Automated Debt Collection System
Features, Integrations, Benefits, Costs
Having 18 years of experience in financial IT, ScienceSoft designs and implements powerful automated debt collection solutions.
Automated Debt Collection Software: The Essence
Automated debt collection software is an all-in-one solution aimed to streamline debt recovery workflows and achieve 360° view of collection activities and creditor-debtor interactions. Such software also simplifies regulatory compliance and can provide analytics-driven optimization of debt collection processes.
With robust automation of debt collection, companies can decrease operational costs, ensure timely cash inflow, and reduce bad debt.
- Main user groups: lending services providers, debt collection agencies, banks, merchants selling on credit.
- Key integrations: accounts receivable software, a CRM or a loan servicing system, a customer portal, etc.
- Implementation time: 9–12+ months for a custom automated debt collection system.
- Development costs: $150,000–$500,000+, depending on a solution's complexity.
- ROI: up to 760%.
Key Features of a Debt Collection Automation System
Each automated debt collection solution ScienceSoft creates is unique and provides custom-made functionality tailored to the client's business specifics. Below, we share a comprehensive list of software features commonly requested by our customers:
Debt collection planning and optimization
- Automated identification of debts to collect based on the analysis of real-time data about received and due payments.
- Automated debtor segmentation and scoring based on user-defined criteria (delinquency level, debt amount, debtor credit history, etc.).
- Prioritizing debts for collection based on debt aging, debt amount, debtor value and risk, and more.
- Scenario modeling and what-if analysis for various debt collection strategies.
- AI-based suggestions on the optimal debt collection strategies for particular debtors and debtor segments based on the analysis of historical data about creditor-debtor interactions and debtor payment behavior.
- Automated creation of debt collection schedules.
Debt collection task management
- Automated assignment of debt collection tasks to the collectors based on their qualification, availability, schedule, location, etc.
- Automated creation and updating of collection task lists.
- Rule-based routing of debtor calls and omnichannel textual requests to the appropriate collector.
- Setting user-defined KPIs for each collector.
- Configurable dashboards providing debt collectors with an overview of assigned tasks, their priority and deadlines.
Automated debt collection execution
- Template-based creation of textual reminders on due payments for various debtor segments, tailored by different languages, frequency, tone, etc.
- Automatically sending personalized payment reminders, including voice mails, to debtors via email, messaging apps, SMS, a customer portal, and more.
- Scheduled phone/VoIP collection calls.
- AI-powered capturing and processing of debtor responses and promises to pay, including those in the textual format and in the form of recorded voice messages.
- Instant routing of debtor responses that the integrated chatbots and IVR bots failed to recognize for processing by human agents.
Debt collection control
- Audit trail of collection-related activities and interactions with debtors.
- Real-time tracking of the received and outstanding debt repayments.
- Monitoring expected vs. actual debt repayments.
- AI-powered verification of debt collection compliance with the internal collection policies.
- Configurable notifications to collectors, e.g., about the assigned tasks, received payments, broken promises to pay, etc.
Debt enforcement automation
- Automated initiation of debt enforcement actions triggered by user-defined events, e.g., receiving a debtor's refusal to pay an overdue amount.
- Automatically generating enforcement notices and sending them to debtors.
- Template-based creation of debt repayment arrangements and multi-currency invoices.
- Rule-based workflows for debt restructuring, purchase, sale, and bad debt write-off in case of a debtor's bankruptcy.
- Automatically generating and sending debt enforcement requests to the legal enforcement authorities.
Dispute management automation
- Automated capture and validation of debt-related claims and supporting documents submitted by debtors.
- Rule-based decision-making on claim approval or denial.
- Automatically sending debtor notifications about approved and denied claims (via email, messaging apps, a customer portal).
- Assigning credit memos to debtors upon valid claims.
Debt collection analytics
- Automated calculation of KPIs such as the total debt amount recovered (by period, debtor segment, collector, etc.), debtor response rate, outstanding payment amount, DSO, and more.
- AI-based suggestions on the appropriate debt collection strategy adjustments based on the analysis of debt repayment progress, collection team performance, and debtor behavior.
- ML-powered forecasting of the expected payment dates and debt recovery rates for particular periods.
- Automated generation of reports on received, delayed, and missed debt repayments.
- Scheduled and ad hoc report submission to the credit bureaus.
Security and compliance
- Compliance with the Fair Debt Collection Practices Act (FDCPA), the Consumer Financial Protection Bureau (CFPB) requirements, the Telephone Consumer Protection Act (TCPA), the Gramm-Leach-Bliley Act (GLBA), SOC1 and SOC2, SOX, GDPR (for the EU), Basel III and CCAR (for banking), other relevant global, country- and industry-specific regulations.
- Configurable debtor data retention and deletion policies.
- AI-based fraud detection.
- Data encryption.
- Multi-factor authentication.
- Role-based access control.
- To trigger automated debt collection procedures and keep the collectors up to date on debt repayment progress.
- To accurately record due payment amounts under debt extension, restructuring, selling, or purchasing agreements and timely write off bad debts.
- For data-driven debt collection planning and automated input of up-to-date debtor information in the collection notifications, repayment agreements, etc.
- To keep sales agents up to date on debtor performance and timely initiate service termination or limit the access to particular products in case of non-payment.
Alternatively, instead of a CRM, debt collection software can be integrated with a loan servicing system of a lending services provider or a debt collection agency.
- To streamline debtor communication and speed up the delivery of debt-related documents.
- For automated processing of the information submitted by debtors.
Communication channels
Email, messaging services, an auto dialing system, etc.
To quickly and easily reach debtors and get their responses via various communication channels.
Credit rating platforms
of the selected credit rating bureaus (e.g., Experian, Equifax)
To easily access up-to-date information about a debtor's financial health (e.g., credit rating dynamics, bankruptcy status checks) and quickly submit credit reports.
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Advanced analytics To ensure accurate, data-driven debt collection planning and get intelligent recommendations on collection strategy improvements. |
Omnichannel collections To reach debtors via a communication channel of their choice and drive high debtor response rate. |
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Easy-to-use APIs To ensure seamless integration between debt collection software and other business-critical systems and eliminate double data entry. |
Intuitive UX/UI and proper user training To help debt collectors quickly learn how to apply automation to streamline their daily tasks. |
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Consider implementing an AI-powered debt collection chatbot on top of your customer-facing app. Intelligent digital assistants help eliminate the low-level debtor interaction tasks and provide instant upload of the communication details to debt collection software. This step alone helps achieve up to 70% reduction in debtor coverage costs.
Based on ScienceSoft's experience, custom debt collection software of average complexity requires $150,000–$300,000 in investments, while building a complex system powered with advanced analytics may cost $500,000+.
Debt collection software drives significant operational cost savings and helps prevent revenue leakage. In a long-term perspective, a custom system can bring up to 760% ROI for large companies. An average payback period for such a solution is about 6 months.
Benefits of Debt Collection Automation
Off-The-Shelf Debt Collection Automation Software ScienceSoft Recommends
Below, we list the leading offerings in the market of automated debt collection software. ScienceSoft can help you implement the tool that best fits your business specifics, as well as customize the product to your needs and integrate it with your internal systems.
TietoEvry Collection Suite Nova
BEST FOR
Debt collection services providers.
FEATURES
- Comprehensive debt collection automation engine.
- Real-time monitoring of debt repayments.
- Full traceability of communications with debtors across multiple channels, including printed correspondence, phone, SMS, email, voice messages, eNova portal.
- Automated reporting on user-defined KPIs.
- Prebuilt APIs to integrate with necessary corporate systems.
CAUTIONS
It may be hard to customize the software to your specific debt recovery needs.
Pega Collections
BEST FOR
Banks and lending services providers.
FEATURES
- AI-supported recommendations on optimal collection strategies for each particular debtor.
- Scenario modeling and visualization for various collection strategies.
- Omnichannel debtor interactions, including those via social networks.
- Real-time tracking of debt collectors' performance.
- Rule-based prioritization of collection tasks.
CAUTIONS
It may be costly and time-consuming to integrate the solution with your existing corporate systems.
Experian's Debt Collection System
BEST FOR
SMEs selling on credit.
FEATURES
- Rule-based debtor segmentation by region, debt amount, behavior, and more.
- Intelligent prioritization of debt collection activities.
- Real-time tracking of debt repayment transactions.
- Native integration with Experian's credit database to get real-time updates on a debtor's financial status changes.
- Compliance with FDCPA, CFPB, and other consumer protection regulations.
CAUTIONS
Experian's system doesn't provide end-to-end automation of debt collection workflows.
When to Opt for a Custom Debt Collection Automation System
ScienceSoft recommends building a custom solution in the following cases:
- You need a solution to automate highly specific debt collection tasks, e.g.:
- Debts prioritization for collection based on custom criteria.
- Processing debtor responses and documents in user-defined languages.
- Defining optimal personalized collection strategies for high-value corporate debtors.
- You want smooth and cost-effective integration of the automated debt collection software with your business-critical systems (CRM, accounting software, a customer-facing platform, etc.).
- You have large teams involved in debt recovery tasks and want to avoid costly subscriptions to a market-available debt collection tool, which scale as the number of users grows.
- You need a solution that is compliant with the latest debt collection regulations of the countries you operate in.
- You need a flexible automated system that is easy to evolve as your business grows or new legal compliance requirements arise.
Implement Effective Debt Collection Software with ScienceSoft
Entrust the implementation of your debt collection system to professionals. In financial software development since 2005, ScienceSoft provides a full scope of services to help our customers launch reliable automated debt collection solutions with no hassle.
Consulting on automated debt collection software
We introduce optimal features, architecture, and tech stack for your solution and prepare a plan of integrations with the required systems. You also get a detailed implementation roadmap and expert advice on security and compliance to minimize project risks.
Implementation of automated debt collection software
We handle every step of software development from design to QA and launch. In addition, we conduct user training in a convenient format. You benefit from the world-class solution quality and prompt implementation. Our team is also ready to stay with you for continuous system support and evolution.
A Featured Success Story by ScienceSoft
Debt Collection Automation for a US-Based Microfinance Company
ScienceSoft developed custom loan management software with automated debt collection capabilities for a reputable financial services company with 50+ offices across the US. The solution provides:
- Automated workflows for company-specific debt collection strategies.
- Configurable dashboards with real-time updates on the received and due debt repayments.
- Scheduled and ad hoc reports on credit repayments (50+ report types).
- Seamless integration with a company's existing software ecosystem and a US-wide SMS service platform.
About ScienceSoft
ScienceSoft is a global IT consulting and software development company headquartered in McKinney, Texas. Since 2005, we provide full-scale digital transformation services to help our customers establish effective automation of their debt collection processes. In our projects, we employ robust quality management and data security management systems backed up by ISO 9001 and ISO 27001 certifications.