In my interactions this week everyone pretty much mentioned being busy, really busy. It does seem economic and activity levels seem to be trying to make up for lost time, with average debt down, and indeed the banks seeing fewer loan defaults as a result of COVID, it all seems quite positive.
Averages can of course be misleading. If I have one hand over the fire and the other in the freezer, on average I am just right. In reality, however I am a getting toasted frostbite and something similar is happening here.
Homeowners, those with an income and typically older, generally seem to be doing better. They are making the most of lower expenses to pay down credit cards, debt and even save a little.
However, those with less stable income, still on furlough, typically younger, for them not much has changed. And, whilst record government support has kept arrears in check, this is reducing and impacts are gradually flowing through to individuals, the economy and the banking sector. With insolvencies starting to rise again, we could be starting to see some of this already.
May the 4th be with you
This week also marked another milestone, the UK Financial Services Bill (now Act) passed into law. Routed in updating regulation post UK leaving the EU, it also brings lending activity such as Buy Now Pay Later under greater regulation and amends wording for the debt respite scheme (breathing space).
Speaking of Breathing Space (debt respite), we are almost there. May 4th, next Tuesday, is go-live.
With the prospect of many people struggling as the result of the pandemic, it does seem legislation that is extremely timely. The volume of uptake and associated impact on lenders on this we will need to wait and see.
Undoubtedly however implementation challenges are more complicated than they may first appear though. I am expecting furrowed brows in some areas next week, as the implementation details become apparent.
Return of the office
On one hand, I am starting to hear of firm dates to return to the office (albeit part time, hybrid working) starting to trickle thorugh. On the other hand I have also been hearing anxiety about any return.
It is hard, amidst all the agendas in the media, positioning opinions on why we should return, to see what people actually think.
No doubt it is different by sector, but for many folks flexibility, short commute times and the trust given by employers to employees has been great. People have stepped up to the plate and delivered. Productivity has increased, albeit with an impact to creativity.
The clear desire is trying to keep the good bits, what has worked well, yet regain some of what we lost.
Cakeism maybe, but this a point outcomes such as a forced return in the office, only to still be on video calls all day, or a partial return (some of the team still at home) combined with a continued expectation of extra hours delivery despite losing time again commuting, will not be well received.
All we can say at this point is more change is coming. We will need to watch closely as it evolves and be ready. Planning for changing employee, customer expectations and leveraging all the new technology we have just installed is going to be important. Important for customer retention, employee retention, satisfaction and making the most of the situation to actually transform business processes, rather than return to old ways. Still plenty to think about.
It is a bank holiday in the UK next week, hopefully, the weather holds. Have a good long weekend everyone…