Traditional recovery methods often rigid, transactional, and one-size-fits-all are proving inadequate in an environment that demands greater flexibility and responsiveness.
In this new context, effective debt recovery demands more than blanket strategies it requires a sharper focus on identifying and supporting those who genuinely need help in paying back debt. A data-informed approach allows businesses to distinguish between different customer behaviours and tailor interventions accordingly. By prioritising targeted, empathetic support for those in financial difficulty, organisations can deliver better outcomes while maintaining operational efficiency.
Understand the shifting debt landscape to meet today’s challenges
The UK’s economic outlook has added further strain to consumer finances. For example, according to the Office for National Statistics, as of October 2024, 20% of adults reported that they had to borrow more money or use more credit than usual compared to a year ago. As financial stress intensifies, the risk of non-payment increases, putting pressure on businesses to improve recovery without compromising brand reputation or customer trust.
For organisations managing large volumes of customer debt be it in utilities, financial services, telecoms, or the public sector this creates a dual imperative: recover owed balances efficiently while maintaining a customer experience that preserves long-term relationships.
Move from high-volume contacts to personalised recovery journeys
Traditional collection approaches have historically focused on operational throughput contacting as many customers as possible, as quickly as possible. But such volume-driven models often overlook a critical reality: every customer’s situation is different.
What’s needed is a shift from transactions to tailored experiences. By harnessing data and digital tools, organisations can better understand a customer’s financial context and engage in ways that are more personalised, timely, and effective. This could mean offering flexible repayment plans, proactively identifying customers in financial distress, or using behavioural data to inform the best communication channel and timing.
Use automation and AI to enhance human contact
Technology is also reshaping what’s possible in the collections space. Self-service platforms, conversational AI, and automated workflows allow customers to resolve issues quickly and discreetly without needing to speak to an agent. These tools are especially important for digitally native customers, who increasingly expect seamless, frictionless experiences across channels.
Research from McKinsey suggests that when gen AI is deployed for customer assistance and collections, it reduces up to 40% in operational expenses and improves recoveries by about 10%. Businesses can achieve up to a 30% increase in customer satisfaction scores in their collections. This is not about replacing human contact but augmenting it giving agents the tools to make informed, empathetic decisions that lead to better outcomes for both sides.
Moreover, automation can free up human resources to focus on more complex cases that require understanding, negotiation, or escalation creating a more efficient and effective overall model. The end goal is not simply to chase payments but to create a recovery journey that is intelligent, scalable, and customer-centred.
Elevate collections from a reactive task to a strategic function
For too long, debt recovery has been seen as a back-office process reactive, disconnected from broader business goals, and only loosely tied to the customer experience. In today’s climate, that view is no longer sustainable. Collections must be reframed as a strategic function, with clear alignment to brand values, financial performance, and long-term customer engagement.
Organisations that get this right will not only recover faster they will also strengthen trust, increase retention, and build reputational resilience in an uncertain market.
Start building a smarter, more agile recovery model
The future of debt recovery is data-driven, empathetic, and agile. It requires new thinking, smarter technology, and a commitment to doing what’s right for customers and businesses alike.
If your organisation is starting to reimagine its approach, we’d welcome the opportunity to share insights and explore where the future could lead.
Don’t just recover debt redefine how it’s done.
It’s time to take control with a smarter, sharper approach to debt recovery one that delivers results and protects customer relationships.
Explore our full collections hub for expert insights, proven strategies, and real-world success stories and see how your organisation can take action today.
