Contact Chris or subscribe to updates for free - here

Future of Credit and Collections: 2019

This year I am privileged to have been asked to research, explore and predict some what of the future holds for us in Collections and Recoveries.

Arum is 21 and whilst it is always fun to reflect on the past, we also thought it would be fun to project this to the future. Spending time with businesses across the industry UK most days, these predictions are based on an extrapolation of the trends and experience we see today.

Agree or disagree, let me know what you think.

The 10 predictions are

  1. Higher volume and risk within collections, default rates in unsecured collections will increase
  2. Increasing use of Robotics (RPA) and Artificial Intelligence (AI) to improve operational efficiency and customer experience
  3. The FCA has already been setting de-facto customer treatment standards and these be increasingly adopted across non-regulated sectors
  4. New processes will be needed to manage the increasing importance of the rental economy
  5. The Head of Collections role change dramatically and become different
  6. The customer will finally be king (yes really this time)
  7. We will see the end of collections call centres as we know them today
  8. There will be an increasing privacy divide in society, requiring change and control to manage
  9. Increasingly there will be multiple cloud based collections systems, rather than a single one
  10. Yet more direct involvement and regulation by government, it is not going to stop

… and one extra that did not make the list!

  • A major focus on cost control as prime customers retreat to financing via secured loans

It will be interesting to see how many come true…. you can read the full report here… 10 predictions on the Future of Collections and Recoveries

Posted in Blog | Leave a comment

‘DON’T PANIC’ as GDPR deadline looms

The other week I was lucky enough to spend a bit of time with Dentons, who had Giovanni Buttarelli (the European Data Protection Supervisor) as a speaker. Obviously GDPR was top of mind for the audience and in particular some of the legal nuances with implementation.

There were a couple of key themes discussed.

Impact of Brexit:  This is becoming an increasingly pressing issue politically in the UK. Although GDPR will be implemented in May 2018, we also need to consider what will happen if the UK leaves the EU. At that point it will become a third country (unless in Single Market) with associated restrictions for data.

“Personal data shall not be transferred to a country or territory outside the EEA unless that country or territory ensures an adequate level of protection for the rights and freedoms of data subjects in relation to the processing of personal data”. [link]

In order to establish adequacy, the view was that it would take considerable resource and time (more than a year). There is obviously hope for an agreed compromise, however preparations should take place.

Obtaining guidance and advice from the regulator:  Although national regulators like to help, they are limited on resource and with such a significant change will not realistically be able to provide tailored advice to each firm on request. While UK has been working hard, Germany and Austria are advanced and ready, so don’t expect too much direct guidance from the regulator. [It may be worth taking independent advice].

Priorities for enforcement: The change impacts a wide swath of industries and business and is a complex area. Firms who are non-compliant will most likely be viewed through the follow lenses.

  1. Is the firm actively trying to comply and doing something to improve their compliance? (i. doing nothing is not good).
  2. Has the Data Protection Officer been selected appropriately?  Do they have expertise and independence?
  3. Is the firm transparent with privacy issues?
  4. Is this explained to the customers/subjects in a simple form?

Lack of resource – risk of non-compliance

GDPR is a complex area, the legislation is complex and is requiring significant effort to implement.

The consensus across the room was that many firms have developed central programs that are already underway, with data discovery and some pre-work already in place.

However, what was also clear was that this is, only now, gradually rolling out to the wider organisation for implementation. With less than three months to implement, and fines in place for non-compliance (and especially if nothing is done), this could represent a material risk to many organisations. The changes are not insignificant.

Previously published at

Posted in Blog | Leave a comment

Credit Summit 2018

Last week was the Credit Strategy – Credit Summit, a smorgasbord of credit and collections related topics.

In our daily roles there is often intense focus on the collections and recoveries process itself. However, this week, in particular, is a nice change, allowing a step back to reflect on some of the wider economic and political influences impacting the industry.

With perspectives from three groups, what I will call the economists, the politicians and the industry, a couple of items stood out.

The economists

With some leading economic commentators and survey firms, this session really helped to set the scene. Some of the details we know, some were new, however the consensus was that we live in times of change. Economically we have been living in unusual times and, just like the recent snow which looked so calm and serene until it started to melt, when normal conditions return it is only then that the full impact of the events become apparent … a return to long term ‘normality’.

  • Economic growth: The UK is currently lagging in terms of growth (US 2.5%, rEU 2% and UK at 1.5%). The view was that the UK has not been investing in productive capacity (in part due to the uncertainty generated from Brexit).
  • Interest rates: These were expected to rise, probably to around the 2.5% range. This will be a shock to some consumers and businesses who have become complacent with low rates and ‘easy money’. Higher rates will improve the profitability of the banking sector though and we will need to watch for impacts in the loan space. However, with the high percentage of fixed rate mortgages, it is expected this will take time for the full impact to flow through to the mass market and therefore the economy.
  • Data and the data economy: This has been a big theme over the last few years, driving significant investment in business, in particular in the areas of Security, Fraud, Analytics and CRM. AI is an emerging theme, and expected to be disruptive, especially to the call centre business. However, what was also interesting was the levels of perceived trust consumers have with businesses; banks are trusted, however social media and even some governments and telecommunications companies were not. Still more to do in this space and with GDPR around the corner, this trend is expected to continue.
  • The elephant in the room: Brexit was the topic no one really wanted to talk about, it and its impacts were avoided. However, IPSOS data did point to 69% of businesses not confident that a deal will be a good one for business. Certainty is what they crave going forward.

The politicians

A couple of leading opposition politicians were available for this discussion, although unfortunately no one from the government was able to attend.

  • Concerns were highlighted around the impact of short term lending and its impact on some consumers. This was quoted as ‘borderline illegal at the extremes’.
  • The impact of universal credit and student loans were also both mentioned. Student loans should be thought of as a tax, rather than a loan, it was pointed out. Persistent debt and giving people a chance to get out of debt was a topic of conversation.
  • Overall there was some concern that the level of borrowing has been continuing to increase. Although the system is more stable than in 2008, an amber light should be flashing, especially with car finance funding 86% of all new car purchases.

The industry

The industry reaction was somewhat muted, typically taking a line between what is possible in the economy and allowed by the politicians. However, a couple of thoughts and discussions were evident.

  • Persistent debt and financial difficulties: This remains a theme, and many tools are being successfully put in place to address these issues from a collections point of view. However, the area is one where more effort must be made around the sustainability of the initial lending decision.
  • Data protection and GDPR: Clearly an emerging theme. Readiness for GDPR is still rather nascent and centrally controlled. It is imperative that this is rolled out and operationalised, and links heavily with issues of transparency and trust within the consumer base.
  • Automation and AI: Artificial intelligence (AI) in particular is an emerging theme and viewed as having potential to significantly automate processes across the credit lifecycle. It is already being used and tested in some banking scenarios, with a split between those that see this as cost elimination vs those that are seeing it as ‘service augmentation’. Watch this space; it is an area of opportunity.
  • Brexit: This is inevitably a significant change across the UK. Although details are still unclear, it is important to start to plan and have contingency plans. For example: considerations if the UK becomes a third country to the EU, procedures for customers outside the UK, processes if assets are taken outside the UK … all to be designed.

Overall a very interesting and thought-provoking exchange of ideas. A thank you to the Credit Strategy team for running a great session.

Previously published at

Posted in Blog | Leave a comment