The solution lies in pivoting communications efforts and making greater use of artificial intelligence (AI) for increased digital capabilities. The debt recovery industry has traditionally relied on slow-to-evolve systems and legacy technologies, but new AI-powered tools are allowing the sector to modernise rapidly.

A major shift we’ve witnessed is the move towards digital conversations. Where once letters and call centres dominated, AI agents now handle early stage interactions via SMS, WhatsApp, and webchat.

At Lantern, we’re currently running a proof of concept with Webio, and early results are promising. More than half of customers are choosing to engage on these digital channels. Even traditional methods like letters are being enhanced. By including QR codes that link directly to WhatsApp, organisations can bridge the gap between paper communications and instant digital engagement.

The transition is more than just efficient; it is empathetic and flexible, too. Using AI allows individuals to self-serve at their own pace and comfort level, preserving dignity while making the debt resolution process less intimidating. AI is also helping to solve long-standing technical challenges. Some organisations have built AI-driven APIs that connect with legacy CRMs, enabling real-time data exchange without expensive overhauls.

This facilitates tailored repayment plans, dynamic affordability assessments, and features like screen reader support and multilingual options, making services inclusive and accessible.

Automation is transforming operational efficiency, too. In some cases, up to 65% of customer interactions are handled by AI initially. This frees up advisers to focus on complex cases, improving speed and quality of service.

AI-driven platforms also support modern payment options, including Apple Pay and Google Pay, boosting convenience and successful payment rates. One organisation reported a 20% rise in successful repayments after enabling these options.

Benefits calculators are being added to customer portals, helping people identify government support they may be missing. It’s a small but meaningful step in making the debt journey more manageable.

What’s more, AI and data integrations are supporting early intervention for vulnerable customers. Real-time assessments can flag signs of vulnerability, triggering additional support services and intervention from debt charities. This ethical, proactive approach is setting new industry standards.

Debt management is never easy, but with thoughtful, ethical applications of AI, it can be made more human and more efficient. The technology is here, so the sector should embrace it.