout the collecting process.

Improve collector’s productivity

Collectors once carried a suitcase with copies of the debtor’s documentation, a notebook, legal documents, and other items. Nowadays, a person’s mobile phone serves as a suitcase and much more.

• By improving efficiency: Now, because of the ease of the automation process, collectors can quickly transport a device to a remote area, get in touch with the client, and, if necessary, retrieve the guarantor’s details efficiently. Using automated mobile collection software, collectors can stay productive while out in a specific area.


• By minimizing errors: Automation significantly reduces the possibility of mistakes. In this way, debt collectors do not need to pay additional efforts into correcting the errors, instead focusing on their prime duty and improving productivity.


• Eliminate manual tasks and processes: Software implementation enables any organization to reduce hectic paperwork. This provides an opportunity for the staff to save their time and energy for their productive work.

The most desired characteristics influencing productivity are reminder notifications, day planners, and route directions. Additionally, it enables collections agencies to monitor the assignments that are still outstanding on their phone website.

Control risks and increase compliance with corporate policies

• In the worst situation, when the lender is necessitated to take strict action against a borrower, an automated debt collection tool guarantees that the lender is adhering to all applicable rules and regulations before implementing any further action.
• The automated debt collection process will prevent the lender from proceeding to the next stage if a certain step under specific legislation is not performed.
• The system will inform the lender of the steps needed to proceed to the next one. Therefore, such a system for collecting debts ensures that lenders abide by all regulations controlling lending and debt collection.

Automate your debt collection process by hiring MedsIT Nexus

Collaborating with an outsourced firm to implement an automated debt collection process saves significant time and energy. So, are you ready to take your debt recovery and collection activities to the next level with automation? Do you wish to get more revenue on your accounts receivable? MedsIT Nexus, with over five years of expertise, is ready to assist!
We offer a variety of services that will not only speed collections automation but will also enhance procedures throughout your firm. MedsIT Nexus medical billing and coding services can assist you in handling accounts and collections using the most excellent infrastructure, cutting-edge automated technologies, and sophisticated software. Moreover, the confidentiality of the information of all our clients is our top priority; therefore, we utilize HIPAA-compliant services. Feel free to contact me.