When we started helping clients with collections in 2023, we did everything manually. Today, I’m proud to share a milestone that marks our coming of age as a company.
The Evolution
Our journey began with our entire team rolling up their sleeves and doing the work ourselves. In 2023, we were personally handling collection calls and messages for our early clients – founders, engineers, and operations staff alike. Everyone pitched in, learning firsthand about the challenges of the collections process.
It was during those manual efforts that we saw a clear opportunity: traditional collection methods weren’t working for either businesses or their customers. Phone calls went unanswered. Messages were ignored. And the human toll of mounting debt became increasingly apparent.
The Pain Points Became Clear
As we immersed ourselves in manual collections, several critical challenges emerged:
First, we discovered a fundamental timing mismatch – 42% of people wanted to discuss their situation outside standard business hours, precisely when collection teams were unavailable. This created a perpetual game of phone tag, with both sides constantly missing each other.
Second, we witnessed firsthand the capacity limitations of traditional collections. Human agents could actively engage with only about 10 people per day despite managing hundreds of cases, simply due to the time required for research, documentation, and meaningful conversation with each debtor.
Finally, we observed that even with aligned incentives to help debtors find sustainable solutions, human collectors faced inevitable tradeoffs with their limited time. Difficult cases often received less attention because engaging with them meant forgoing work on other accounts.
These realizations made us wonder: What if we could create collection agents that were available 24/7? What if these agents could give undivided attention to each customer, regardless of how complex their situation? What if we could remove the capacity constraints that force human collectors to make difficult choices about where to invest their time?
Enter AI with Purpose
This insight led us to develop AI collection agents that could reach people through familiar channels like WhatsApp, understand their situations, and offer realistic solutions.
We’ve just completed our first full AI-powered collection cycle with a Southeast Asian Buy Now Pay Later provider, working with a portfolio of long-overdue accounts.
The Results Surprised Even Us
Not only did our AI approach work – it dramatically outperformed industry standards:
- 13.72% collection rate (beating traditional DCAs by 7.72%)
- 41.14% contactability ratio (compared to industry average of 4-5% for phone calls) – meaning we successfully reached 8x more customers for first-time contact
- 54.74% meaningful engagement rate among contacted customers – these are actual conversations where payment solutions were discussed
- 3.75x lower costs than conventional collection methods
The most compelling validation? When I approached the BNPL company owner about expanding our work, he issued a straightforward challenge: “The debt collection agencies can give me 6-7% collection. If you can do more, I’ll give you more. It’s all in the numbers.”
Two months later, after seeing our 13.72% collection rate, he’s doubled their portfolio with us. Challenge accepted and conquered.
Here’s what Gene, CEO of Riipay, had to say:
“We’ve worked with multiple collection agencies before, but Ara Pay’s AI approach is simply in a different league. Their 13.72% collection rate on our oldest accounts was more than double what traditional DCAs delivered. Beyond the numbers, I was impressed by how they handled our customers with respect – creating affordable payment plans that work for people in difficult financial situations. The results speak for themselves: we’re doubling the accounts we entrust to them.”
The Human Impact
What makes this truly meaningful isn’t just the numbers. It’s what happened with the people behind those accounts.
Our AI agents identified customers in severe financial difficulty and took action – negotiating reductions in late payment penalties and creating affordable weekly repayment plans as low as 25 MYR (about $5).
Here’s the key: these micro-payment plans would be economically impossible with traditional collections. Because our AI agents can automatically follow up every week and our system integrates directly with payment gateways for automatic reconciliation, we can offer solutions that would be prohibitively expensive for human collection teams or DCAs to manage.
This technology-enabled flexibility gave people a fighting chance to break free from debt cycles rather than watching helplessly as fees continued to mount.
The Bigger Picture
This milestone represents something important in the AI landscape – a concrete example of AI adding genuine value to both businesses and individuals simultaneously. While many debate AI’s potential impact, we’re demonstrating its tangible benefits today:
- Businesses recover more funds at lower costs
- Individuals get personalized solutions based on their financial reality
- Both sides benefit from higher engagement and resolution rates
In Southeast Asia alone, tens of millions of people remain trapped in debt cycles they struggle to escape. Traditional collection approaches, despite good intentions, often lack the capacity to provide truly personalized solutions at scale.
By removing the time constraints and capacity limitations of traditional collections, we’re building a system that treats each person with consistent attention while delivering superior business results. Our AI doesn’t make the tradeoffs human agents are forced to make – it can give the same quality of service to the 500th customer as it gives to the first.
As we continue scaling our AI collections across more clients and markets, I’m more convinced than ever that empathetic technology can transform industries long plagued by structural limitations.
I’d love to hear your thoughts on the role of AI in creating more humane financial systems.
#AIForGood #FinTech #Collections #CustomerExperience #StartupJourney
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