It seems like lots of people have come down with COVID this week, probably more than I have noticed before. Maybe this was, just my psychological bias, mind you, as I also came up double red on the Lateral Flow Test too (the Baader-Meinhof phenomenon I believe, if you like this stuff).

It has all been a bit of a bother. I was planning on being at Credit Week, had a full day session booked on Thursday, client work and video recording on Friday… everything now cancelled.

And, since the start of the week, I have now been shuffled off to the spare room, isolating to try to avoid infecting anyone else, and seemingly only able to slink out of the shadows when everyone is out of the house.

The good news to report though is that the LFT tests really do seem to work. An extra line appeared, was really clear, so at least we know. And, so now I am stuck in the room, waiting to feel better and the line to disappear. A new sense of jeopardy every morning as to whether I go outside to play

So far I seem to have been lucky healthwise, some fever, sore throat, slight cough, but manageable, albeit tired. The big problem I have noticed though is psychological, boredom.

Remote working and student living – again

Is it we are so used to rushing around these days or maybe just the consequence of working remotely that it seemed all a little too easy to slip into pecking away at a few emails here, having the odd conversation there, a quick meeting and before you know it 3/4 of a day had passed, and the opportunity to get the rest you now realized you needed.

Not that I have seemed to have learnt… gradually over the week, the spare room has acquired a table, the laptop, phone chargers… all I need now is a kettle, fridge and pot noodles and I will be back to full student living… and I am really not sure that is a good thing.

Affordability data

Still, the little extra time I was given back did allow me to follow the UK chancellor’s (finance minister) spring statement, primarily focused on softening the blow from the expected affordability crisis.

5p off fuel duty and changes to tax limits were the headlines. With tax cuts being money in the pocket for earners, the fuel cost reduction was to help with transport, but with the thinking, this will also flow through to other items using energy, such as food.

All of this got me thinking about the data again (not a surprise I know). What do people spend money on, how much exactly and does this change by how much you earn?

Unsurprisingly the data is available on the ONS website, and with time on my hands, I was able to look at it via the interactive graphic below.

What is clear (to my interpretation, at least from this data) is if you are in the lower 30-40% of income earners, you are having to top up your income with benefits or debt to balance the books.

And, as prices go up, assuming income or benefits does not, this gap becomes wider.

So the question from the changes we have now is… are the measures sufficient to moderate this impact and if not (and I fear not) what will happen next and what do we need to do to help?

Playing our part to help?

Outside of regular cost efficiency (to help more customers), forbearance plans and options (for support), being proactive and having some honest conversations with customers about products, affordability, and outcomes is going to be key… this could be a big shock for many any we may need to think outside of other existing toolsets to help… including addressing some of these bigger questions.

… so maybe the consumer duty is arriving in the nick of time… and getting ready now will help!

Hopefully, I will be back to full strength next week… for everyone else stay safe and if you are also off ill, get well soon.

Have a good weekend (in the sun) everyone.

One of the many benefits of attending talks, and conferences I realized this week, is the connections they make. Discussions, sometimes in completely different areas, can magically join up to spark new ideas and insights. Sometimes in unexpected ways.

Conference catch up

As an example this weekend I have been catching up on the New Scientist Live discussions from Manchester the week before (I admit it, I do like a bit of science discussion).

One talk was at the minuscule level – the Muon g-2 experiment at Fermilab. New results could point to the discovery of new physics which could explain some of the missing matter in the universe…

The other was on a huge scale – black holes. It seems that Black holes, mathematically at least, could be portals to infinite spaces within them. An entire additional universe could be inside one apparently.

So my mind was buzzing, are we all living inside a black hole, infinitely devisable in space and time, and does this now explain some of the missing matter in the universe?…. Somehow, tantalizingly, the two talks seemed linked…

Cross-Pollination

Now, I know people much brighter than me are working on this topic already (it is a pretty big topic in Physics already), but in my own universe, it did serve to illustrate the value of listening to multiple talks, on multiple topics, back to back in a forum such as a conference. It can really help to spark ideas and new ways of understanding.

This week of course is also Credit Week, with the Credit Summit on Wednesday. The following week (and in a shameless plug), we have the Online Lending Technologies Think Tank. So we are not short for similar events to spark our imagination.

The last few days I have been debating whether to go on Wednesday (££), although I will, of course, be there next week at the Credit Connect event and I am thinking about how can we shake up the conversations to spark ideas for folks. Any extra ideas, topics, or suggestions, let me know in the comments below.

Tangential ideas

A related thought on this topic was from a comment made in a conversation about Income & Expenditure, on contact rates.

Outside some I&E capture tech, which I did find pretty impressive on many levels, the comment was made in passing, that contact attempts are about how you spark interest in the customer in speaking with you.

I know we know this, but it also sounded very much like marketing, which set me thinking about which marketing techniques could we also use to trigger customers to engage and talk with us?

The collections solutions pipeline

Collections can be considered a sales and marketing process, We have heard this before. But maybe it could also, more accurately, be broken down as follows

• Getting in contact – a marketing process, to generate interest in engaging
• Finding the right support solution – a sales process to help customers navigate support solutions
• An operational fulfilment process to make sure the solution selected actually works well.

So what can we learn, from these established processes, from other industries?… digital marketing techniques, the use of data, A/B testing, message personalization, SPIN Selling, Conceptual Selling, Customer-Centric Selling, Lean Management, Six Sigma, Agile… we don’t necessarily have to re-invent the wheel, there is a lot there already.

Well, that solves my reading list for next week… certainly something to think about.

Maybe see some of you on Wednesday… but certainly do sign up for the following week!

Have a good week everyone.

(Post note, a final comment on affordability crisis. Martin Lewis has just said this is going to be an absolute rather than relative poverty issue in the UK. I share his concerns on the potential size of the impact we could see and while his point was it could be so significant we may run out of tools to help, the government needs to step in, we also do need to get ready to help support customers, maybe at volume… our processes need to be robust and ready and we need to prepare)

With the war in Ukraine still ongoing, sanctions have continued to increase over the last week, all to try to stop the fighting.

There are designed to be hard-hitting for Russia, however, none of this of course is without consequence here. This week I thought I would take a look at this, what this could mean for us and how we should get ready.

Taking a step back

Only 2 weeks ago, before all this started, there was already plenty of concern about a potential cost of living crisis in the UK.

Natural gas prices were spiking due to winter demand and low supply over the winter and this had already had fallout in the energy sector. Many energy suppliers ceased trading, forcing customers onto standard tariffs… standard tariffs that are due to increase by 53% for the average household in April.

A 53% increase in energy costs is significant for most people, many businesses and adds further stress to cash flow. Cash flow that may already be stretched by the COVID pandemic and supply chain issues, both globally and due to Brexit.

And now Ukraine

Against all this backdrop, we now have the invasion of Ukraine, with associated sanctions, which is now adding a further shock to the system.

Natural gas, the source of much of the heating and electricity generation in the UK has hit another record high. It is now 6-7x the long-run average, much of which has yet to be factored into the price caps domestically.

Wheat, a proxy for base food costs, is not much better, with so much production for Europe from Ukraine and Russia, future supply shortages has forced the price to record highs too… and of course, energy is involved in food production and distribution too… food costs will be up.

And, whilst these are scary graphs, I feel I do need to point out that all of this is a lot less scary than what the folks in Ukraine are facing these days… what we really need is for the invasion and fighting to stop as soon as possible.

Economic impacts

This being said, and should nothing change, we also need to prepare to manage significant impacts should this flow through to the global economy.

Food shortage may lead to civil unrest, energy shortages to further conflict and extended sanctions to a more permanent dislocation of the global economy and its integrated supply chains. All of this adds to the inflationary cycle, pushing prices up, companies out of business and affordability down, beyond what we have seen through the COVID pandemic.

In collections/receivable processes, this could result in a massive wave of arrears volumes flowing through, as customers struggle to make existing payments and commitments.

What to think about now?

There is of course the possibility that governments will step in to help mitigate some of this, and the situation may improve as quickly as it seems to have arisen.

However, should nothing change, by the end of the summer we could start to see this impact and now is the time to get prepared for increased volumes in collections… I have added some thoughts on this below.

• Use digital processes to reduce the cost of simple or repetitive tasks. Lean on digital transformation to free up resource for use elsewhere in more complex processes (such as handling difficult customer situations)
• Consider investing now, don’t delay. If inflation takes hold and prices do increase, you are better paying for infrastructure now, rather than waiting when we are in the middle of a crisis and may not have the revenue to afford it.
• Understand and plan your capacity plan. Post-digital transformation, understand and plan your capacity requirements. How will these be met? What will trigger hiring, What is the ramp up time? and how is this impacted by different scenarios? Stress test your plans
• Review your financial difficulty and vulnerable policies. With so many customers in potentially difficult situations make sure you have your forbearance tools, procedures and vulnerable customer management processs in place to help support. A customer helped here, if done well, can afterall be a customer for life.
• Don’t forget reporting and control. Invest in monitoring and MI. This is critical to understand when something has changes, when to trigger your plan, map impacts on your business and its profitability. Early development here can provide early insight and help avoid an awful lot of difficult decisions later on.
• Lastly, remember your team. Your employees may also go through a hard time with this personally too. Have a plan, be proactive and make sure they are supported too. You will need all the help you can get if things get tough.

With so much going on, it can sometimes be hard to think proactively and take control. Just waiting to see what happens seems easier, but can lose you time and cost more money (as we saw with those that were not ready with the flexibility needed during the early days of the COVID pandemic).

It has likely been at least 40 years, if not longer, that we have ever seen price increases as we have in the last 2 weeks. Some of this speaks to our global interconnectedness but also points to the importance of being prepared. A bit of thought now, while we have time, for modest cost, could save an awful lot of effort later on.

In the meantime, if you, like me, are watching the news and twitter constantly, let’s just hope the conflict is over soon and everyone gets to go safely home soon.