Interest rates – rollercoaster

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.

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The cat’s whiskers- Content is a-changing

Being, yet another bank holiday and some great weather again, this weekend I felt the pressure to get outdoors… The garden office is now being opened (so if it rains next week it is all my fault of course).

However working outside, there were also a couple of observations this week.

  • Firstly, I realised if cats learn to open fridges, we’re in big trouble. My cat has clearly worked out that this is where the food is… and is taking a great interest, really great interest whenever I open the door… I suspect a plan is brewing… and half expect to stumble over MS project plans and engineering diagrams behind the sofa.
  • The tea and biscuit debate continues… Twix, and chocolate hobnobs have moved up with digestives still in the lead… with ginger snaps making a surprise entry… and sorry no dunking… I am off camping this weekend so it is highly likely Tunnocks Tea Cakes will also make an appearance… full report next week.
  • Work-wise, Emojis seem to be increasingly infiltrating LinkedIn posts… my suspicion is that this is the subtle hand of ChatGPT at work… it has a predilection for emojis and cannot seem not to help itself… it could also be that this is an indicator of increasing ChatGPT usage, which is also happening.
  • The volume of content marketing also continues to grow… it feels we are moving from a busy doing to a busy selling period. What has me a little concerned is, what with economic trouble in the background, this could be a signal for more troubled times ahead (ie if businesses are looking for customers but no one is buying)… one to watch and listen for.
  • As noted in my discussion with Kevin Still this week too, we realised we have less that 70 days to go until the FCA consumer duty goes live…this is not a lot of time and the topics of good metrics to evidence good outcomes keeps coming up… something to expand on next week.
  • Lastly around content. I have been reflecting on attention spans and long-form articles. Are our attention spans becoming shorter and patience with reading becomes thinner?… my data says I think so… So a new format this week and better summaries of articles, videos and news not being posted on Let me know what you think and whether this works in the comments below.

Have a good week everyone

Stories from last week

  • Sam Altman expressed concerns about AI regulations in the EU:
    During a side panel discussion hosted by the University College London, Sam Altman, CEO of OpenAI, expressed his concerns about the European Union’s definition of “high-risk” systems in proposed AI regulations.
  • Ofgem announced a 17% reduction in the energy price cap:
    UK regulator Ofgem announced a significant 17% decrease in the energy price cap, which is expected to result in lower energy bills for millions of consumers.
  • Lenders agree to pay out up to £47 million in redress to borrowers in difficulty:
    The Financial Conduct Authority (FCA) announced that nearly 100 lenders have agreed to provide redress, including reduced or temporary payment options and changes to loan terms, for borrowers facing financial difficulty.
  • Young investors prioritize long-term goals when dating over investing:
    The Financial Conduct Authority (FCA) conducted research revealing that young investors prioritize long-term goals when dating more than when making investment decisions.
  • British individuals are the biggest victims of card fraud in Europe:
    British individuals are identified as the most targeted victims of card fraud in Europe.
  • Inflation falls to 8.7% in the UK:
    The Office for National Statistics (ONS) provideed insight into the inflation figures for April.
  • Average income in the UK is £242 short each month:
    A campaign to ‘take on poverty’ and address the urgent needs of individuals impacted by low incomes and rising costs was launched last week.
  • OpenAI may consider leaving the EU due to AI regulations:
    Sam Altman, CEO of OpenAI, mentioned during the side panel discussion that OpenAI may consider leaving the EU if the proposed AI regulations classify their language models, such as ChatGPT and GPT-4, as high-risk systems. (although he has since rowed back from this position)
  • FCA is working with lenders to improve treatment of borrowers in financial difficulty:
    The Financial Conduct Authority (FCA) is collaborating with lenders to enhance their approach to supporting borrowers facing financial difficulties and is seeking significant improvements in borrower treatment.
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Still time for tea?

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.

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.

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