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APAC banks to use AI in collections and recovery by 2019: FICO

Apr 12. 2018
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By The Nation

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Artificial intelligence (AI) is integral to improving collections, according to banks in Asia Pacific (APAC). In a survey conducted as part of the FutureCollect event last month, seven out of 10 senior collections managers said they are planned to integrate AI with their collections systems within the next two years, with a further 24 per cent indicating that it would be introduced next year.

These new findings are consistent with FICO’s report on AI released earlier this year, which predicted that companies would focus on putting AI into operation in 2018. Almost half (48 per cent) of banks believe that the use of AI will help them optimise their collection decisions, while 41 per cent say it will enable them to accurately predict consumer behaviour.

AI-powered analytics can improve automation in collections in many areas, from optimising contact strategy settings to ensuring human agents make the right decisions when restructuring debts or even calculating provision rates at an account level for IFRS 9 compliance.

“AI is in the spotlight in the boardrooms of most banks,” said Dan McConaghy, president of FICO Asia Pacific. “Lenders understand that they need tools that allow them to stop relying on decisions based on gut feelings or out-of-date models, and collections is a key area where AI has the potential to improve business decisions as well as the customer experience.”

AI enhancements for the FICO Customer Communication Services (CCS) solution are being rolled out this year, and will reinforce the significant impact that automation continues to deliver.

Two thirds of banks already using automated collections to contact customers have indicated it leads to faster bill payment. Respondents said the time taken to collect payments was reduced by anywhere from two days to two weeks.

In addition, 81 per cent of respondents believe automated collection leads to higher customer satisfaction. Avoiding the embarrassment of dealing with a person was cited as the key reason (52 per cent), with the convenience of being contacted proactively coming second (31 per cent) and a reminder when they have forgotten a bill coming third (29 per cent). With regard to the 60 days past due segment, 49 per cent of banks said this group of customers had grown the most. This was marginally higher than 41 per cent of banks that witnessed growth in this area in 2016.

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