Many fintech companies, like ClearGrid, are building AI-driven debt collection that helps banks, fintechs, and lenders recover more debt without resorting to customer harassment.
Debt collection in emerging markets often feels outdated and can be costly — damaging borrower trust. As consumer lending surges and regulators push for fairer practices, legacy collection outfits are struggling to maintain pace.
In this case, developing AI to help modernize debt collection, and recovery outstanding funds from customers without resorting to harassment came into the lending system.
Additionally, many of the online loan apps and Buy now, pay later (BNPL) platforms you may know today are usually offering unsecured loans and this type of lending practices are skyrocketing almost everywhere. Unsecured loans pose significant risks for lenders because they lack collateral, meaning there is no asset to seize if the borrower defaults. This leads to higher default rates and potential financial losses.
So, lenders often charge higher interest rates to reduce risks, but this may not always cover losses from delinquent accounts. However, modernizing debt collection — and loan recovery — with AI is the future of debt resolution for many of these fintechs, banks and online lenders.
How AI-driven debt collection works
AI-driven debt collection uses machine learning and automation to optimize the recovery process by analyzing customer behavior, predicting repayment likelihood, and personalizing communication strategies. It can segment borrowers based on risk profiles and tailor outreach methods—such as emails, texts, or calls—at optimal times for higher engagement.
For ClearGrid, the company is in-between lenders and borrowers, using AI to automate the collections process. It works in the sense that the lenders integrate their platforms via ClearGrid’s API, sending borrower accounts for processing. ClearGrid states that its AI models assess repayment likelihood, forecast customer behavior, and customize outreach across various communication channels.
Additionally, 95% of ClearGrid’s operations are fully automated, including AI voice agents that handle hundreds of thousands of calls daily. For borrowers preferring human interaction, the platform facilitates direct conversations and feeds the insights into the startup’s many models.
In general, AI-driven debt collection system also automates routine follow-ups, reducing the need for human agents and cutting operational costs for lenders. More so, natural language processing (NLP) enables chatbots to handle negotiations and answer debtor queries efficiently.
