Why AI could be the answer as companies chase debt

Any business with a credit and collection function will recognize the “promise to pay” phenomenon. It is the tendency of customers, when pursued by the collection agent, to overstate how much they will pay for debts and how quickly. But while the natural human instinct, when confronted by someone asking you to tell them what they want to hear, makes it difficult for companies to manage their debts; They don’t really know who will pay what and when.

Starting an Irish Business WebioToday, which is announcing a $4 million Series A fundraising round, believes that the possibility of meeting the promise to pay problem can be only one of the advantages of its communications technology. “People feel more authentic when they communicate in text form, rather than in voice interaction,” explains co-founder and CEO Cormac O’Neill.

Launched in 2016, Webio has created a workflow and communication platform targeting businesses such as utility companies, financial services companies, and e-commerce merchants, all of whom have to dedicate significant resources to debt collection. The front end of the platform is a machine learning-based chatbot through which these companies can automate their conversation with customers via channels such as text messages, WhatsApp and web chat.

Simple inquiries – such as when payments are due and how they are made – can be resolved without human intervention. More complex issues are automatically routed to the company’s agents, with Webio technology able to identify such cases through chatbot conversation analysis.

“Conversations about debt are very stressful for both the borrower and the agent,” O’Neill says. “Having these conversations through a text interface can reduce that tension — and then you’re referring clients with particular problems or weaknesses to someone with experience for help.”

O’Neill explains that a consumer who simply forgot to make a payment or doesn’t know how to pay entirely can be dealt with through Webio’s chatbot, although he prefers the term conversational artificial intelligence (AI). A person experiencing financial hardship due to losing a job or experiencing a family illness, for example, will need more personal support.

Webio has been growing rapidly since its launch, and has accelerated during the pandemic as the pace of transformation to digital technologies accelerates. But in the current economic environment, with the cost of living crisis caused by inflation escalating across much of Europe, credit and collection functions are set to come under increasing pressure. O’Neill argues that the technology-enabled response will enable them to expand capacity while still treating customers with empathy.

He is sensitive to consumer skepticism about chatbots — often criticized as slow and frustrating — but notes that Webio’s technology is tailored to the credit and collections market. He argues, “Digital transformation means companies can create a whole new set of digital experiences. This helps customers feel more confident in having those tough conversations and, ultimately, can prevent them from getting into huge and unnecessary financial hardship.”

However, there is also evidence that younger consumers prefer these communication channels – and in an environment where more people work from home, privacy is an important consideration. Many financial services companies say one reason they have ramped up their use of conversational AI and digital assistants over the pandemic is that customers haven’t been eager to have verbal conversations about their finances when sitting around the kitchen table with friends or family.

To date, Webio has acquired 25 companies that are now using its technology, working with clients in the UK, Ireland and Italy. The company is growing more than 100% year-over-year and the number of employees is expected to double over the next six months.

The company’s latest fundraising will support this expansion. Its round is led by Series A Finch Capital, a specialist investor in European technology companies, and provides additional financial strength to the company. Webio sets aside half of the cash to invest in its technology — it’s planning a major expansion of its R&D team, for example — with the other half set to help it expand its sales and marketing capabilities.