Third-party collection agencies are navigating a perfect storm: rising costs, staffing challenges, stricter compliance requirements, and borrowers who are less likely to answer the phone than ever before.

At the same time, the industry is rapidly evolving, with digital-first strategies reshaping how collections work. Borrowers expect personalized, efficient, and respectful communication—and agencies that don’t adapt risk falling behind.

Here are five transformative strategies to cut costs, boost recoveries, and delight borrowers in 2025:

Take collections digital – Because that’s where borrowers are

Before: Countless calls, ignored voicemails, and wasted agent time.
Now: Borrowers pay via text, access portals on their own time, and choose their preferred communication channel.

Gone are the days of relying exclusively on phone calls. Leading agencies now integrate digital channels like SMS, email, and web portals into their strategies. These platforms automate follow-ups, provide self-service payment options, and allow borrowers to choose when and how to engage. The result? Lower operational costs and happier borrowers who feel empowered.

Let AI handle the routine – So agents can focus on the complex

Before: Agents spend hours fielding repetitive questions like “What’s my balance?”
Now: AI-powered assistants answer FAQs 24/7, while agents focus on high-value accounts.

Artificial intelligence is no longer just a buzzword. It’s a practical tool that handles routine queries, payment negotiations, and even dispute resolutions. By letting AI take over repetitive tasks, agencies free up their best agents to focus on resolving complicated cases and maximizing recoveries.

Eliminate manual after-call work

Before: Agents spend 2+ minutes typing up call notes after every conversation.
Now: AI automatically captures and summarizes notes in real time.

Manual documentation is a time sink, consuming a significant chunk of an agent's day. With automated note-taking solutions, call interactions are summarized instantly and accurately, allowing agents to transition seamlessly to the next call. The result? Faster workflows and more time spent engaging with borrowers.

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Monitor 100% of calls without breaking the bank

Before: Random QA sampling means risks and compliance gaps go unnoticed.
Now: AI reviews every call, flags compliance risks, and offers agent feedback.

Traditional quality assurance processes only scratch the surface, reviewing a tiny fraction of calls. Modern AI-powered tools monitor every interaction for compliance risks, performance issues, and opportunities for improvement. This ensures agencies stay ahead of compliance requirements while delivering better borrower experiences—and at a fraction of the cost of manual QA.

Reach borrowers when they’re most likely to respond

Before: Agents call borrowers during work hours and hope for the best.
Now: Outreach is personalized to borrowers’ preferred times and channels.

Data-driven outreach strategies use borrower preferences and behavioral insights to determine the best time, channel, and message for each individual. Whether it’s a text reminder during lunch or an email in the evening, this tailored approach increases engagement rates while reducing wasted effort.

The path forward: combining efficiency with empathy

In 2025, successful third-party collection agencies will master the balance between cost efficiency and borrower-centric strategies. By adopting innovative technologies—like AI-powered automation and digital-first solutions—agencies can reduce operational expenses, improve compliance, and build stronger borrower relationships.

Ready to future-proof your operations? Start by identifying inefficiencies and exploring automation solutions that align with your goals. The technology is here. It’s time to lead the charge.

This is your opportunity to set your agency apart. Adapt, innovate, and grow—because the future of collections is already here.