Many great returns

The big event of last week was the Credit Strategy Collections and Vulnerability summit featuring the U&T conference.  It was an interesting event, discussion, and once again an opportunity to meet people in person.

As previously discussed, meeting people, in person for the first time, can feel a strange experience and it was not much different this time around.  However, what I did notice was if I knew someone well from video calls, that once we were over the initial “hello” our discussion would then carry on as if we had known each other for a long time…. which I suppose we had, just on video.  It really did all feel very natural.

I suppose this is not that surprising, but it does seem all that discussion, and work, getting to know people over lockdown, really does pay off.  It is not really reset on meeting, so good news.

There were also a couple of interesting themes at the conference itself.

The great return to the office.

Much discussion I have heard up until now has swirled around the many benefits of remote working and continued working on a hybrid basis.  This week however I happy started to increasingly hear more arguments from supporters for an office return. 

Having not had the weight of events on their side until now, they are clearly starting to feel more confident.  Arguments were being vocally pressed, explaining how ‘employees are just so happy to be back’.

Of course, much of this will depend on the demographic, age of workers and role type, it is unlikely to be one-size-fits-all.  It does feel like waiting to ask the question again, after any initial excitement from meeting people again subsides, is probably worth it before jumping to any conclusions here.  [… and of course, with new COVID measures announced over the weekend, all of this could be somewhat premature too].

The return of inflation.

Inflationary pressures are increasingly starting to get mentioned.   With gas and electricity prices leaping, and rumours of £2 per litre petrol, all of this is going to have a significant impact on affordability.  Customers of course need to stay warm, and get to work as a priority, so this will start to feed through to arrears levels.  It seems we are going to have to be prepared and prepared soon (likely early in the new year).

The great resignation

Staffing and recruiting is still a burning issue for many companies, many appear to have large swaths of employees announcing they have found new roles. 

The question I have been mulling on is why is this occurring, and founds some plausible answers this week.

No one has moved roles for the last 18months, so we have a lot to catch up on –  it is just all happening in a shorter period of time.

Also, many older employees in the workforce have just decided to not come back.  With COVID, new younger employees have also not yet entered the workforce. With about 500,000 employees entering and leaving the workforce in the UK every year, this kind of made sense.

With the turn of the month to December, there are only a few more weeks to get things ready for the break over the holidays and then into the new year, so a few important things to think about this week.

Have a good week everyone.

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Not mincing words on preventing customer harm

This year I have forbidden myself from buying any mince pies until December. Those sweet, pastry-encrusted, treats are a particular weakness and one that retailers seem to attempt to tempt me with earlier each year – but far so good, I have remained strong – it is however a strong signal that the end of the year is starting to creep upon us.

There were two stories in particular that caught my eye his week

The first was the FCA proposal to ban debt packagers from earning referral fees. From my conversations this week, it did seem it was broadly welcomed by the industry. The FCA is clearly becoming increasingly assertive and proactive in its stance towards preventing customer harm… and, by joining the dots you have to wonder if this is a reflection and anticipation of future events impacting customers in the lending market.

The other story was what appeared to be a disagreement between Amazon and VISA, whereby Amazon gave notification to customers in the UK that VISA credit cards would no longer be accepted for payment from January 2022… all due to high transaction fees.

Now, this of course may all be positioning (the rates are not all that different) and an agreement will be thrashed out before then, but I was sat wondering if this was yet another symptom of the pandemic and attempts by companies to recover lost margin and revenue.

I have started to see similar behaviour in my own shopping basket recently. It does appear that inflationary pressures are building. Whilst interest rates have not increased in the UK yet, this is now widely expected. Combined with increased fuel cost it is all going to put increasing pressure on the poor consumer.

It is something we clearly need to think about and anticipate in our collections strategies and processes now… modelling these increased costs into affordability templates, working through the impacts on both lending and arrears volume, establishing options for customers.

I know we all really want this to be over, and sometimes if I close my eyes it feels as if it is ending… but headlines such as these could be pointing to it being just the end of the beginning… if the case, now the real work starts… getting ahead is going to be a priority.

So maybe not quite so cheery this week… time for a cup of tea, mince pie to get cracking tomorrow I think.

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Are you full yet – squeezing more time from the day

A bit of a shorter post this week, due to what appears to be more busyness seemingly squeezing the time out of the week. Is anyone else noticing this btw?

I mean lockdown was tough… but with hindsight, it did have the distinct advantage that all of a sudden I seemed to get my weekends back.

There was time to watch a movie, go for a walk, spend quality time with family or just be around the house… all this of course, when I wasn’t cowering behind the sofa afraid of catching something nasty from the supermarket delivery.

Fast forward to today and whilst is it great those old activities have re-appeared, time is just… getting squeezed out. I am finding it hard to still do everything.

Sports activities, meeting friends, commuting, and now even face-to-face meetings. Just how did we manage before? I am at a loss.

What is clear though, we are going to have to find a new balance, or it will be exhausting and we will all start getting burnt out (again).

Remote – hybrid working

This sentiment came up in a global discussion on the collections industry this week too. It was clear that blended working, for the moment at least, is being seen as the preferred, more effective option, maybe it can help in part enable this balance.

If you want to see how you compare vs other collections operations across the world, you can still get the results by taking the survey here.

Needless to say, this approach is not all rosy. Noises are being made by the FCA about expectations should these (as they see it) temporary arrangements become permanent… and they do not pull their punches.

Firms should be able to prove that the lack of a centralised location or remote working does not or is unlikely to: 

  • Affect the firm’s location in the UK, or its ability to meet and continue to meet the threshold conditions for the regulated activities it has or will have permission for – or any equivalent requirements, where these do not apply.
  • Reduce the accuracy of the Financial Services (FS) Register for others if, for example, consumers are not able to contact the firm at the principal place of business shown on the FS Register. 
  • Affect the ability of the firm to oversee its functions including any outsourced functions. 
  • Cause detriment to consumers. 
  • Damage the integrity of the market. 
  • Increase the risk of financial crime. 
  • Reduce competition. 

A firm must also prove that there is satisfactory planning: 

  • That there is a plan in place, which has been reviewed before making any temporary arrangements permanent and is reviewed periodically to identify new risks.
  • There is appropriate governance and oversight by senior managers under the Senior Managers regime, and committees such as the Board, and by non-executive directors where applicable, and this governance is capable of being maintained. 
  • A firm can cascade policies and procedures to reduce any potential for financial crime arising from its working arrangements. 
  • An appropriate culture can be put in place and maintained in a remote working environment. 
  • Control functions such as risk, compliance and internal audit can carry out their functions unaffected, such as when listening to client calls or reviewing files. 
  • The nature, scale and complexity of its activities, or legislation, does not require the presence of an office location. 
  • It has the systems and controls, including the necessary IT functionality, to support the above factors being in place, and these systems are robust. 
  • It’s considered any data, cyber and security risks, particularly as staff may transport confidential material and laptops more frequently in a hybrid arrangement. 
  • It has appropriate record keeping procedures in place. 
  • It can meet and continue to meet any specific regulatory requirements, such as call recordings, order and trade surveillance, and consumers being able to access services. 
  • The firm has considered the effect on staff, including wellbeing, training and diversity and inclusion matters.
  • Where any staff will be working from abroad the firm has considered the operational and legal risks.

This is one to watch closely and something I know Kevin Still from Demsa has been raising… No doubt we will discuss further on this when we get to chat later in the week.

A new role for conferences and meetings

Outside of financial services and servicing, it does however, on balance, feel as if the world is starting to gradually move towards this outlook of a more hybrid-based model of working. For many it is clearly more efficient (esp managers and knowledge workers).

This being said, judging by everyone’s ecstatic reaction on meeting face to face again the other week, there is something intangible that makes meeting in person so rewarding. This is something that clearly is going to be hard for us to give up completely… as humans we just love social interaction too much.

So, maybe this will become the future of conferences… we work remotely most of the time, then meet up, together in large time-efficient meetings, where we can meet many people in a short period of time. It is networking and spending time together without all the frequent traveling. It is an interesting thought, even from an ESG point of view.

On Environmental Social Governance (ESG)

This was a further interesting topic raised last week. As a topic this has been around for a while now, but maybe off the back of COP26, it seemed to bubble to the top of the agenda again, being raised as a point in Manchester.

For the collections industry, we have, for many other reasons already been focused on good customers outcomes.

However, it was an interesting call as to whether we should also wrap this more formally into a wider social and environmental dimension under ESG. Are we doing enough?

Maybe one to think about a bit more this week.

Have a good week everyone.

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