Humph, the new year starts for real this week; back to work and back to school. Like champagne, cold, fizzy, refreshing on New Years’ eve – already opened warm and flat it, the next day, somehow does not seem quite so exciting. Yet, here we are and before the craziness really starts next week it is a good time to look at 2023 predictions.

This year the number of papers forecasting 2023 seems to have exploded somewhat. Saxo Bank, for example, produces a set of ‘outrageous’ predictions, which are always interesting, and I have pasted a list of all the various papers that may be useful at the bottom of this post. (with credit and thanks to Anthony Cheung and Chris Skinner for sharing links to many of the papers).

I have highlighted, in Bold and with ***, those I found particularly interesting and more digestible… and if you want to join in a conversation on this I have also added them on the RO-AR.com Discord Server, you are welcome to join, access here.

2023 optimism

I am really trying to stay fairly optimistic for 2023, although looking through the various papers this has been hard. Let’s just say the outlook is not great, economic recession, global conflict, and a run-on from the worsening situation in 2022 seemed to dominate, albeit with some interesting bright spots in tech and data.

So, I am not going to make predictions this year. (although the last time I did, in 2020, I did not do too bad although some were way off the mark, so better to stay clear).

Instead, with all this uncertainty, it felt is was worth concentrating on what are some key themes to watch to see how the year will unfold…. thoughts as follows.

Increasing Geo-Political Conflict. The war in Ukraine came as a shock last year, it still continues with seemingly little prospect of ending soon and precipitating economic stress across the globe. In the background, there are now also new geopolitical flash points between China-Taiwan, and Serbia-Kosovo. All of this could put further, and more dramatic stress on supply chains and western economies. Watch carefully. Be prepared and resilient for any changes.

Increasing unemployment and levels of arrears. We are already seeing high levels of inflation, higher energy, and food costs in the economy together with the full impact of interest rate increases still to come. However, despite this, levels of arrears and unemployment have both remained at relatively low levels, for now. There are some small indicators this may be changing though and it is a situation that needs to continue to be monitored closely. Should the situation change and people’s incomes change, the prospect of servicing any debt becomes difficult and levels of financial difficulties will escalate rapidly. Look for small signs to assess the speed this trend is developing.

Political power trumping financial power. With finances stretched, governments are under increasing pressure to raise revenue. New taxes are likely in areas that are politically popular at the expense of those that are financially powerful. Examples already include taxes on empty homes and windfall taxes… We should expect more of this to come, in increasingly diverse forms. This will likely change market dynamics and many an accepted status quo. Watch for these changes to stay ahead, anticipate trends, and adapt.

Embedding Augmented Intelligence (AI). Although generative AI and AI have been around for a while, ChatGPT was a particularly interesting development at the end of last year. The concept of getting the machine to do the heavy lifting really seemed to reach a critical mass… It will be interesting to see, that now we can easily provide more information, at a low cost, what will this mean for our processes (and for customers). By way of example, look what happened in computer coding… we had wide availability of computing power at low cost… yet it didn’t necessarily result in more efficient code, in fact, quite the opposite… will this happen with AI. So, watch for more embedded AI and automated (and maybe verbose) interaction to come. Efficiency and good process design could be a competitive advantage.

New economic business models become the norm. Whatever your views on the current wave of unrest in the economy are it does seem that in some sectors the traditional action of withdrawing labour is having only muted effect compared to the past. On rail strike days – people grumble, and then work from home, postal strike days – we send emails or slack messages, and life goes on. Have changes from the pandemic, reduced their impact? Is there reduced bargaining power as a result? … and, does this actually reflect a wider more fundamental change to the economy itself? With nurses (also on strike) and the NHS is in a different situation, we should watch to see how prolonged the action is by sector/industry… it could be in some ways a comment on our changing economy too. Watch to understand how and when our economy is changing, an indicator for informing future business models

The rise of new industries and consolidation of old ones. With increasing inflation and cost of living, the search for value is on. Old ways of doing things, with their old cost structures and pricing, will be under-pressure and new ways of working/interacting given life. In many ways, this process has already started, but process transformation is going to be back on the agenda and critical to stay ahead. Watch for more market consolidation (economies of scale) and purely digital business models (same or less service for same or less cost), to stay ahead.

Other: Also also don’t write Blockchain, the Metaverse or Twitter off just yet!

It is going to be an interesting year… hopefully a good one… but, watch closely to see. Welcome back, everyone.

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If you are looking for a good summary of expected developments for 2023 in Credit and Collections, Kevin Still’s paper*** is a good place to start. Recommended.

All the other links are below.

• Accenture***
• Alverez & Marsal***
• Andreessen Horowitz
• Apollo Global Management, Inc.
• Arca Funds
• Bank of America
• Barclays
• Binance
• BlackRock***
• Bloomberg
• BNP Paribas
• BNY Mellon
• Citi
• Coinbase
• CoinDesk
• Cointelegraph
• Credit Suisse
• Crypto.com
• Deloitte***
• Delphi Digital
• Deutsche Bank
• Ernst and Young***
• Fidelity International
• Forbes
• Gartner***
• Goldman Sachs
• HSBC
• Huobi Research
• ING***
• J.P. Morgan
• Lazard
• Messari
• Morgan Stanley
• NatWest
• New Order DAO
• Pantera Capital
• PwC
• Saxo Bank***
• UBS
• VanEck
• Wells Fargo

As the clock ticks over to 2023 goal setting season starts… or at least time for some new year resolutions. So… what do we all want to achieve this year?

Outside regular personal resolutions… going to the gym, losing a few pounds and being brave enough to wear those jazzy socks you were given with smart casual business dress… how should we think about what else we should add to our lists?

Reflections with friends

The holidays is always a busy time, meeting family, friends and old colleagues. Between catching up, laughing together, and eating mince pies, I was also reminded how I used to think about this too.

We all have people we admire or look up to. This may be for something they achieved, how they behaved or just how they always seemed to breeze through things you found, well much more difficult.

Maybe it is just the latent scientist in me, but by carefully listening and taking a reductionist approach, I would always try to think about what exactly these qualities were and the behaviours at their core.

Later, on being presented with a challenge, I would think… how would they approach this problem, decision or task… imagining them in my shoes and tugging heavily on their qualities for inspiration. It really did work and always helped with new perspectives to solve issues.

Getting a refreshed by going back

However, in getting older, busier and maybe spending more time looking around the corporate ladder than going up, it is easy to forget about all this and just concentrate on the day to day.

Yet, with a bit of a shake, I realised this is still important and there is much to learn, from people I admire. Looking back can sometimes be as refreshing as looking forward.

So this year behavioural goals are back on the list…

• Listen, watch and understand more
• Working with people is always more powerful that working alone – do that more
• Connect on a human level – people are people and we are all similar in many ways
• Reach out and be inclusive, meet new people – you never know
• Think long-term – investing is just as important, if not more so, than short-term wins
• Be decisive, always respectful and business-like, but decisive when needed
• Make decisions on facts and data, rather than opinion – try to understand the bigger picture and what is really happening

… and by picking a few folks to admire, and emulating some of their behaviours, 2023 can hopefully be a year of learning a few new things… and one that can be reciprocated by helping people back too.

Happy new year everyone.

In this period between Christmas and New Year, it is always interesting, albeit maybe a little self-indulgent but ’tis the season, to look a little in the rearview mirror over the year that was.

So here are some of the themes and stories that you have found most interesting* in 2022.

Freezers and Financial difficulties – I am not quite sure why this headline caught the imagination but somehow it did and reflected on the small observations that we can make, even whilst shopping at Tesco and what this means for the wider economy. This time the state of the economy and the increasing stress that consumers are under, shown in a behavioral change. Post here

Ukraine war – This started less than a year ago, is still continuing. The invasion was shocking, still is today and has changed the global economy, not least with energy pricing. Let’s hope this resolves soon. Post here

Energy prices – Linked to the war in Ukraine. With much of our lives based around energy – food production, heating, and transport – this has been a dominant theme. It is now also impacting us with inflation too. There is some hope this will moderate in 2023, however, the next couple of months over winter in the northern hemisphere are going to no doubt be a challenge for many. Something to continue to watch closely. Post here

Digital Cultural changes – A switch to largely digital processes has been continuing to build. How we interact and build relationships with customers is clearly changing and there is plenty of development in this space too. More here

Digital Contact channel effectiveness – Digital contact, a key theme throughout the pandemic, picked up momentum and continued into 2022. We ran a survey on digital collections and how this can be optimized.. Some interesting themes on digital channels moving up the rankings, although telephony is still not finished. Post here… (feel free to complete the survey for the results 🙂 )

Digital Affordability assessment – Some of the latest areas of development in capturing I&E data also generated much interest…. A theme that will likely continue into 2023 no doubt. More here

Customer Journey Orchestration – Now we have all these channels thoughts are turning to how to fit them all together. Understanding how they interact with each other and across the customer journey is going to be important. This is a theme I would expect to be built upon next year. More here

MaPS announcement on Debt Advice funding – This announcement came as a bit of a surprise and as it changes future funding for Debt advice. It will likely have implications for the structure of the free debt advice sector in the UK as this rollout. One to watch closely next year. More here.

Income Maximisation – There is only so much trimming of expenses that can be done sometimes, and you have to look at the Income side of the equation in the I&E. Income Maximisation (to maximise benefits, and it is suprising how many people are actually eligible for support) is a key and growing theme in many sectors, now and likely into next year. More here.

Machine Learning – Still of interest. As our access to data increases is, so does our ability to process and usefully interpret the data. It’s also fascinating how techniques from other disciplines can be used in Collections… More here

Open Banking – A hot topic in previous years, it really felt like this is an area that started to mature and be adopted more widely this year. Areas such as payments and VRP seem to be taking off and really embedding financial payments into processes. More here

Phew, what a year… although definitely some common themes… What does all this mean for 2023… something to think about this week.

Have a good week everyone.

* with apologies to those posted more recently… some great stories here too including

• The growing needs around debt advice
• Is it time to look again at pre-arrears again?
• The end of telephone calls – developments in chat and messaging
• The limits of digital collections – what is the best approach for implementation

And, of course, all other articles and opinion pieces too.