Having had a complete switch off, for a week off – I am getting back in the swing of things this morning and catching up.

Obviously, the debt packager restrictions have been a headline, as have the rumbling noises of increasing interest rates and potential impact on the housing market (house prices seem to be up there with the state of the NHS and price of a pint of beer in the national psyche, so expect this to go on for a bit longer too… )

But, the following article caught my eye this morning… Interest rate caps in some US states at 36%…

A maximum interest rate cap?

In Europe there are already maximum interest rate restrictions for consumer lending in some markets… nearby examples include France at around 21.24% and Ireland at 48%.

In the UK we have generally decided to opt for a more complex set of regulations rather than a pure cap, with daily amounts, total repayments and fee limits. 

This being said, in the UK you can still find rates online commonly above 50-90% APR for sub-prime loans, above 25% for near prime and even prime credit cards at 21%.

Are changes to come?

With interest rates rising and inflation squeezing incomes you have to wonder if more changes are due here. 

This has been previously debated and would certainly change the dynamics in some areas of the credit market, impacting both general access to credit and the margins for lending businesses, many of whom are already squeezed by an increasing cost of funding…

With media noise around lenders/lending in general increasing, could this easily be seen politically as a popular, quick, easy target and change to offset the increasing cost of living? If the case it could be something we may have to react to.

What to do now?

At the moment, I would hasten to add, this is in the realms of complete speculation and conjecture… however I do like to be prepared, and much of this is good business practice in any case.

If there were changes, it would, of course, put pressure on the collections/receivables process yet again, intensifying focus before any effects for constricted lending start to flow through.

Making sure that these processes are efficient, effective, with a demonstratable duty of care towards consumers and borrowers is important today… it would be critical should this happen…

And, as we learnt from the pandemic, getting ahead of the curve, being ready and flexible makes all the difference in how easily you can respond to handle the change.

There are of course many ways to review your processs, be it from full process/customer journey reviews to looking at resources online at lower price points… it all helps to compare vs peers and get ideas. (drop me a note if you would like some pointers for these too).

However, although the UK is a leader in many areas (especially consumer treatment), there is also an opportunity to learn from other markets.

Many of these are already managing under these restrictions already and by listening to peers elsewhere, and sharing experience, we can also get better…

So maybe it is time to get out the travelling shoes and get out there a little more too…. something to also ponder this summer.

And what was I up to on vacation….?

Having not been on a rollercoaster for 30 years (like a fool…) I ventured to Blackpool to try the latest ones out. 

I am afraid of heights and no one will believe me when I say I was more scared on the stairs… honestly.

Anyhow the picture tells the complete story really – complete terror

… sometimes you just have to be brave and throw yourself into things…

Have a good week everyone.

Summer seemed to arrive this week. No more hiding indoors huddled over a screen. With warmer weather, it’s the opportunity to get outside.

So sitting outside this weekend, basking in the sun, my mind turned to the garden… Annoyance, that the Heron seemed to have snacked on all of the fish in my pond. Amusement as to why there appeared to be some items of washing on my roof; And then the big question, what would be the best biscuit for my cup of tea, with the latter being a source of some consultation, with both ‘formal’ and impromptu surveys over the week driving some considerable heated debate.

That’s rich

The big shock from this survey was that no one seemed to mention the poor old rich tea biscuit, a standard staple of my youth… It seems, these days, it is all about the Digestive instead.

In the taxonomy of biscuits, digestives, apparently hold the unique position as the gold standard against which all other biscuits can be measured. Hobnobs, chocolate coatings, and cream fillings are all a step up, before getting to the real controversy… the jaffa cake and of course tea cakes…. luxurious yes, but are they even biscuits!… but Rich Tea, not to be seen.

Let me know your favourites here….

Nearing the end, of the beginning

In other news, consumer duty is starting to come back on the agenda again, with more webinars and increased visibility.

There are now less than 75 days left to go, and time is very very tight. This is especially the case if substantial changes need to be made.

In discussion with Frank Brown and Kevin Still, both experts in this space, it does feel like there is still much more that needs to be done generally in the industry.

For Collections in particular the challenges I have been hearing is around the evidencing of good customer outcomes (MI), together with cultural change. There is still mich to do.

I have added the interview with Frank, and a summary of the Consumer Duty in the links below.

• [RO-AR Video] : Regulatory and Cultural Changes upon us
• [RO-AR INSIGHTS] : FCA Consumer Duty Summary

AI – are you fed up with it yet?

The news and excitement around AI does not seem to be slowing down. It is quite tiring, the topic is no longer fresh, but every week there seems to be a new development.

I am starting to wonder if this is another turning point or inflection for us, in the same way, mobile phones, computers, the Internet, TVs, plumbing, cars and washing machines were… just from this week, some highlighted stories

• There has been more discussion on the further increase of the number of tokens used within the models to make them more powerful
• Open Source models are now also starting to come online too, this is no longer just ChatGPT, Bard and Bing Chat, but fragmenting with open source GPT too.
• And, governments starting to pay attention, but to be honest struggling to pick up speed, with the EU (and Brazil) being furthest ahead on legislation.

In the media, there is still an awful lot of negativity. We are often fearful about what we do not understand.

This was the same, if you remember, for Cars, TV, the Internet and more recently Blockchain. I am still in the camp of viewing these AI- Large Language models as being huge time savers, allowing me to do more and freeing my time to concentrate, create new things and enjoy that biscuit.

We can either choose to adopt or not, in all of these cases… however, I am get the distinct feeling, much like the early days of the internet, of the lift being on the ground floor and going up.

If you get on, it can result in fantastic opportunities and fun… if you do not, life will continue as normal for a bit, but then there is potential to get left behind… (and if you are left behind the stairs are awfully hard work to catch up).

Something else to think about these days… a topic I will no doubt we will come back to again… have a good week everyone.