Turn your collection risks into opportunities with digital precision and empathy

US lenders are navigating a structural reset in consumer collections. Skyrocketing delinquencies, rising fraud, shifting repayment behavior, and tightening regulations are converging to rewrite the rules. Younger borrowers ignore phone calls and default to autopay. Frauds are growing more sophisticated. Consumers are reprioritizing debt repayment in ways that leave unsecured lenders last in line. Rising annual percentage rates (APR), regulatory scrutiny, and behavioral shifts are not just reshaping collections; they’re threatening the performance and reputation of collections businesses.

HFS Research, in partnership with Firstsource, explored how traditional lenders and fintechs leverage AI, change their strategies to reduce delinquencies, and prioritize digital engagement with customers. Alongside the survey with US lenders (conducted in the first half of 2025), we interviewed some of the leading non-mortgage and fintech lenders to uncover what’s changing, what matters most to consumers, and how fast the most adaptive lenders are rethinking collections.

The findings were clear: consumer behavior, financial stress, and fraud have fundamentally altered repayment priorities and redefined engagement channels. Legacy systems and outdated outreach models can’t keep up with evolving customer preferences, increasing friction, and risk. The future of US collections must focus on redesigning collections as a personalized, digital-first journey, rooted in real-time behavioral signals and human-centered design. Lenders must leverage AI, cloud platforms, and modular design to deliver repayment experiences that are both compliant and compassionate.

US lenders that fail to modernize collections will not just lag—they’ll lose customers, absorb regulatory penalties, and cede ground to fintechs already engineered for convenience, empathy, and speed. Survival depends on moving beyond reactive, compliance-led debt recovery and building digitally precise, human-centered collections engines. That requires embedding AI-driven insights into outreach, offering flexible repayment pathways, leveraging shared fraud intelligence, and orchestrating omnichannel engagement strategies that meet borrowers on their terms.

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