Taking AI to debt collection as credit stress hits millions
· Citizen
South Africa’s growing debt burden is now creating an unexpected opening for artificial intelligence (AI), with some consumers appearing more willing to discuss overdue accounts with an AI voice agent than a human debt collector.
Bruce von Maltitz, CEO of customer engagement technology company 1Stream, said debt collection carries an emotional burden that often becomes a barrier to engagement.
Visit casino-promo.biz for more information.
Debt collection carries emotional burden
The company has developed Agentic AI to handle the dreaded calls.
“Debt is a difficult topic to address under the best of circumstances. When debt becomes overdue, or the topic then moves to debt collection, things become even more difficult – practically and emotionally,” he said.
South Africans are struggling to keep up with their financial obligations.
Researcher Eighty20’s latest Credit Stress Report found that around 40% of the country’s credit-active population is more than three months in arrears on at least one loan.
Credit bureau TransUnion recently reported that about 35% of consumers expect to miss at least one bill payment during the current cycle.
Experian shows 15.77% retail default rate
It’s sector peer, Experian, recently reported a default rate of 15.77% on retail credit products, with more than 22 million retail credit accounts currently active in South Africa.
Missing a payment is stressful enough. Explaining it to a stranger on the other end of a collections call can make it even worse.
“There are people who have serious financial problems leading to defaulting, but there are also many cases where a debit order simply didn’t go off because of a mistake, or a payment was missed and the customer fully intends to pay,” Von Maltitz said.
“In those instances, you often need a fast, consistent way to notify the person and help them resolve the issue.”
He said operational data from South African contact centres using voice automation or Agentic AI suggested that some consumers are more comfortable engaging with an AI system during these initial conversations.
AI removes stigma and judgement
He said anecdotal observations are supported by international research examining how people react when discussing debt with machines rather than humans.
“A notable early 2026 study titled AI in Debt Collection called Estimating the Psychological Impact on Consumers found that consumers experience heightened feelings of stigma and social evaluation when talking to a human, who they perceive is capable of morally judging them.
“Interacting with an AI system that lacks ego or judgment significantly lowers these psychological barriers,” Von Maltitz said.
However, Carmen Murray, a cultural forecaster, said businesses should be careful not to view AI as a replacement for people.
She said the technology works best when it expands human capability rather than removing people from the equation altogether.
AI expands capacity but human oversight remains critical
“We now have access to the capacity of hundreds,” Murray said, adding that organisations still require human oversight, judgment and decision-making when deploying these systems.
It’s a balance that becomes particularly important in debt collection, when financial hardship, disputes and vulnerable consumers often require a more nuanced approach.
“AI should never be used to manage complex negotiations, handle formal account disputes, or engage with vulnerable consumers experiencing severe financial or personal hardship,” said Von Maltitz.
“Human professionals remain irreplaceable in collections. The technology is simply there to handle the routine and simple tasks, freeing up human agents to focus on the cases that truly require a human touch.”