In a recent InsideARM article, Legal and Compliance Expert Rozanne Anderson discusses how to thread the needle between keeping your firm afloat during a time of intense restriction and staying compliant — especially when the rules are foggy and ever-changing.
While technology can’t predict new CFPB rules and individual state laws (not yet anyway), it can save a huge amount of time and mitigate substantial risk in light of emergency mandates. We’ll take a look at some of the larger risks covered in the aforementioned article. Bear in mind this is not legal advice – we’re tech enthusiasts (not lawyers) and AI experts who happen to know a lot about the ARM industry. You should always consult your compliance officer on best practices.
Remote work requirements and barriers
Managing a team of human agents is complicated enough. Managing them outside of a standard call center environment can feel untenable. Some firms are considering replacing their agents with consumer-friendly digital portals — especially when some states outlaw remote collections and others simply restrict them heavily. The challenge is designing a portal that can meaningfully invite and engage a consumer in a manner that’s tailored to them, and reach agreements and payment arrangements quickly that are fair to both parties.
Using Machine Learning and a vast (but compliant) set of data points, an AI-powered portal can hold vigil for all your inbound activity while your agents are off duty. Once the contact is initiated, data like age, location, social media profiles, employment status, type of employment and other demographics can inform the style, frequency, and channel of ongoing communication. It can also quickly calculate fair settlements and set up ongoing electronic payments in a matter of clicks, not days, weeks, or months.
Again, this is a recommendation for inbound collection activity and the rules on pre-authorized debits may vary state-to-state.
As mentioned above, state rules vary and the goalpost keeps moving, so processing payments could pose substantial risk. Many compliance experts would suggest contacting a consumer before carrying on with their previous payment arrangements, but it’s not that easy when the rules for remote agent contact are in flux. One potential solve is digitizing your operations and streamlining your agency data so when a new rule or risk exposure arises you can cross reference states, consumer preferences for contact, and find viable, lower risk groups with whom to continue collections.
Interacting with consumers
The obvious benefit of digital collections is codified, consistent, and compliant communication. Of course, the downside has been canned copy that doesn’t convert, whether it’s in a form letter, email, or text message, and the consumer dismisses it as junk.
As AI gets smarter, it’s also becoming more human. Using a multitude of historical data, an AI-powered communications platform can tailor language and channels by the consumer, or help a human agent with prompts and other language that boosts their emotional intelligence. Since one of Anderson’s recommendations is "asking consumers outright whether and how the (current COVID-19) crisis is affecting them," agents will need all the EQ help they can get. And because you can continuously feed AI new data such as federal and state legal parameters, risky language can be flagged in real time and possibly mitigated immediately.
Record and retention
When Pairity set out to develop an AI-powered collections platform, our goal was three-fold: 1. Create a system that can decrease headcount while increasing revenue for firms. 2. Do this by creating a consumer experience that successfully contacts and engages unlike any other in the ARM industry. 3. Streamline the documentation process and be able to translate procedures, decisions, and actions in a way that regulators understand and will come to prefer.
The way we’ve answered the compliance question is with automatic, detailed documentation on every move our machine learning makes. And instead of deluging regulators with a mountain of hard-to-decipher technical data, we’ve also integrated detailed, user-friendly reports that show reasoning and results in charts, graphs, and other infographic summaries.
It’s a new world now, and the ARM industry will be forever changed after this unprecedented crisis. As the landscape grows more challenging, restrictive, and complex, firms who adopt rich technology to keep up with these dynamic complexities are best poised to not only weather this storm and others in the future, but thrive in the new normal.