A new study on artificial intelligence in debt collection reveals that AI-driven calls are consistently less effective than human callers at persuading delinquent borrowers to repay, especially over the long run. While AI offers clear cost advantages by reducing staffing needs, its apparent inability to create the same sense of moral obligation or urgency poses a strategic challenge for collection agencies, fintechs, and financial institutions alike.
The researchers used collection data from a consumer finance company in China that makes installment loans to consumers. Borrowers who don’t make their payments are contacted by phone by collectors. Those calls are made by both human and AI collectors. Both humans and AI are attempting to get the consumers to make promises to pay, according to the report.
Why it matters:
- Debt collection has always been a “people business,” relying on negotiation, empathy, and social pressure to prompt repayment.
- AI collectors — using voice recognition and automated scripts — are seen as a breakthrough to handle large volumes of calls efficiently, but the study shows they underperform compared to human agents in total amounts collected.
- Professionals across the credit and collections landscape must now weigh the short-term savings of AI against potential reductions in recovered debt and long-term impacts on borrower behavior.
By the numbers:
- Researchers found that AI-only callers collected as much as 5-9% less in net present value of overdue balances over the first month of delinquency compared to humans.
- Even when AI handed off borrowers to human callers after several days, the gap narrowed but never fully closed. Debtors initially contacted by AI remained 1–2 percentage points more likely to miss future payments.
Between the lines:
- Human callers appeared better at leveraging moral and social pressures — for instance, securing repayment promises that borrowers actually keep.
- Borrowers tended to engage in shorter conversations with AI and were more likely to break promises made to an automated system.
“AI appears to have less ability to extract verbal promises to repay and create a sense of obligation to keep those promises, perhaps because AI carries less moral weight,” the researchers wrote. “AI additionally seems less able to communicate with borrowers, engage their attention, and/or handle complex situations.”
