Businesses pursuing overdue payments across borders risk weakening debt recovery efforts by relying too heavily on artificial intelligence, an Atradius executive told Trade Finance Global. Lucy Stagg, the company’s regional manager for the UK and Ireland, said translation tools can miss cultural nuances and damage the trust needed to resolve payment disputes, particularly when they replace local intermediaries.
The challenge comes against a difficult backdrop for UK businesses. Trade Finance Global reported that economic volatility, stretched supply chains, raw material procurement delays and unpredictable energy prices have increased debt pressures. Citing Coface, the outlet said UK payment terms average 57 days and more than 90% of businesses had experienced payment delays over the preceding year. Credit managers consequently face difficult decisions about which outstanding debts to pursue first.
Stagg said international collections require an understanding of legal and cultural differences that do not necessarily arise when a transaction is first agreed. According to the report, interest can serve as a bargaining tool in UK negotiations, whereas interest and fees are expected in full in the Netherlands. Businesses operating under Sharia law cannot charge interest. US recovery procedures also vary between states and often require court judgments to establish that payment is owed.
Local collectors can help creditors navigate those differences while preserving communication with debtors. Stagg warned that AI-generated repayment requests may lose important detail or adopt an inappropriate tone, discouraging responses. She also said counterparties who suspect AI is being used may question the credibility of the communication. Maintaining constructive relationships is especially important with smaller businesses, where the same employee may handle both sales and collections rather than working in separate departments.
AI-generated explanations can also obscure the underlying reason for a dispute, forcing collection agencies to seek clarification and adding administrative work, Stagg said. However, she identified a more useful role for technology in automating invoice and payment reconciliation. Reducing manual processing could allow credit teams to spend more time speaking directly with debtors and building relationships. Real-time payment information could also improve oversight of customers whose infrequent transactions otherwise provide only limited visibility into their credit risk.