Six Questions to ask your AI vendor in the Collections industry

June 27, 2019

Thinking of implementing AI and Machine Learning in your collections company? These questions will help you select the right partner and see actionable results at scale

We recently attended InsideARMS’s First Party Summit 2019, a conference tackling the unique challenges of first party collections, outsourcing, and customer care.  It was full of great conversations, insightful sessions, and a little fun mixed in for good measure. Throughout the conference, there was an overarching theme of cautiousness wrapped in real optimism across the industry. This was demonstrated in every part of the conference, whether it was learning about day-to-day operational strategies, how collection companies are hoping to leverage AI, or understanding the proposed updates from the Consumer Financial Protection Bureau (CFPB).

I’ve been a proud bill collector since 1995 and have seen many shifts to the landscape in that time. However, I honestly can’t remember a time when more was at stake. With debt levels continuing to climb, delinquencies on the uptick, and a global recession on the minds of many, not to mention an abundance of regulatory concerns, one could see today as potentially one of the best and worst times for the collections industry.

The number of agencies collecting on debt has shrunk significantly over the past few years, driven by innovation and consolidation, and this trend does not seem to be slowing down. Companies must be more efficient, more compliant, and more effective to keep pace or risk being left behind.  

Regardless of size, organizations must be nimble and open to change. And change is not new for this industry. Years ago, predictive dialers reshaped strategies, then offshoring and near-shoring again changed the game. Today, AI and Machine Learning are pushing the next major shift. Many companies in the collections space claim to be leveraging AI and machine learning, but very few are actually doing it to an extent to see real demonstrable results at scale. 

If you are a collection agency or creditor looking to implement AI in your strategies, it’s important to find the right partner that will deliver these real measurable results at scale. Here are 6 important questions to ask your potential AI vendors so you will see success in the solution.

1. Mission: Why does your company exist?
Understanding the potential vendor’s path can help you understand if their technology is something they believe in at their core, or if it’s just a side business that may or may not be a priority in the future. Choose a company whose mission is focused on AI and has a track record of constantly innovating in AI.

2. Expertise: Do you have your own AI technology or do you license it from a 3rd party? How many AI scientists/technologists do you employ?
This seems like an incredibly simple question, but you’d be surprised on the answers you will get. It’s important to make sure you are partnering with an AI company that has people who actually know what AI is, and more importantly, what it isn’t.

3. Proof Points: How many enterprise deployments do you have? How long have they been active? Do you have any deployments in Collections Industry?
Even more so than any other space, AI deployments, especially at scale, matter. If you understand how AI works, then you understand why scale is a must have. This ensures that the potential vendor is experienced and flexible enough to support you through any ups and downs. This is essential to achieving measurable results and an overall successful solution.

4. Pricing and Total Cost of Ownership: What is your pricing and delivery model for AI projects?
An AI company may be very educated and have projects at scale, but if they don’t have a tested and well-thought-out delivery model, you could get trapped in a never-ending deployment. In reality, most great delivery models are built around great failures. Knowing what not to do from experience is extremely powerful and something you want in a partner. Consider a partner that shares in your success and is incentivized to truly solve problems.

5. Domain knowledge: Do you have domain expertise in the Collections space?
A company could check every other box, but if they are missing this one, stay away! If the AI vendor has little or no domain experience in collections, then you will be the lab rat for everything they don’t yet know. Choosing a partner who has experience in this industry is vital for success.

6. Training and Tuning: Who will handle the upkeep of the AI application?
Building an AI application is one thing, managing and maintaining it requires another level of effort and expertise. It is important to know if the vendor is going to help you through the training and tuning to make sure that the system remains useful and relevant as time progresses. For the most successful deployments, it’s recommended to pick a partner who will not leave you after the product is installed, but work alongside you to ensure it is constantly performing and operating at the highest level meeting and exceeding your expectations.

AI is everywhere. We use it knowingly and more often than you probably know, unknowingly in things we do every day. Whether it’s a Google search, telling your Alexa to order a pizza, or picking your next show on Netflix, AI is quickly becoming omnipresent. AI has already begun to transform industries from insurance to restaurants, and it has begun to transform Collections as well. With the help of AI, collections will finally have real tools to battle shrinking margins, a shallow pool of agents, and an increasingly complex and vague regulatory environment. AI will help organizations overcome these challenges and more. AI is here. Embrace it and be a disruptor or don’t and risk being “Blockbuster’d”.

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