The DebTech era is coming – debts are being enforced by artificial intelligence

The DebTech era is coming – debts are being enforced by artificial intelligence

Prague, September 22, 2020 – M.B.A. Finance was a traditional partner in the fifth year of the conference Czechia in Debt, organized last week by the professional magazine Právní rádce and the media house Economia. Representatives of creditors, executors, lawyers and interested experts from the state administration spoke in the panel debate. The interests of the debtors were represented by the leading representatives of the non-profit sector. The panelists addressed the issue of debt from various angles, with the central motive this year being the amendment to the Execution Rules, which is the subject of sharp disputes.

Adam Vrbecký from M.B.A. LEGAL, showed those present that modern computer technology can be an immediately effective solution in the fight against debt before the legal framework for direct debits can be readjusted.

Executions, of which over 4.5 million are conducted, bother 780 thousand Czechs. They are the most socially pressing issue, and politicians often abuse them as a populist topic. As the contributions of the panelists have shown, there is no consensus in professional circles as to what rules should apply to executions.

Executions are at the end of the collection process, at the beginning of which there is a large set of causes. Some of the problems are in the debtors, some are with the creditors, the executors and the lawyers have their share in the unsatisfactory condition, and the state is also largely to blame. As an arbitrator, he should regulate individual participants and deal with indebtedness comprehensively as a continuous whole. Unfortunately, even after years of discussions, the legislators are unable to agree on one compromise form of the amendment to the Execution Rules.

As a partial solution, it is proposed to prevent executions by resolving the debt in the soft collection. As stated by Adam Vrbecký, managing partner of M.B.A. LEGAL, executions often occur completely unnecessarily. More than a third of debtors are untraceable, they do not know, how to solve their problems, and therefore are afraid to communicate. Problems with executions can be therefore prevented by finding the debtor and initiating a dialogue before the creditor sues him. According to Vrbecký, DebTech – an industry that combines advanced computing technologies and the debt collection segment – effectively serves this purpose. M.B.A. Finance is a leader in innovative work with receivables and has developed its own automated ICT system DebThor with elements of machine learning and artificial intelligence. Some operations, previously done by several specialists a week with fifth results, are handled by the program in a fraction of a second.

In practice, this means that DebThor is able to find the debtor, find out his financial and social situation. Evaluate its creditworthiness and credibility, profile receivables accordingly and set their solutions. “If we manage to find the debtor and make contact, thanks to DebThor we also know who you have in front of us, we can communicate properly and offer him an adequate solution to get rid of debt,” described the benefits of powerful software Adam Vrbecký.

“A quarter of a century ago, when we started collecting receivables, we received cases in paper form. Their administration was very administratively demanding, searching for debtors was only possible physically according to the place of residence. For the entire receivables packages, we followed a uniform methodology with the same rules. The age, character and person of the debtor were not addressed. It was just being enforced. Complicatedly, expensively, with relatively low efficiency, “Vrbecký recalled at the beginnings of the company’s operation.

To increase work efficiency and collection success, they started in M.B.A. Finances make more use of computer technology. From manually filled out spreadsheets in Excel, through simple databases with partial automation of some steps in collection processes, such as mailing, they have moved into a new era of DebTech.

Of course, the use of modern technologies will not solve the whole issue of receivables. However, they can prevent the very occurrence of debt by alerting creditors to high-risk consumers. They can speed up processes and increase the success of communication with debtors. And through in-depth analysis, uncover and describe the hidden relationships and contexts of how, where and why receivables arise. These findings could help politicians find agreement on the final wording of the amendment to the Enforcement Act.

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