Collection Agencies Report Record Account Volumes As AI Adoption Surges

TransUnion’s seventh annual industry survey finds that technology investments are accelerating as firms navigate declining liquidation rates and persistent staffing challenges.

The debt collection industry experienced a decisive shift in 2025, with 64% of companies reporting increased account volumes over the past year while simultaneously confronting margin compression that’s driving unprecedented technology adoption, according to TransUnion’s seventh annual Debt Collection Industry Report: Investing For Impact.

The survey shows that although account placements are rising, the accounts themselves are becoming harder to collect. The industry’s response has been swift: artificial intelligence and machine learning adoption jumped from 73% in 2024 to 93% in 2025, with only 7% of companies now reporting no plans to deploy these technologies.

Volume Growth Meets Collectability Decline

Looking forward, optimism remains strong. Seventy-five percent of companies expect account volume to increase over the next 12 months, with 48% forecasting double-digit growth. Debt buyers were the most bullish segment — 88% expected volume increases and 67% anticipated growth exceeding 10%.

The picture becomes more complicated when examining liquidation trends. While 39% of companies reported improved account liquidity over the past year, 28% experienced declining collectability. This reflects “ongoing challenges in portfolio composition, consumer payment capacity, account age and collectability,” according to the report.

Third-party collection agencies faced the steepest challenges, with 34% reporting decreased or significantly decreased liquidity. Law firms emerged as the outlier, with 53% reporting improved liquidation rates and only 6% seeing declines. This performance likely reflects the nature of legal collections, which often involve higher-balance accounts and more formal recovery processes.

Company size proved a strong predictor of liquidation success. Among organizations with 100 or more employees, approximately 45% reported increased liquidity, with only 1% experiencing significant decreases. In contrast, 29% of firms with fewer than 20 employees saw liquidity decline.

Technology Investments Accelerate

The industry’s technology transformation is no longer incremental. The average debt collection firm now uses 6.7 different tools or systems, up from smaller mixes in prior years. Only 5% of companies reported using none of the listed technology tools, including chatbots, virtual negotiators, email, text messaging, and more.

Technology budgets expanded faster than any other operational area, the report noted, with 76% of companies planning to increase technology spending over the next two years. This compares to 56% planning employee compensation increases and 46% expecting to boost marketing or compliance management budgets.

The driver behind these investments has shifted. Nearly half (48%) of companies identified increasing agent productivity and improving margins as the primary motivation for technology spending, while only 14% cited regulatory compliance as the main driver — down from 28% in 2024.

AI Moves from Pilot to Production

The AI adoption curve steepened dramatically between 2023 and 2025. In 2023, only 49% of companies were using or considering AI/ML technologies. That figure climbed to 73% in 2024 and reached 93% in 2025 — nearly doubling in two years.

The applications are specific and measurable. Quality and compliance monitoring led AI use cases at 47%, followed closely by chat or written communication (47%), scoring and treatment strategies (45%), voice communication (44%), and negotiation support (42%).

“AI/ML engagement increases with scale, but the real divide isn’t just who uses AI/ML, it’s how deeply they commit to it and whether they’re building capabilities of their own,” according to the report. “Smaller firms tend to sit on the sidelines or test vendor offerings, while larger organizations are more likely to anchor AI/ML in their core operating models.”

Self-Service Becomes Standard

Digital self-service capabilities have expanded rapidly across the industry. More than 98% of organizations now offer at least one self-service capability, the survey found, compared to about 87% in 2024. The most dramatic growth occurred in website or virtual negotiators, which increased by 35 percentage points to reach 64% adoption.

The ability for consumers to establish payment plans via self-service rose to 87%, while recurring auto-payment options reached 90% adoption.

Online payment portals have moved from supplemental to a central offering for consumers. About 87% of companies now provide consumers with portal access, and more than one-quarter of organizations receive over 40% of their payments through online portals.

Traditional payment channels continue their decline. Only about 6% of respondents receive 80% or more of their payments through mail, while approximately 55% receive less than 20% via this channel. Nearly 64% of companies now receive less than 60% of their payments through live agent calls.

Workforce Challenges Ease

Staffing pressures showed unexpected relief in 2025. The share of companies rating hiring as “very” or “extremely” challenging dropped from 62% in 2024 to 48% in 2025. Retention challenges also eased, with 26% now reporting “very or extremely challenging” conditions compared to 37% in 2024.

Remote work has become foundational, with 82% of companies using remote labor for at least part of their business activities. Seventeen percent of organizations said they rely on remote workers to support 75%–100% of their operations.

Data Security Continues to be a Big Concern

Data security and cost control topped the list of industry concerns. Data security concerns affected 50% of companies at least moderately, while 58% expressed at least moderate concern about controlling costs. Among original creditors and loan servicers, 79% were at least moderately concerned about controlling costs, including 33% who were extremely concerned.

Read TransUnion’s Debt Collection Industry Report: Investing For Impact.