With the ways that technology has changed consumer behavior, lenders have been rethinking their approach to debt collection. A room full of people calling delinquent debtors may no longer be the most efficient or effective way to collect debts. Instead, lenders such as banks are using communication technology to more quickly reach clients with a tone that sounds and feels less aggressive.

Efficient debt collection may become a necessity given the current financial status of households and businesses throughout the United States. Many lenders have allowed borrowers to defer payments or use forbearance because of the financial hardship they are suffering during the COVID-19 pandemic. When the deferrals have ended, however, lenders may need to ramp up their debt collection efforts.

New Ways to Facilitate Collections

There are three main ways that banks are using technology to help with debt collection: