Why AI Could Be The Answer As Companies Chase Down Debt

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Any business with a credit and collections function will recognise the “promise to pay” phenomenon. It’s the tendency of customers, when chased by a collections agent, to exaggerate how much they will pay of a debt and how quickly. But while it is a natural human instinct, when confronted by someone making demands of you, to tell them what they want to hear, this makes it difficult for businesses to manage their debts; they don’t really know who will pay what and when.

Irish start-up business Webio, which is today announcing a $4 million Series A fund-raising round, thinks the possibility of confronting the promise to pay problem could be just one benefit of its communications technology. “People feel much more able to be honest when they’re communicating in text form, rather than having a voice interaction,” explains co-founder and CEO Cormac O’Neill.

Launched in 2016, Webio has built a workflow and communications platform aimed at businesses such as utility companies, financial services firms and e-commerce merchants, all of which have to put significant resources into debt collection. The front end of the platform is a machine-learning driven chatbot through which these businesses can automate their conversation with customers via channels such as text messaging, WhatsApp and web chat.

Simple queries – such as when payments are due and how to make them – can be solved without human involvement. More complex issues are automatically routed to the company’s agents, with Webio’s technology able to identify such cases through analysis of the chatbot conversation.

“Conversations about debt are very stressful for both the borrower and the agent,” says O’Neill. “Having those conversations through a textual interface can reduce that stress – then you refer customers with particular problems or vulnerabilities to someone who has the expertise to help.”

Webio’s co-founders Cormac O’Neill, Mark Oppermann and Paul Sweeney

Gemma Day

A consumer who has simply forgotten to make a payment or doesn’t know how to pay could be dealt with entirely by Webio’s chatbot, O’Neill explains, though he prefers the term conversational artificial intelligence (AI). Someone who is in financial difficulties because they’ve lost a job or been hit by a family illness, say, will need more personal support.

Webio has been growing quickly since its launch, and accelerated during the pandemic as the shift to digital technologies gathered pace. But in the current economic environment, with the inflation-driven cost-of-living crisis escalating across much of Europe, credit and collections functions are set to be increasingly stretched. A technology-enabled response will enable them to expand capacity while still dealing with customers sympathetically, O’Neill argues.

He is sensitive to consumer scepticism about chatbots – which are often criticised as slow and frustrating – but points out that Webio’s technology is tailored specifically to the credit and collections market. “Going digital means companies can create a whole new set of digital experiences,” he argues. “That helps customers feel more confident in having those difficult conversations and, ultimately, could stop them from falling into unnecessary and significant financial difficulty.”

In any case, there is also evidence that younger consumers prefer these communications channels – and in an environment where more people work from home, privacy is an important consideration. Many financial services businesses say one reason why their use of conversational AI and digital assistants doubled over the pandemic was that customers were not keen to have verbal conversations about their finances when sitting around a kitchen table with friends or family.

So far, Webio has taken on 25 businesses that are now using its technology, working with customers in the UK, Ireland and Italy. The company’s growth is running at more than 100% year-on-year and headcount is expected to double over the next six months.

The company’s latest fund-raising will support that expansion. Its Series A round is led by Finch Capital, a specialist investor in European technology companies, and provides additional financial firepower for the company. Webio is allocating half the cash to investment in its technology – it plans a significant expansion of its R&D team, for example – with the other half set to help it expand sales and marketing capabilities.

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