United States
Household debt has reached a record $18.6 trillion as of Q3 2025, while pandemic-era savings were fully depleted by early 2024, leaving households with less financial buffer amid persistent high costs.
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InDebted Reports
The 2026 collections playbook
A data-driven guide for collections leaders
A data-driven guide, plus
insights from industry experts,
to help collections leaders
shape their 2026 roadmap.
Introduction
2026 will be a defining year for collections leaders. Customer expectations are shifting, regulation is tightening, and technology is moving faster than most teams can adapt. The collections strategies that succeed next year will be the ones that evolve with these changes, not react to them.
This playbook brings together more than a year of InDebted’s global performance data and behavioural insights to define what effective collections will look like in 2026. Alongside the numbers, leading voices from across the industry share their perspectives on how these shifts are reshaping credit and collections. Together, they set a clear direction for the year ahead.
The data and expert perspectives shared here are designed to help you make those decisions with confidence and move forward with clarity. From new benchmarks in repayment speed to smarter ways of designing collections communication, the findings offer practical guidance for what comes next. 2026 isn’t about chasing trends. It’s about using evidence to lead, with the customer at the centre.
What these insights are built on
This playbook is built on InDebted’s proprietary data, drawn from over 2 million customers’ repayment journeys across Australia, the United States, the United Kingdom, Canada and New Zealand. Each data point reflects how real customers chose to engage, repay and resolve their debts from 2024-2025.
All data was aggregated and anonymised to protect customer privacy while giving a clear view of shifting repayment behaviour at scale.
Our data science and insights teams identified consistent trends across markets and product types. By normalising results over time and segmenting by industry, product type and geography, we were able to highlight the changes that matter most for your 2026 strategy.
What we measured
We analysed the key behavioural signals that reveal how customers are choosing to repay. These included:
Conversion performance
Repayment rates from 30 to 180 days
Repayment speed
Average days to first conversion
Communication trends
Message volume and engagement across different channels
Payment behaviour
Instalment sizes, adoption rate of payment plans and preferred payment types
Adding human insight
Data alone can’t tell the full story. To interpret what these trends mean in practice, we partnered with industry experts — from creditors and consultants to InDebted’s own leaders.
Their perspectives sit alongside the data to help collections leaders understand how to apply these findings in their own strategies for 2026.
Key takeaway 1
AI is redefining collections service levels — scaling speed, accuracy, and compliance at once
Between February 2024 and August 2025, InDebted’s AI assistants processed over 115,000 messages and 97,000 conversations in order to respond directly to customers and support human agents. Activity grew steadily month after month, and by mid-2025 the system was handling 30× more volume than at the start of the previous year.
Total messages processed
0
0%
classification accuracy
The system now achieves 97% classification accuracy and an 80% resolution rate, meaning most messages are both understood and handled successfully on first pass, thus delivering high-quality outcomes that rival human performance. AI-written messages convert 33% higher than human-authored ones, while half of InDebted’s deployed code is now AI-generated — accelerating development and continuous improvement.
AI now handles most routine customer conversations, reducing the volume of manual work for agents and freeing them up for cases that need a human touch. Customers benefit from quicker responses and consistent accuracy, while teams gain time to focus on complex or vulnerable situations.
The AI has also redefined SLA performance — delivering instant, compliant responses across every channel. Human agents take, on average, 1 day and 1 hour to respond to an email, while the AI replies in about 4 minutes. For SMS, human responses can take 14 hours, versus just 6 minutes from AI. That’s over 100× faster, with zero SLA breaches throughout the reporting period.
Josh Foreman
CEO & Founder, InDebted
“AI has moved from toolkit to operating model. It’s not an experiment anymore, it’s the foundation of how modern organisations operate. The leaders who still treat it as optional are missing the point. Like the internet or a spreadsheet, it should be built into your daily workflow. Success isn’t about the sophistication of your tools, but about the impact they have on productivity, performance and customer outcomes.”
Dave Hanrahan
CEO, Kredit
“Speed and empathy no longer need to be seen as trade-offs in consumer interactions. AI has the capacity to evaluate emotional cues in conversation with greater consistency than humans, and it brings something people cannot: infinite patience. It can slow down when a customer needs space, and can keep up with someone looking for a quick resolution experience. The best voice models can now adapt to the way someone speaks, mirroring their pace and tone. For customers that want to engage directly and have the ability to pay, debt should become less emotionally taxing, especially if they’re facing hardship.”
How leaders should act in 2026
The data shows that automation is no longer a test environment — it’s production-ready. AI assistants now handle high-intent, high-volume customer conversations at scale, ensuring consistency, speed and compliance. The opportunity for 2026 is to integrate AI deeper into the collections workflow, using it to triage, resolve, and route in real time — so agents spend less time managing messages and more time managing outcomes.
Key takeaway 2
AI can help collections teams proactively detect financial hardship in order to better support customers
Economic pressures have intensified across major markets, which has led to rising financial vulnerability and hardship.
$0.0trillion
United Kingdom
Financial vulnerability continues to deepen, as nearly half of adults (44%) are now living in financially vulnerable circumstances — a 16% increase since 2022. Meanwhile, up to 1.9 million people, or 4% of the population, have turned to unlicensed money lenders or loan sharks in the past year. And the number of moderate-income households struggling with debt has risen sharply, up 59% to 3.5 million.
0
%
Australia
Despite real incomes stabilising, community organisations report unprecedented demand for hardship assistance, including among dual-income families facing rising living costs.
Hardship
assistance
New Zealand
Financial hardship cases have been growing steadily since late 2022, and is up 19% since last year.
0
%
Canada
Consumer insolvencies climbed 11% in 2024 to their highest level in 15 years, surpassing levels not seen since the 2009 Great Recession.
0
%
To support this environment, InDebted’s proactive AI systems are helping teams to notice when people might need support sooner. These systems have been trained to recognise 225+ high-risk keywords to detect potential hardship and vulnerability early, enabling faster intervention and more empathetic responses.
Since launch in January 2024, these systems have flagged these keywords in over 12,000 conversations, identifying around 4,500 cases that were then escalated to a human agent for tailored support. By listening for distress signals across millions of interactions, the technology helps ensure that customers showing signs of difficulty are recognised early and supported quickly.
Samuel Fasolo
Senior Investment Analyst, Pioneer Credit
“Proactive hardship support isn’t just about spotting missed payments. It’s about recognising changes in how customers engage, such as shorter calls, slower responses or reduced activity. When you combine those cues with portfolio trends or changes in the broader economy, you start to see hardship forming earlier.
The challenge is explaining the “why” behind those alerts. Regulators expect clear, human-readable reasoning. Any early distress tool needs to be transparent, consistent and fair. Otherwise, proactive outreach can become a compliance risk rather than a customer benefit.”
Michael Chatfield
Managing Director (Australia), InDebted
“There’s a huge opportunity in using AI to recognise the early patterns that often precede financial distress. Small shifts in payment habits or engagement can signal mounting pressure long before a customer reaches a crisis point. At scale, no human team can detect those signals consistently, but AI can. There will always be edge cases that need human judgement, but the ability to surface risk earlier is a step change for hardship support.”
How leaders should act in 2026
Regulators in the UK, Australia, and New Zealand now expect organisations to proactively identify and assist customers experiencing hardship, not just respond reactively. The data shows that this is both possible and effective. AI can listen for early warning signs at scale and route those conversations to trained people who can provide support. The future isn’t AI versus agent. It’s AI as the front line and humans as the escalation path.
For leaders, the next step is to integrate automation directly into the customer journey, not as an add-on but as a core part of how every customer is engaged, understood and supported. In 2026, the goal should be to build systems that combine technology’s reach with the compassion and judgment of people. Collections leaders can create a model that detects hardship early, responds with empathy, and keeps customers in control.
Key takeaway 3
Smart messaging optimisation is key to sustaining conversion
Our analysis across multiple portfolios shows that increasing message frequency continues to drive stronger repayment performance — but only to a point. Beyond a certain threshold, performance begins to decline as customers become less responsive or fatigued by overexposure.
This threshold isn’t fixed. It shifts depending on debt type, debt age and customer profile. We ran controlled experiments where we adjusted message frequency relative to our monthly baseline, and found that results varied significantly across delinquency stages. Higher message volumes improved conversion rates for customers early in delinquency, while lower frequencies were more effective for those further along the debt lifecycle.
Impact of communication volume adjustments on repayment performance
Customer segment
Change in comms volume vs baseline
Average change in conversion
Interpretation
Early-stage delinquency
(0-12 months)
+0%
increase
+0%
higher conversion
Higher-frequency engagement improves performance until the segment-specific tipping point
Late-stage delinquency
(13+ months, unresponsive)
–0%
decrease
+0%
higher conversion
Lighter cadence outperforms high-volume outreach for late-stage accounts
Customer segment
Early-stage delinquency
(0-12 months)
Late-stage delinquency
(13+ months, unresponsive)
Change in comms volume vs baseline
+0%
increase
–0%
decrease
Average change in conversion
+0%
higher conversion
+0%
higher conversion
Interpretation
Higher-frequency engagement improves performance until the segment-specific tipping point
Lighter cadence outperforms high-volume outreach for late-stage accounts
Adele Megdyatova
VP Performance & Analytics, InDebted
“Collections teams used to focus on scale — how many messages, how many contacts. Today, precision is what counts. By reading behavioural signals in real time, we can adapt outreach to each customer’s response pattern and find the balance between persistence and empathy. The right message at the right moment will always outperform a dozen untargeted ones.”
How leaders should act in 2026
Optimisation in collections messaging is no longer about sending the most messages. Instead, it’s about communicating better, by balancing volume, tone and timing across customer profiles, debt stages and channels.
Beyond aligning communication frequency with each customer’s situation, leaders must also ensure that language reflects the customer’s circumstances, intent and level of engagement. For example, a customer who’s just fallen behind needs reassurance and clarity, whereas one who’s re-engaging after months of silence likely needs brevity and focus.
Behavioural data and automation can help teams stay within the engagement “sweet spot,” increasing contact when customers are receptive and easing off when they’re not. In 2026, collections leaders should build communications strategies that adapt dynamically. In short: prioritise precision, empathy and timing over raw volume.
Key takeaway 4
Design for achievability: Turning intent into momentum
Across InDebted’s global portfolios, customers repay faster, and in larger instalments, when their plans feel achievable — emphasis on the word feel. Conversion isn’t just about data, process and strategy; it’s emotional, psychological, and highly variable for each individual consumer.
In 2025, we overhauled our payment plan experience. This included everything from design, copy and UI, through to optimising the flow for length and flexibility. The impact was immediate and consistent:
Australia
Resolution Speed
0.0x
0% improvement
Instalment Value
0.0x
0% improvement
United States
Resolution Speed
0.0x
0% improvement
Instalment Value
0.0x
0% improvement
New Zealand
Resolution Speed
0.0x
0% improvement
Instalment Value
0.0x
0% improvement
Canada
Resolution Speed
0x
0% improvement
Instalment Value
0.0x
0% improvement
When the goal is easy to see, and the experience is considered down to the detail, people commit. So far, we’ve found that shorter, clearer commitments build early wins, momentum and confidence.
Fuji Saidov
Senior Design Manager, InDebted
“Design is often seen as aesthetic, but the right design does more than look good; it performs. In collections, it’s behavioural economics in practice. Every interaction should reduce emotional friction and build trust. Our goal was to design for momentum, creating experiences that make repayment feel doable, not daunting. When customers feel capable, conversion follows.”
How leaders should act in 2026
For collections leaders, the message is clear: design repayment experiences that people can finish, not fear. Customers respond to plans that feel within reach, so achievability should become the default, not the exception. Optimise your user experience design with this in mind. That means shifting away from long, open-ended arrangements, and creating faster pathways that build momentum early.
Additionally, collections teams should balance speed with empathy. Shorter commitments should sit alongside affordability checks and vulnerability support for customers who may need added flexibility.
In 2026, the most effective collections will be those that turn intent into action by designing for momentum — making repayment not just manageable, but motivating.
Key takeaway 5
Email converts fastest across most markets, but SMS remains key for urgency
Our analysis shows that digital repayment is now near-instant, with most customers converting the same day they’re first contacted. But the channel driving that speed differs by region.
When comparing customers who received communications through email-only, SMS-only, or multi-channel contact, we found that email-only customers now convert faster than average in most markets, including the US, UK, Canada and New Zealand. These customers tend to be easier to engage and require no escalation to other channels.
Australia remains the exception, where SMS continues to deliver faster responses, prompting customer action more quickly than email.
Relative channel speed by market (Jan 2024 – Oct 2025)
Market
Faster channel
Relative speed
Interpretation
🇦🇺 Australia
SMS
≈ 0% faster
SMS continues to drive quicker customer responses after first contact.
🇺🇸 United States
Email
≈ 0% faster
Email converts slightly faster on average, though both channels achieve same-day results.
🇬🇧 United Kingdom
Email
≈ 0% faster
Both channels convert within hours; email shows a marginal edge in responsiveness.
🇨🇦 Canada
Email
≈ 0% faster
Email demonstrates stronger initial engagement; SMS remains effective for follow-ups.
🇳🇿 New Zealand
Email
≈ 0% faster
Email leads overall, while SMS still performs well for urgency and reminders.
Market
🇦🇺 Australia
Faster channel
SMS
Relative speed
≈ 10% faster
Interpretation
SMS continues to drive quicker customer responses after first contact.
Market
🇺🇸 United States
Faster channel
Email
Relative speed
≈ 5% faster
Interpretation
Email converts slightly faster on average, though both channels achieve same-day results.
Market
🇬🇧 United Kingdom
Faster channel
Email
Relative speed
≈ 4% faster
Interpretation
Both channels convert within hours; email shows a marginal edge in responsiveness.
Market
🇨🇦 Canada
Faster channel
Email
Relative speed
≈ 6% faster
Interpretation
Email demonstrates stronger initial engagement; SMS remains effective for follow-ups.
Market
🇳🇿 New Zealand
Faster channel
Email
Relative speed
≈ 5% faster
Interpretation
Email leads overall, while SMS still performs well for urgency and reminders.
Despite these regional differences, once a customer engages, the channel makes little difference. We found that click-to-conversion rates are similar across email and SMS. What varies is when and why each channel works best.
Email connects with customers who are already ready to act, while SMS drives immediacy and reinforces urgency. Multi-channel strategies perform best when each channel serves a clear purpose, not when the same message is repeated across multiple touchpoints.
Leyden Tolhurst
Managing Director (New Zealand) InDebted
“The way people respond to collections is changing. Kiwis are more digitally confident and more selective about how they engage. Email now drives faster conversions because customers choose to act on their own terms, not under pressure. SMS still plays a vital role in creating urgency, but the real advantage comes from knowing when each channel fits. By reading behavioural cues, we can anticipate the right moment to act — making collections proactive, not reactive.”
How leaders should act in 2026
The goal for 2026 isn’t to pick a winning channel. It’s to understand what each channel reveals about customer behaviour.
- Use SMS for immediacy: when customers need a clear, time-sensitive nudge.
- Use email for efficiency: when customers are already inclined to act.
- Use multi-channel strategically: to extend reach and reinforce trust, not to add noise.
For collections leaders, this means matching channels to customer intent, not just to deliver messages. Use behavioural data to decide who needs an immediate prompt and who responds best to an informative reminder. The strongest strategies will align with knowing when a customer is ready to act, and meeting them with the right message, in the right channel, at the right time.
Key takeaway 6
Improving customer contact data is an absolute priority for collections leaders in 2026
Today, accurate and complete contact data across multiple channels isn’t a nice-to-have — it’s a necessity. Our data shows that customers with multiple valid contact methods — including both phone numbers and email — consistently liquidate far more debt than those with only one way to reach them.
At three months (M3), customers with two or more contact methods liquidated around 380% more debt than those with a single contact.
M3 Liquidation Analysis
3-month performance by contact method coverage
M6 Liquidation Analysis
6-month performance by contact method coverage
M12 Liquidation Analysis
12-month performance by contact method coverage
That advantage held steady at six months (M6), with liquidation still 360% higher, and remained consistent at twelve months (M12), where results were still roughly 370% higher. Even at the earliest stage (M0), liquidation was 450% higher, showing the power of strong data from the start.
Scott Hamilton
CEO & Co-founder, ARM Tech Advisors
“The best contact data strategies start at origination. Don’t wait until accounts fall behind to fix bad data. Instead, build validation into every customer interaction, use multiple trusted data sources to cross-check contact details, and make sure you have clear consent and permissible use before engaging. That combination of breadth, verification and compliance is what keeps your data reliable.”
Colene McNinch,
Director of Business Operations & Compliance, InDebted
“After three decades in collections, one thing hasn’t changed: the need to balance contactability and privacy. That balance isn’t a trade-off, it’s a trust equation. Contactability lets consumers resolve obligations efficiently; privacy ensures they can do so safely and with dignity. A modern compliance framework must protect both — empowering consumers to engage on their terms while safeguarding their personal information as if it were our own. When we design for trust, not just compliance, we achieve both better contact rates and stronger consumer relationships.”
How leaders should act in 2026
Make 2026 the year you invest in contact data accuracy from the source. Treat it as strategic infrastructure, not a data-cleansing exercise. The ability to reach the right person — through the right details, at the right time — remains one of the strongest predictors of recovery speed.
Strengthening your KYC processes is one of the most effective ways to achieve this. By optimising data collection at the source, you position your business to accelerate recovery should customers fall into arrears.
Simple steps can make a measurable difference. For example, by requesting a secondary email address, physical address, or alternative phone number at sign-up, and routinely prompting customers to reconfirm their details to ensure they remain current and valid.
Every additional verified record compounds the likelihood of early engagement, while every unreachable account represents a missed opportunity to recover.
Key takeaway 7
Digital-first works — even for older customers
Our data reveals that digital responsiveness extends further up the age curve than most people might expect.
Average conversion by age group
While younger customers aged 18–28 remain the most responsive, those aged 61–79 also engage meaningfully with digital outreach — maintaining conversion rates of around 29% across markets and product types.
It’s only beyond 80+ where engagement drops more significantly, with conversion falling to 25%. The broader pattern is clear: digital-first contact isn’t just for younger consumers anymore. Even older customers are responding to digital communications and resolving debts online.
💡
💡
💡
Across markets and portfolios, customers aged 61–79 have an average conversion rate of 29%, compared to the youngest group at 36%, proving that digital responsiveness now spans multiple generations.
Brad Bone
Managing Director (United States), InDebted
“Digital should lead the way, but it should never close the door on human support. Our data shows that customers of every age now prefer resolving debt quickly and privately online, while a smaller group still needs reassurance or a conversation. The key is clarity. When people know who they’re dealing with, what to expect and how to stay in control, they feel safe taking action online. That’s what builds trust, regardless of the channel.”
How leaders should act in 2026
Rethink who your “digital audience” really is. The assumption that older customers avoid digital communication no longer holds true. Most consumers, including those well into their seventies, are comfortable engaging and resolving debts online, but they may need clarity, simplicity, and reassurance to take action confidently.
For 2026, focus on accessibility, tone, and trust. That means designing clear, readable communications, mobile-friendly experiences, and flexible digital journeys that work for everyone, while continuing to offer assisted options for the segment of customers aged 80+ who may still prefer human support.
Conclusion
Time to act: preparing your collections strategy for 2026
The data from 2024 and 2025 is clear: collections is evolving faster than ever. Technology, regulation and customer expectations are reshaping how debt recovery happens — and what good looks like. The organisations that will lead in 2026 are those already adapting, using data to design collections experiences that are effective, fair and human.
Across every finding in this playbook, one message stands out. Real progress comes from evidence, not assumption. The insights here show how AI, behavioural design and smarter communications are already improving outcomes for both businesses and customers. They also show what’s required next: proactive hardship detection, achievable repayment design and communication strategies that balance reach with empathy.
This is the moment to act. Benchmark your strategy against the data, align with emerging regulation, and invest in systems that make collections faster, fairer and more human. The next era of collections will be defined by those who use technology to serve people — not replace them.
