This last week was the Credit Connect Collections think tank. There was some good attendance which was great, and we were lucky enough to have some great speakers covering some new topics.
On the day it is always busy, juggling between asking questions, fielding questions from the attendees, and keeping the time on track. However, there were a few trends that really stood out.
Everyone is really busy
I don’t know what has happened since the start of this year, but the world seems to have woken up from its slumber the last few years. Everyone without fail was rushed off their feet busy, making changes and getting stuff done. Maybe this is just a contrast to last year or a maybe sense of anticipation of change to come, but something seems to have changed for sure.
Arrears volumes are now starting to flow through
This could be just the seasonal peak, but it certainly sounded like arrears volumes are starting to flow through and into the collections process. The energy sector has already seen this for the last 6 months, but other areas are now reporting seeing this too… consumer resiliency is clearly starting to fade in the face of continued energy, food and interest rate inflation.
New demographics for Collections
The increase in arrears volumes is also now impacting new consumers, ones that have never been in collections before… this could be a new theme or segment where we need to think about education and special treatment programmes going forward.
The rush to digital is maturing
There is a step back from pure digital to more blended process design and solutions. Digital has not gone away and in some cases is preferred by customers. However, it is being recognized that you need to have good digital off-ramps. Some consumers need to speak with an agent…. in fact, calls may become longer and more complex as complex cases are concentrated with agents, with simple more transaction calls being taken out digitally.
Employee experience drives customer experience
Employees still remain a critical part of the collections infrastructure. This does not mean less technology, in fact, quite the opposite. We can use technology to help and assist the team in supporting customers… call guidance, quality, real-time information… it can all really help.
Lots of excitement around generative chat (ChatGPT and others)
Although there was hesitation on fully automating collections conversations with GPT, the time is not quite right, some use cases are starting to come to the fore. In particular the use in summarising conversations and extracting key points from conversations… one to watch develop.
Looking beyond the SFS
More controversial this one… the SFS (standard financial statement) is a key tool used to assess affordability, standard across the industry but cumbersome. Are there other methods and tools that can be used to do this in a less onerous manner?… maybe… certainly triaging questions, open banking data and other triggers seem to be picking up interest… although the SFS is unlikely to be replaced any time soon!
Vulnerability – beyond a label
The logging and treatment of customers in vulnerable and potentially vulnerable situations is evolving fast… providing options for customers to get the same service and good outcomes, accounting for whatever potential vulnerability may be there. It is fascinating watching how this topic has evolved and it continues to do so… looking back you can see just how far we have come… it is a good thing.
Leveraging local support networks
Despite all the talk of automation, we were also reminded that local is great too. Partnering with local support organizations can make the world of difference for some customers… will this be a new theme? I feel sure wider interconnectivity of support will be.
PR issues in collections
Despite all of the progress in supporting customers in financial difficulties and those in vulnerable situations, the collections industry still has a PR issue… old pre-conceptions seem to continue to amplify any process errors or incidents… This is not to say there is no poor practice that can be improved, there is, but the industry has come a long way and can offer great support for customers at a difficult time.
However, the persistent PR issue remains a challenge, particularly for new demographics in collections, causing hesitation for customers in contacting lenders. A challenge we increasingly need to solve.
Consumer Duty – urgency needed
A series of Dear CEOs letters from the FCA is reinforcing the need for action on Consumer Duty. Yes, plans need to be in place, but audits will be made and they will be looking for real tangible action to be taken and implemented… all from July 2023… the clock is ticking, and pressure building
All in all, an interesting discussion and bunch of topics…. looking forward to the next one.