Adam Parks (00:08)
Hello everybody, Adam Parks here with another episode of Receivables Podcast. Today I am here with the compliance queen from the debt collection industry, someone you've all seen both on podcast webinars and speaking at most of the major events around the space, Ms. Sara Woggerman. How you doing today, Sara?
Sara Woggerman (00:25)
I'm doing great. How are you, Adam?
Adam Parks (00:27)
Always having a great day, really excited for today's conversation because leading an organization through the AI revolution is something that's not easy. And I feel like that's a path that you're helping a lot of organizations to forge right now in learning the different ways in which we can use artificial intelligence to actually benefit our businesses. And how are you going to lead the people, like the live people around you?
Sara Woggerman (00:51)
Yeah.
Adam Parks (00:51)
Through the implementation of new technology, which has proven to be challenging throughout our careers. And I wanna learn more about how you're addressing that today. for anybody, Sara, who has not been as lucky as me to become your friend through the years, can you tell everyone a little about yourself and how you got to the seat that you're in today?
Sara Woggerman (01:10)
Yeah. Well, it's a pleasure to be here, Adam. Thanks for letting me talk about this important topic. But I've worked for three major debt buyers in the industry. And then I went and I worked as a consultant. So in all of my roles, I had the unique experience of being able to manage dozens and then hundreds of collection agencies and law firms. And now I put that to really good use through my consulting business at Arm Compliance Business Solutions, where we operationalize compliance. So instead of just talking about the laws and regulations, we really strive to get our hands in there, help you make the most of and personalize that approach for each individual company that we work with. We have a good team of four amazing consultants. So if you are in need of compliance help, feel free to give me a call. So.
Adam Parks (01:59)
I can tell you from my experience working with your team, everybody is fantastic and your ability to understand how to actually operationalize a compliance need. It's not just about writing a document that sits on a shelf. It's about a living and breathing program within your organization. And compliance, think is one of those key aspects as we look at the AI revolution and what that means for our space and for our industry.
Adam Parks (02:26)
Talk to me a little about what your experience has been trying to help organizations prepare to leverage artificial intelligence within their businesses.
Sara Woggerman (02:36)
Yeah, so artificial intelligence has been such a phenomenon and such a pivotal technology force, right? And there are companies that are beginning to really leverage this technology in different ways. There are some that are still sort of trying to understand it. But regardless of where you are in your journey, I think everyone is coming to the realization that they need to do something with AI, what that scope looks like and what their risk tolerance looks like might vary. But I think really, as we think about this from a leadership standpoint, one of the things that I think is really critical is that we think about our messaging to our employees and our teams about how we're going to leverage AI.
You hear the words AI and frontline staff are going to immediately think they're trying to replace me with a bot. And that's not an unfair assumption because that is what we hear about, So if you are looking at implementing AI, whether it's in the back office support roles, whether it is as a frontline voice AI tool, right? That's having conversations with consumers, Either way, you need to address that fear head on. think really talking with your team about those fears, about how you intend on leveraging AI, what your roadmap really looks like, fold them into the conversation, help them understand the why behind it and how they can be a part of the solution to the problem you're trying to solve with artificial intelligence.
Adam Parks (04:15)
So do you think that that fear structure is based on the use cases that you've chosen? Because if you're using artificial intelligence to drive workflows, for example, or to analyze large mountains of data, it's a little different than if you're trying to roll out a voice AI bot in terms of how they feel threatened through it. So how do you engage in that conversation and help those around you understand the true intent behind the use cases you're trying?
I think that's where the transparency really comes in, right? So when I talk to, you know, I'm part of a lot of working groups and I talk about this with my clients. Again, bring them to the table and talk about what I think would be a great way to do this would be to create a committee, first of all, of all stakeholders throughout, you know, cross-departmental stakeholders, and then start with those conversations if you haven't already where should we think about AI, So if it's driving workflows to your example, Adam, that still might cause some anxiety for certain people in the organization, maybe one or two people versus your whole team of collectors, But if the decisioning engine is going to ultimately impact collectors, that might also impact them. So.
Again, these things do trickle down, And so talking about it, asking for your staff's input on where they think you could actually optimize and use AI. What is allowable and permissible? Get their ideas, get them to be part of it. I think that will ultimately influence their personal growth because here's what I ultimately believe.
Sara Woggerman (06:00)
Yes, we may need less people to do more functions, less manual work. I think that's a win for everybody. But I do believe in at least the US, humans will have to work alongside AI. Between the state laws and all the governance that we have and the federal regulations and the unforeseen laws that we're going to have to comply with, we are going to need to be auditing its functions and making sure it works throughout each automation, each decision, and we're going to have to be analyzing that in a different, more complex way than maybe we have previously. Saying all of that, again, we can hopefully maybe develop people who might be frontline collectors and make them more of an active participant in this process. So. maybe they help train a bot, a voice AI bot. Maybe they become the auditor of the bot, And then during escalation calls, they're still a live collector when needed. I think there is a transformative way we can develop employees into, you know, even more of a stakeholder into the company by leveraging AI. And I think if you really, you know, frame it that way, I think they're gonna come on board with you. I believe that they will. Because I think this is exciting, It's being talked about constantly. I mean, you can't not, you can't avoid it. it's just AI this, AI that, and everyone's an expert and everyone, you know, so, and this technology is so widely available that it would be.
Adam Parks (07:32)
Can't turn on a TV or social media. Yeah,
Sara Woggerman (07:43)
naive to think that your employees aren't playing around with it when they're at home, Even if you have it locked down in your office. So they might have ideas. Yeah.
Adam Parks (07:50)
So you bring up a really good point there. I would like to think that a lot of them are starting to play with it and some still have the fear and it's about getting over that first round of fear and actually starting to play with the tool side. But what are some of the questions you can start to ask your team in order to engage them in these discussions and draw them into the process?
Sara Woggerman (08:12)
Ask them where they think AI could reduce particular pain points or points of friction in their daily lives, Maybe for, you know, collectors, for example, love to tell you everything that's wrong with your system of record. Every single day, there's a problem with your system of record, It could always work better. And in addition to that, they also will also identify things like workflows. So I made workflow like breakdowns. So I made this comment on a webinar recently and I called it my little Sara magic trick. But when I meet with collectors, when I do compliance risk assessments and I meet one-on-one with collectors, I go through a series of questions. And my last question is always structured the same.
I have just coined you CEO Adam Parks of this company and I am investing in you because I believe in you. So money is no object. You have an unlimited budget. What's the very first thing as CEO that you change in this company? And it is amazing the responses I get every so often I get something silly. Like I hate the carpet in this place. It makes me want to vomit. Like, you know, every so often I get one of those, but
Adam Parks (09:28)
Yeah.
Sara Woggerman (09:29)
More often, I mean, I would say 99 % of the time, I get a very thoughtful response about how maybe there might be unfairness in workflows or strategy or what they are lacking in their training or what they are like, these things that are super meaningful. And so I bring that up because your frontline staff, you might think are just people who clock in and clock out at end of the day. They think about these things. And when you bring them in and you ask them, what are the pain points that you feel in your job every day? And where do you think AI might help with that? What are some things, if we were to make an investment, where would you invest your money first, you know, to make it more effective? And you might, I promise you, you'll be amazed at like what you'll actually hear back, especially if they feel safe being really honest. And so, you know, one of the places where AI could, I think about where AI can reduce friction for maybe a frontline collector is what if you had all of the documents at your fingertips and you were able to literally answer disputes in real time and say,
Sara Woggerman (10:48)
Let me email this to you right now. I've got the original documentation and let's look at it together. Let's look at it together. Why? While you have them on the phone, So I always say there's money in disputes, Don't respond to disputes and then never work them again. But what if we could do it on the call once we have a captive audience?
Adam Parks (10:54)
Well, you have an engagement.
Sara Woggerman (11:08)
We all know that once we have a captive audience, we don't want to lose that audience, And so it's hard to get it back. So those are places where I think if AI was feeding you the information, going and grabbing it, and then saying, here are the important things to highlight and talk about, I think that could reduce a point of friction and reduce some of the backend support role functions that are already overly burdened by dispute management specifically, So that's just like an example of something that I think about, like those like little things can be very impactful if we can execute that correctly, And you might get similar type of feedback from a collector.
Adam Parks (11:50)
And as you start getting feedback from the collectors about kind of where to start the journey, where to focus, once you select your path and you start walking down that path, how do you keep them engaged in that process and how do you get them, how do you maintain that excitement over the course of a marathon versus the course of a conversation?
Sara Woggerman (12:03)
Yeah. Well, one simple way we know that collectors, frontline collectors, or even support staff, They love being rewarded. They love incentives, Celebrate your wins. Maybe that is you bring in lunch and you do another brainstorming session on what could you do next, Or what have you heard about happening at maybe through other working groups? I know a lot of operators, a lot of collection folks are in different working groups. They're going to these meetings, the same meetings that I participate in and you participate in. Maybe we have good brainstorming sessions with our frontline staff on a monthly basis to talk about what worked, what didn't work. Lean into your failures, Let's not avoid those because we learn from those failures, all And keep that dialogue happening because it's one thing to as a leader say, we want to be transparent and you're part of the process. But if you never come back and tell them what you actually did with that information, where you put your investment, why you will invest more or less as a result, they don't really feel like that was very authentic or genuine, right? So I think bringing that, bringing it full circle, celebrating the wins, incentivizing, folks and however your team gets incentivized, right? And maybe that is people get promoted based on their thoughtful implementation and what they bring to the table, right? If they take an active role. Yes.
Adam Parks (13:40)
Contribution based opportunities to rise, for example, I think is a very realistic approach to that. When we talk about celebrating the wins, I love, because that's something I think as business owners, we tend not to do a whole lot. And it's more important for those around us than I think for us, because we're always so focused on the next thing and not so much on the victory that we had yesterday. We're focused on the next task.
Sara Woggerman (13:46)
Yes. You
Adam Parks (14:05)
or what that victory opened up in terms of new opportunity. But it is important to take a step back and celebrate where you've been successful. I also really like the idea of the iterations of failure. And if something isn't gonna work or it's gonna be delayed, or I would keep the open dialogue in that whole process there's gonna be some API key that didn't work or we didn't integrate this fast enough so we didn't hit the timeline that we were shooting for. And it always, it's a very common problem from a technology development standpoint, keeping that out in front of everybody and exciting and trying not to repeat the same things over and over again, because that's the next pitfall that I see is like, didn't work this week, we're gonna try again next week. didn't work this week, we're gonna try again next week. It has to be a little bit more involved than just.
Sara Woggerman (14:47)
Yes. Yes.
Adam Parks (14:53)
I'm gonna call it static updates and trying to find those opportunities to engage in discussion. Because from those discussions comes the brainstorming, comes the value and the new contributions from unexpected places around your organization.
Sara Woggerman (14:59)
Yes Yes. So I do this, you know, granted I have a very different team, but when I am using something that is an AI tool, you know, I make sure I'm bringing it back and say, okay, I was doing something like X, but when I transitioned and changed my prompt and was more thoughtful about my prompt, This is something I know you talk about a lot, Adam, but you know, I had to change the way I thought about it. And so,
Sara Woggerman (15:33)
I make sure that we're all collectively sharing what's working and what's not working so that we can all learn from each other, There are so many AI tools out there. There's free ones, there's ones that you invest in, there's on-premise, there's cloud-based, there's all these things, So, you know, where you start and where you end up, they're probably going to look very, very different, but you have to start somewhere. And I think sharing that journey with your folks and then having them again, help the process along, make them part of, you'll give them some authority in how this sort of works. And then also, you know what collectors and team members really like to hear? They like to hear what was the return on that investment. Okay, so, and what at the end of the day, how does that help them? And. You know, I know as leaders, we have to be careful with sort of the framing of this because some people might say, well, then I should get a 20, you know, we had a 20 % reduction. I should get a 20 % raise, But you can say, this is how we invest in, you know, your education. And this is how we can invest in your salaries and grow you as an employee. this is, you know, show how that helps the long-term stability of your company. At the end of the day, People want to work in a healthy environment that is stable. innovation right now is going to keep you stable as a company. I truly, truly believe that. So.
We hear, you you go on LinkedIn, there is a lot of job insecurity right now. So making sure that you are reassuring them of their security and their role is going to be monumental for the next several years. I really believe.
Adam Parks (17:23)
I want to talk a little bit more about framing the discussion around enabling folks, but one of the things that I've started to see here is people looking at artificial intelligence as just a financial ROI. And I don't think that it's just a financial ROI. I don't think it's only looking at how many additional dollars was I able to bring in or how many additional dollars did I save because there's the time factor.
And with that time factor also comes in job satisfaction. And how can we start looking at that ROI, which is generally a very qualitative calculation, and how do we start to apply some of that qualitative item to it as well? Because now that employee is able to focus on different things. they're able to remove some of the repetitive administrative tasks that they were doing and focus on other things that allow them to exercise their brains and move them into new and interesting positions around the organization, which I think is kind of a natural growth. But how do you talk to a business owner about that qualitative ROI?
Sara Woggerman (18:31)
I think that's a great question because I think that is the first thing that they are thinking about. Naturally is if I make this investment, what is it going to save me in on the back end? But I think there is there is a personal individualized development, which you just alluded to. I also think there is this area where you're going to be able to get so much information back and be able to dissect that information in a way that we tried and searched for for a very long time and haven't necessarily had the perfect like trend analysis and understanding the root cause of all these little dynamic elements of our data. Because, know, and that's a whole nother that's a whole nother conversation that you talk a lot about, you know, whether you have structured unstructured data, all these things.
AI is going to be able to take those data points and be able to put it into a form that is understandable and something you can make smart decisions off of. So we're working smarter, not harder, right? We love to say that, but actually doing that, I mean, it's a whole other story. Exactly. So.
Adam Parks (19:42)
It's another story.
Sara Woggerman (19:46)
And I know that I run into those same challenges. I'm like, I am not working smarter. I'm just working harder. and you have to take a step back. I think that AI is going to enable us to do things smarter, more effectively. But we're going to gain so much information so that we're one, we're hiring the right people for the right jobs that we're investing in the right types of training. are our retraining isn't just a checkbox item that we're actually being smart and say, where do people forget the things. Like we can have, we can get real time feedback on where our training is lacking and then be able to, you know, really fix those issues in a timely manner instead of just waiting to, it's not annual training time yet, you know? So I think like all of these things together make you a much better company.
If you're looking to sell your company, I think it makes you more desirable to a potential buyer. If you are looking to expand your business, you're going to be able to do more with your team. Because you're getting the information and you're able to execute and act on that information. Whereas in the compliance world, I always talk about it's almost worse to have all the information and do nothing about
Sara Woggerman (21:04)
from an examination standpoint.
Adam Parks (21:05)
It's about finding the behavioral signals within a mountain of data because data is only so valuable unless you can find actionable intelligence within it. And what kind of actionable intelligence does this industry look for is behavioral, whether it's consumer behavioral or it's collector behavioral. We're looking at predicting the behaviors of individuals based on a historic run.
Sara Woggerman (21:12)
Yes. correct.
Adam Parks (21:30)
And with so many years worth of data available to this industry, being able to overlay those machine learning models to help us identify those intelligence actions from all of the signals that we can start to find within the patterns and trends is really where we go as an industry. But as we think about what that means to the collector, How are we reinforcing with all of that happening that we're not here to replace you, we're here to enhance you?
Sara Woggerman (22:04)
I think you keep, well one, it will help if people don't start disappearing from the floor. if people don't. That would help. I'm just gonna state the obvious.
Adam Parks (22:14)
like alien abductions like just people being extracted from the floor
Sara Woggerman (22:18)
I just thought I'd throw that out there. It will help if, yeah, yeah, okay. The other thing is, I would say seeing people move up and become more active in those discussions will help. Also showing that there's always going to be a need for, know, collection is a very human, it's a human experience right now. And that might be,
Adam Parks (22:21)
Fair.
Sara Woggerman (22:48)
a negative thing and that could be a positive thing, So, you know, there are still going to be people who do not want to engage with an AI bot. They just won't. There will be a whole demographic of people, So I think that, you know, making them more specialists, representatives, maybe we move, I mean, I think that industry has been trying to move away from the word collector actually for several years. But I think moving away from collector and they are, you know, special handling, Maybe you have people that handle very specific things, And that's all they handle. You know, I do think rethinking your org structure and how you position people will be part of this. So maybe the bot is your frontline collector. And then as soon as things get to a certain, point and it feels like it needs more of that human one-to-one touch, then those, you you fold those folks in. Again, asking them, you know, if you had a, if you could say, I only want, I like handling X types of calls, right? There are certain people who are just so amazing at deescalating. Just there's, there are, and that is a very specific skill set.
Adam Parks (23:58)
You're skill set.
Sara Woggerman (24:03)
make those people your deescalating people, The people who are really frustrated. They have a calming presence. They have a calming voice. There's just something about them. They know how to listen. They know how to show empathy. You know, they know how to do all of those things. So there's those people, you know, maybe there's a dispute handling group. Maybe there's, you you have your deceased folks. You've got, know, like, I think, I think you can think about this in very segmented ways.
Sara Woggerman (24:28)
and restructure accordingly. And again, I think making them part of that conversation is going to be key at every phase of this. Don't sit in a leadership meeting or in a board meeting and make these decisions and just say, this is the way it is. I'm begging you. I'm begging you not to do that as leaders, because I think that that's when you're going to feel the revolt and people are going to try to make this fail.
Adam Parks (24:45)
absent of everybody's input.
Sara Woggerman (24:57)
as much as possible and that is going to work against you in the
Adam Parks (25:02)
Specialization seems like a really great opportunity for the industry, especially for those more sensitive items, whether it be disputes, deceased, there's so many bankruptcy, there's so many different specialized pieces of the debt collection industry and being able to develop that skill set into a smaller group, know, two, three collectors so that you've got redundancy, never put all your eggs in one basket, but you wanna make sure that you've got some redundancy. feels like a really great opportunity.
Sara Woggerman (25:26)
Correct.
Adam Parks (25:30)
for us to learn as an industry, be able to deploy this technology to clear those low hanging fruit, especially as the consumer starts or continues on their path of change, consumers are more comfortable with subscriptions than they've ever been. They're more comfortable talking to a bot than they've ever been. I think we're gonna start seeing some more AI challenges in our industry as the consumers get more into using bots to call.
Sara Woggerman (25:44)
Right. Yes.
Adam Parks (25:53)
into the agencies and I think there's a whole other conversation for us to have around what that is going to look like. But as we're growing our organizations and we're looking at AI in general, how do you get a long term vision or build your long term roadmap when everything changes every.
Sara Woggerman (26:11)
You know, I'm gonna be honest. That's a challenge, right? That is a huge challenge and and I can appreciate it so I do think that When you bring let's say you're just starting off and let's just pretend you're starting at the beginning of your AI journey today And you bring people together I think I would pick a couple of things from whatever feedback you get from everyone's pain points.
Adam Parks (26:16)
It is.
Sara Woggerman (26:35)
let's say you meet with all the departments, where do you think AI is going to, could reduce friction for your particular job? And then pick two areas and say, here's where we're going to start and based on your risk comfort level, or where you think you might be able to see the biggest needle change. I don't know that Everyone's going to go for the biggest needle change because that probably means the biggest risk as well. So, you know, I think those are decisions your executive leadership and board should should really think about, So pick two or three areas and say, all right, we're going to hone in on these two and three areas. Here's the stakeholders that need to be part of this process. And then in your AI committees meetings, which hopefully you formed, then you're going to you're going to work through those challenges, those successes, and then you're going to be reporting back out secularly to your team and say, here's what we've decided to invest in. This is our first stage. Phase two, these are what we've got slated. That could change. This is a technology that is moving very fast, but here's, this is how we're gonna dip our toe into this.
we're going to try to optimize these specific areas, which should impact you in a positive way because of X, Y, and Z. think that is how, again, I think the transparency and the communication is going to be ultimately key when it comes to really making this successful and a thread throughout your entire organization, not just a few people who are sitting in a room making these decisions you and a lab.
Adam Parks (28:15)
I think that is a great first step in a journey of 1000 miles. Clearly the AI committees is an important point picking and there's so many different options available right now and I think we're having some decision paralysis there's a reason that there's a limited number of options on the McDonald's dollar menu because we hit.
Sara Woggerman (28:20)
Yes.
Yes. Yes.
Adam Parks (28:34)
decision paralysis and I think it's important that we select something and start working down that path and as we talked about even if it's a failure and it's not something that we decide that we're going to deploy into production, that's okay. Take it as a learning process. Look at the procedures that you use to go through the process to roll out a new piece of technology. What kind of testing you did, who is involved and continue to engage those folks because the start stop of it I think is a challenge for the
Sara Woggerman (28:50)
Yes.
Adam Parks (29:04)
for the representatives or for the line level staff, that front line staff is always gonna be challenged by the start and stop. So the more that you can keep the conversations going and keep things rolling even through the holidays as things get busy and end of year and all of that, I think it's a mission critical time for our organizations as we start planning what are we going to be doing in 2026 and beyond. Not that we can see what the technology is going to look like, but I think our use cases will remain somewhat the same over the next two years.
Sara Woggerman (29:36)
Yeah, I agree. I agree with you on that front. And I think that in 2026, we're going to see the companies who have made the investment, we're going to start to see the successes coming out of it. It's not really clear right now what all the really big wins are, because everyone's still adapting, or implementing or tweaking. Next year, I think we're going to see the companies who maybe started that a little earlier, we're gonna be able to learn what their successes and their failures were as well. We may even start to see some case law start to come out about some of these things that are really unknown at this point in time. We make assumptions of what might get challenged at some point. So that will also, I think, absolutely impact where we implement next, So.
Adam Parks (30:24)
It's a really interesting conversation, Sara. I can't thank you enough for coming on and sharing your insights today. Clearly you and I need to continue having these great conversations about artificial intelligence and its intersection of the debt collection industry with your very specific compliance focus, which I always truly appreciate.
Sara Woggerman (30:43)
Thank you, Adam.
Adam Parks (30:45)
For those of you that are watching, you have additional questions for Sara and myself, you can leave those in the comments and we'll be responding to those. And don't forget to like, comment and reshare this episode so that more people in this industry can learn about how to deploy artificial intelligence for their business. But until next time, Sara, thank you so much. I really do appreciate all your insights today.
Sara Woggerman (31:04)
Thank you for having me.
Adam Parks (31:06)
And thank you everybody for watching. We'll see you all again soon.
