Another great Collection Innovation event at the Treehouse in Manchester, focus on the Debt Support sector. Lots of change and more anticipated, especially around evidencing support. Data and technology clearly has a role, both in terms of driving these requests, but also in providing answers and solutions.
Key Take Aways
- AI adoption in debt collections is accelerating, with firms moving towards increasingly adopting this technology.
- Hallucination-free AI agents, designed specifically for collections, with built-in safeguards against bias and confabulation, are available.
- Compliance is a foundational expectation. Privacy and data security is key.
- Regulatory reform is intensifying, with major movement on the Consumer Credit Act, FOS powers, and statutory enforcement regulation.
- FCA’s data-driven regulatory model is increasing firm burden, especially with Product Sales Data (PSD) and anticipated backbook reporting.
- Speech analytics remains underutilised, with many firms leveraging only ~5% of their call data analysis capabilities.
- AI must be embedded within governance, not bolted on—firms are expected to demonstrate clear policy, oversight, and risk management frameworks.
- Vulnerability management requires maturity, with only 39% of firms having formal governance over customer outcomes in vulnerable circumstances.
- Quantum computing poses long-term cryptographic risks, with national-level actors already preparing for post-quantum encryption frameworks.
- Customer trust and fraud prevention are critical in AI-led engagement, especially in identity verification and impersonation risk.
- Consumer understanding is expected to be the next regulatory focus, following fair value, QA frameworks, and vulnerability initiatives.
- Cost pressures are driving digital transformation, with firms forced to adopt AI and automation to offset inflation, wage growth, and margin compression.
Innovation
- Hallucination-proof AI agents: MEGA AI has eliminated the ability of its agents to hallucinate, offering full auditability and compliance assurance.
- Bias-free decisioning: The AI agent can make decisions (e.g., on instalment plans) without access to customer identifiers or sensitive information.
- Real-time agent assist tools: AI-enhanced document and knowledge tools are reducing agent burden and improving call quality.
- Cross-industry collaboration on AI safety: Proactive measures to allow clients to audit AI agent code for transparency and regulatory alignment.
- Integrated AI into existing platforms: Use of AI within established systems to avoid high-cost IT implementations while enhancing capability.
Key Statistics
- £50 billion+ in debt owed to the public purse.
- 400,000 increase in the Vulnerability Registration Service database in the last year, reaching over 1 million records.
- 87% of consumers now have access to a smartphone.
- 39% of firms have formal governance structures to oversee outcomes for vulnerable customers.
- 7 million people are struggling with bills or debt in the UK.
- Consumer engagement in one firm was split between 40% and 60% online, indicating a shift towards digital preference.
Key Discussion Points
- The importance of picking the right use case for AI – prioritising customer outcomes over internal efficiency gains.
- Firms must prepare for simultaneous regulatory reforms, including Consumer Duty, PSD, CCA reform, and FOS restructure.
- Customer vulnerability remains a central regulatory concern, with expanded expectations for data sharing and governance.
- Speech analytics and QA frameworks are being scrutinised for meaningful application, not just cost control.
- The pace of technological change is outstripping traditional governance cycles, requiring agile adaptation.
- Public sector collections are becoming a testing ground for transformation, with new frameworks and procurement models.
- Consumer trust is a priority amid rising fraud, impersonation, and portal cloning risks.
- AI usage policies are now expected in client onboarding packs, especially for BPO and collections partners.
- The cost of compliance and service delivery is rising, driving automation as a necessity rather than innovation.
- The regulator’s focus on fair value and consumer support is intensifying, particularly for vulnerable segments.
- AI implementation must be embedded in wider business strategy, not treated as an isolated tech project.
- Industry fatigue with compliance burdens is creating demand for regulatory simplification and investment-friendliness.
Description
This industry event brought together key players from the UK debt collection sector to explore the intersection of AI, compliance, and customer outcomes. Sponsored by MEGA AI and attended by representatives from the Credit Services Association (CSA), the session featured product demonstrations, regulatory horizon scanning, and deep discussion on future trends. Topics ranged from AI governance and hallucination prevention, to regulatory reform, consumer vulnerability, and data reporting burdens. The event offered insight into how firms are navigating the fast-changing regulatory and technological landscape, and what “good” looks like in an era of data-led supervision and digital-first customer engagement.
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