It’s not too late to share some predictions, is it? AccountsRecovery.net asked a handful of industry professionals to look into their crystal balls and share what they see happening in 2024. We’ll circle back in a year with each of them to see how they did. This will also wrap up the end-of-year series of articles. Thanks to everyone who participated and shared their thoughts and insights. In the meantime, read on.
Dennis Barton, The Barton Law Group
Next year will see a rise in legal collections. No, that’s not just wishful thinking. Regulations will continue to hamper efforts to credit report, especially medical debt. This will force creditors and agencies to mourn the loss of their biggest bat and turn their lonely eyes to collection attorneys. In doing so, regulators will indirectly and inadvertently increase the number of judgments against consumers and garnishments of their wages. This is contrary to their motives and will result in increased revenues for creditors and collectors alike. Once again, collection attorneys make the world (or at least our industry) a better place. You’re welcome.
Jeff Freedman, MRS BPO
My crystal ball has been a little cloudy of late so hopefully I am on point this time. We expect that the disruption in our industry, that resulted from the pandemic, will finally dissipate completely and we will get back to delinquency and charge off cycles more in line with pre-pandemic expectations. We do expect however for there to be a steady increase in delinquencies throughout 2024 stemming from debt hitting all time highs in key asset classes in conjunction with the safety net of stimulus, built up savings, and moratoriums and forbearances on payments all now having dried up.
We also expect the continued march toward digitization and self-service channel offerings to heat up throughout the industry with more agencies recognizing their importance to surviving and thriving into the future. We further surmise that more agencies will be deploying AI, ML, and LLM to drive down costs, improve overall compliance, and provide better and more personalized service to customers. The push for digital, along with continued pressure on margins, will likely lead to increased industry consolidation.
Lastly, not really going out on a limb here but the results of the presidential election will have significant ramifications on our industry depending on who the occupant in the White House is (may not be felt in 2024 but the seeds will certainly have been planted in 2024).
Chris Schumacher, Optio Solutions
As 2023 has come to a close I think 2024 could bring its own challenges to the collection industry. Several factors drive this prediction. Firstly, agencies could continue to consolidate as the cost for compliance and security continues to grow; this could be cost prohibitive for many smaller entities. Secondly, the consumers’ ability to pay could be challenged due to increased credit card debt and rent, as well as loss of government stimulus payments. Thirdly, client’s placements could take another year to ramp up, while contingency fees continue to be pushed lower. I predict that agencies will overcome these challenges as they continue their focus on artificial intelligence and machine learning (specifically around automating routine tasks), data-driven decision making, and consumer preference on communication and payments. 2024 will have its challenges, yet, I believe the collection industry will continue to persevere by our professionalism with ethical and respectful conduct helping consumers find ways to pay their debts with honor and dignity. I also predict in 2024 that the San Francisco 49ers will win Super Bowl LVIII.
Sara Woggerman, ARM Compliance Business Solutions
Ethical Artificial Intelligence and Governance will be a strong theme in 2024. Artificial Intelligence (AI) and Large Language Models (LLM) made significant advancements in 2023, paving the way for exciting advancements in technology leading to better decisions regarding how and when to communicate with consumers, and what payment options or settlement offers to present to those consumers. With each positive AI innovation there is counter compliance risk to be considered. Compliance professionals across the industry should be thinking about how to implement an Ethical Artificial Intelligence and Governance Program for their organization that is fluid enough to adapt with technology advancements and regulatory compliance risks. Understanding what and how data is being used, as well as testing for disparate consumer impact, will be critical. We should also anticipate that the Consumer Financial Protection Bureau (CFPB) will be looking specifically for AI related consumer risks during their examinations and for their examination manuals to be updated accordingly. However, as we’ve seen in the past, don’t bet on an examination manual update before we see the first enforcement action. As with all new technology implementation it’s wise to adopt these tools in phases, with compliance controls, and testing throughout, to help your operational and compliance teams fully understand the positive and negative impacts to your organization before fully embracing.