#watsonx.ai

#GenerativeAI

#collections

#recovery

#debtcollection

#loandefault

Industry Context:

Lending money to clients is primary business activity for banks to generate income from interest, fees and charges collected from clients is a major revenue stream.   Banks dedicate a lot of human & technology resources to reduce the risks to this revenue due to default on payments. However, loan defaults are a business reality and banks dedicate a lot of human and technology resources to collect the outstanding payments from clients.

Typically 0.76% of total revenue is in uncollected state, with a 59% chance that the uncollected revenue may have to written-off 

( Source: IBM Institute of Business Value – AI impact in Finance  benchmark report, 2024)

Business Challenge:

• Managing Client relationship: 

  This is very sensitive, client facing process to engage for outstanding payments and ensure successfully repayments.

• Effective Negotiations & Repayment Plans:

  Every client situation is different, and each conversation has to be contextualized to ensure the next actions/options offered are the most optimum for both client and banks

• Manage Risk & Ensure Compliance:

  There is a very high regulatory oversight and regulations that banks have to adhere to protect the rights of the clients. Also, this is very high visibility process and banks have to ensure no missteps are taken to avoid reputational risks.

• Increasing Agent Productivity:

  The collection agent has to deal with lot of information, guidelines, client communications and apply his/her mind to decide the next actions. There is high degree of manual tasks performed leading to productivity plateau.

How Generative AI can help:

The capabilities provided by foundational models around analyzing textual information, generate insights and content can be leveraged to deliver these transformational capabilities 

• Collections Data analyzer:

  Assist agents to view, query and analyze all the collections related information from different systems, formats and sources

  Reduce data analysis efforts by 90%

• Collections Strategy Assistant:

  Generative AI to generate detailed, personalized collections strategy and plans based on banks’ guides

  Create collections strategies 50% faster
• Client Communications Engine:

  Generative AI can provide ready insights from clients' calls/messages and also create draft communications customized for clients

  Create communications 50% faster
• Compliance Assistant:

  Generative AI monitors client interactions, agent behaviors and communications, collection strategies to identify possible red-flags and compliance risks.

  Reduce compliance efforts by 20%

IBM Offerings:

IBM watsonx.ai

Create generative AI and traditional AI models for insights across collections lifecycle

IBM watson discovery                                                                                                                                                                                                                                                                                                                   Cognitive search and content analytics for collections related data and documents                                                                                                                                                                                                                   

IBM watsonx orchestrate

Create personalized AI assistants and agents to automate and accelerate collections tasks

IBM watsonx assistant

Deliver Conversational AI for agents & clients for self-service options across collections journey

IBM InstructLab

Collaborative customization of LLMs to create models with specialized collections knowledge

IBM Automation

Automation solutions for collections process automation and optimization to reduce costs and boost productivity

IBM Process Mining

Unlock efficiencies in collections workflows with AI-infused process intelligence for discovery, insights and automated RPA generation