Last weekend was of course the Platinum Jubilee in the UK. For those of you not here, there were lots of festivities, sausage rolls, and cake, but amongst this wave of activity, there was also something else rather nice going on. People meeting people.

Sometimes it feels like we live in a very transactional world, even more so with remote working, rushing about trying to meet one deadline or another.

This last weekend, being 4 days, this seemed to somewhat stop again. It was nice to spend some time on a local level, chatting, having a laugh and spending time with friends and neighbours.

As we embark on this weekend, it is something to remember maybe?

And, with all that is going on the news, other items seem to be getting lost. The cost of living crisis and proposed energy rebate was announced did not really seem to be talked about much, as of yet at least.

To remind you, most of us, who are electricity customers (>6months), are going to get a £400 credit applied directly to our accounts in October.

You may think this is a nice little windfall, although it of course will only offset what will likely be another steep hike in the energy price cap in October (for which my energy supplier seems to have already taken preemptive action – doubling direct debit payments, despite it being summer, not needing the lights on, let alone the tumble dryer (what is wrong with the washing line)).

But, more specifically, how will credit work for customers already in arrears, many of whom may also be in financial difficulty?

Now there is an additional £650 payment to support the most vulnerable, with extra winter fuel allowances also being considered, but you may already have a balance outstanding or be on a payment plan – what will happen?

If the credit is merely applied to the account, the balance will simply be applied to the oldest outstanding balance first. The balance will be paid off faster, practically resulting in customers being just less in arrears (with a probably boost for reduced write-offs at a business level too).

Now, this is not to say this is not positive. The money still needs to be paid back at some point and it is financial support.

However, in terms of short-term help for a short-term cost of living crisis, it will hardly touch the sides in terms of immediate help. To do so will require the recast and adjustment of reduced payment plans.

Is this something that will need to put in place to help and will it be? Maybe it is already under discussion, to pass this along to the customer, however expect more to come on this as we start to near the back end of year.

Have a good weekend everyone.

I had an interesting discussion this week on the role of criticism.

Most of us accept that some criticism is part of life. After all a bit of constructive criticism, and making a few mistakes, allows us to be better next time.

It lets us know we need to improve, where to focus, and is most likely the fastest way to get there too.

All very logical and rational. The right thing to say, right?

But, let’s be honest for a minute… do any of us really like being criticised? Do any of us really like giving criticism, especially if it hurts people? Most of us find it much harder than we admit… we are after all social animals, and not fitting in hurts.

There is a fly in my soup

There is of course some validity to this hesitation to complain… upsetting the chef in a restaurant, for example, may not be the best idea right before they are about to provide you your meal?

But logically… why would they get ever upset if the constructive criticism helps them get better?

Of course having poured your heart into making a meal, completing a project, and overcoming significant obstacles to get there, any criticism can always be hard to take… what do they know, they may not even know how to cook!

What is your threshold?

And, if you are doing the criticising… is there, or should there be, a threshold to a complaint… when do I send the food back and make a scene vs not. When should I just grumble under my breath never to eat there again!

In the case of shockingly poor service, interestingly it is the complaint actually lets them know something is wrong, affording an opportunity to recover. In the case of the mediocre service, the silent grumble, business just melts away never to return… in the end who is better off?

A moaning manifesto

So this week I am proposing a manifesto for moaning or at least some rules for healthy complaining.

1. Everyone has the right to complain, just like everyone has the right to an opinion
2. Complaining should be easy, make it quick and easy to give and receive feedback
3. Don’t blame the team, individuals, or company for getting it wrong. It is about focusing to improve, looking forward not back
4. Be specific and objective in any feedback. Support and suggest ideas to help
5. Act on feedback, it is after all an opportunity to recover and engage customers
6. Just because you complain, it doesn’t make you right. You are not wrong, but may not fully understand the complexities or frequency of the event
7. Remain humble, constructive and rest assured your opinion is valued

Easy to say, hard to do? Maybe… but off to give it a whirl.

Have a good week everyone

This week I was lucky enough to attend the SmithNovak NPL Europe conference in London. It was an interesting day of discussion through the debt purchase and servicing processes. The industry, which after what seemed to be seeing a slow down during the pandemic, is clearly now expecting volume to increase.

Feedback from most on the day were expectations that volumes (# of portfolios for sale) will be increasing towards the back end of the year, although the smart comments I felt were pointing to this being slightly later and increasing only in early 2023 (lagged due to the sale process). This will be likely led by Italy and Southern Europe, the UK, with the rest of North-Western Europe then following suit.

Despite the real shock for many economies over the last few years, the sense was this will ultimately probably not be on the same scale as what we saw in 2008. This is in part due to the government support provided, but also interestingly due to the greater awareness and sophistication of creditors, who are pricing and understand the process better too.

Connecting facts

Sometimes at these events, it is also not purely what is said that is interesting, but the connections between the discussion, linkages and reactions that can make you think too. Here are some of my observations.

Artificial Intelligence

AI has frequently been used as a catch-all term for many things from process transformation, data capture, data science, and everything in between. In the AI discussion this was neatly broken down into more discrete blocks I felt.

1. Make sure you have the right data. Use internal data, scan documents, if you need to
2. Structure your data. It can take time, but is a critical step
3. Define your business problem. Businesses are about solving problems for customers and employees. Find areas of pain where you can make improvements, being human-centric is key.
4. Don’t be afraid to redesign the process. Good process design can lead to better outcomes (and easier modeling/data analysis)
5. Build your AI models and make sure you have enough processing power, to build and rebuild. AI is a processing power-intensive process
6. Use data analytics and feedback loops to continue to improve and optimise. It never stops.

All great insight I thought.

Quantum Computing

For the first time, at a work event/conference, I heard the words Quantum Computing used. It was in the context of the processing power needed to run and re-run models.

Processing power is needed and will be increasingly needed, to model with more and more data, doing this faster and repeatedly. (It is a great question to ask any vendor in terms of their capability in this area too).

Quantum computing is of course a potential future solution to enhance computing power.(just like GPUs were in the early days of AI).

The mention of this was a micro-indicator, that this really could be in our future sooner than we think.

COVID culture and masks

With attendees from all over Europe, in the UK, and in a non-restricted COVID environment, our reactions were interesting. Some of us initially had masks on, some quickly discarded and comments of “it’s nice to see everyone’s faces again” were made. I felt it really reflected the mix of local restrictions back in home markets. We are all still adjusting.

Investors vs Servicers

Lastly, sellers, investors, portfolio managers and servicers are of course all part of the NPL chain. They were all represented at the conference.

However, despite being intrinsically linked the culture and focus between the groups came across as really quite different.

On one hand, there was talk of portfolio performance, securitization, ESG, IRR, processes, and techniques to increase returns for investors. It was all very 50,000ft and quite removed from the customer.

Then on the other hand there was a discussion of individual customer situations and the strategies to improve outcomes. It was all much closer to the customer.

There was a cultural gulf between the two perspectives at times I felt.

At the end of the day, all debts do have a customer involved. An originating creditor has lost money, and any recovery still needs to come from the customer, often representing their livelihoods and assets.

We just need to be careful, in the rush to look at returns, not to forget this human element. This is not to change the process per se, maybe more to just make sure we are careful to change the language involved sometimes…

Have a good week everyone