This year I have forbidden myself from buying any mince pies until December. Those sweet, pastry-encrusted, treats are a particular weakness and one that retailers seem to attempt to tempt me with earlier each year – but far so good, I have remained strong – it is however a strong signal that the end of the year is starting to creep upon us.

There were two stories in particular that caught my eye his week

The first was the FCA proposal to ban debt packagers from earning referral fees. From my conversations this week, it did seem it was broadly welcomed by the industry. The FCA is clearly becoming increasingly assertive and proactive in its stance towards preventing customer harm… and, by joining the dots you have to wonder if this is a reflection and anticipation of future events impacting customers in the lending market.

The other story was what appeared to be a disagreement between Amazon and VISA, whereby Amazon gave notification to customers in the UK that VISA credit cards would no longer be accepted for payment from January 2022… all due to high transaction fees.

Now, this of course may all be positioning (the rates are not all that different) and an agreement will be thrashed out before then, but I was sat wondering if this was yet another symptom of the pandemic and attempts by companies to recover lost margin and revenue.

I have started to see similar behaviour in my own shopping basket recently. It does appear that inflationary pressures are building. Whilst interest rates have not increased in the UK yet, this is now widely expected. Combined with increased fuel cost it is all going to put increasing pressure on the poor consumer.

It is something we clearly need to think about and anticipate in our collections strategies and processes now… modelling these increased costs into affordability templates, working through the impacts on both lending and arrears volume, establishing options for customers.

I know we all really want this to be over, and sometimes if I close my eyes it feels as if it is ending… but headlines such as these could be pointing to it being just the end of the beginning… if the case, now the real work starts… getting ahead is going to be a priority.

So maybe not quite so cheery this week… time for a cup of tea, mince pie to get cracking tomorrow I think.

A bit of a shorter post this week, due to what appears to be more busyness seemingly squeezing the time out of the week. Is anyone else noticing this btw?

I mean lockdown was tough… but with hindsight, it did have the distinct advantage that all of a sudden I seemed to get my weekends back.

There was time to watch a movie, go for a walk, spend quality time with family or just be around the house… all this of course, when I wasn’t cowering behind the sofa afraid of catching something nasty from the supermarket delivery.

Fast forward to today and whilst is it great those old activities have re-appeared, time is just… getting squeezed out. I am finding it hard to still do everything.

Sports activities, meeting friends, commuting, and now even face-to-face meetings. Just how did we manage before? I am at a loss.

What is clear though, we are going to have to find a new balance, or it will be exhausting and we will all start getting burnt out (again).

Remote – hybrid working

This sentiment came up in a global discussion on the collections industry this week too. It was clear that blended working, for the moment at least, is being seen as the preferred, more effective option, maybe it can help in part enable this balance.

Needless to say, this approach is not all rosy. Noises are being made by the FCA about expectations should these (as they see it) temporary arrangements become permanent… and they do not pull their punches.

Firms should be able to prove that the lack of a centralised location or remote working does not or is unlikely to: 

• Affect the firm’s location in the UK, or its ability to meet and continue to meet the threshold conditions for the regulated activities it has or will have permission for – or any equivalent requirements, where these do not apply.
• Reduce the accuracy of the Financial Services (FS) Register for others if, for example, consumers are not able to contact the firm at the principal place of business shown on the FS Register. 
• Affect the ability of the firm to oversee its functions including any outsourced functions. 
• Cause detriment to consumers. 
• Damage the integrity of the market. 
• Increase the risk of financial crime. 
• Reduce competition. 

A firm must also prove that there is satisfactory planning: 

• That there is a plan in place, which has been reviewed before making any temporary arrangements permanent and is reviewed periodically to identify new risks.
• There is appropriate governance and oversight by senior managers under the Senior Managers regime, and committees such as the Board, and by non-executive directors where applicable, and this governance is capable of being maintained. 
• A firm can cascade policies and procedures to reduce any potential for financial crime arising from its working arrangements. 
• An appropriate culture can be put in place and maintained in a remote working environment. 
• Control functions such as risk, compliance and internal audit can carry out their functions unaffected, such as when listening to client calls or reviewing files. 
• The nature, scale and complexity of its activities, or legislation, does not require the presence of an office location. 
• It has the systems and controls, including the necessary IT functionality, to support the above factors being in place, and these systems are robust. 
• It’s considered any data, cyber and security risks, particularly as staff may transport confidential material and laptops more frequently in a hybrid arrangement. 
• It has appropriate record keeping procedures in place. 
• It can meet and continue to meet any specific regulatory requirements, such as call recordings, order and trade surveillance, and consumers being able to access services. 
• The firm has considered the effect on staff, including wellbeing, training and diversity and inclusion matters.
• Where any staff will be working from abroad the firm has considered the operational and legal risks.

This is one to watch closely and something I know Kevin Still from Demsa has been raising… No doubt we will discuss further on this when we get to chat later in the week.

A new role for conferences and meetings

Outside of financial services and servicing, it does however, on balance, feel as if the world is starting to gradually move towards this outlook of a more hybrid-based model of working. For many it is clearly more efficient (esp managers and knowledge workers).

This being said, judging by everyone’s ecstatic reaction on meeting face to face again the other week, there is something intangible that makes meeting in person so rewarding. This is something that clearly is going to be hard for us to give up completely… as humans we just love social interaction too much.

So, maybe this will become the future of conferences… we work remotely most of the time, then meet up, together in large time-efficient meetings, where we can meet many people in a short period of time. It is networking and spending time together without all the frequent traveling. It is an interesting thought, even from an ESG point of view.

On Environmental Social Governance (ESG)

This was a further interesting topic raised last week. As a topic this has been around for a while now, but maybe off the back of COP26, it seemed to bubble to the top of the agenda again, being raised as a point in Manchester.

For the collections industry, we have, for many other reasons already been focused on good customers outcomes.

However, it was an interesting call as to whether we should also wrap this more formally into a wider social and environmental dimension under ESG. Are we doing enough?

Maybe one to think about a bit more this week.

Have a good week everyone.

This week was the Credit and Collections Technology Think Tank and awards, live in Manchester. It was the first event I have been to in what will be now over 2 years. A great event, with of course some interesting insights and observations…

• Working on the train. Concentrating on the screen and not looking out of the window, I had forgotten just how travel sick this can make you. Dizzy, nauseous, hot and cold (not COVID btw, I did test myself again)… I swear it was worse than I remembered.
• Meeting people live in 3D. An interesting experience. People sound the same and of course are the same as on video, but somehow slightly different too. Sometimes, for some reason, it took a second or two for us to recognise each other, even for people I worked with very closely. There must be something subtle in how we process information to recognise people that makes a difference in person vs on video. Of course now we have seen each other it is back to normal, but interesting nevertheless.
• Cities are full of young people these days. I suppose this was always true, and maybe this was just city centre Manchester, but there didn’t seem many people above 40 about. Where did we all go?… maybe they are all happier sitting at home, working remotely and hestitaing commuting into the city? Maybe so, maybe not, but could be an interesting new trend to follow.

Workwise, the reason I was there, there were definitely some interesting, consistent themes that came through.

• Think about impacts across the customer lifecycle. Using data to create positive customer outcomes was frequently discussed. However an outcome is not just an outcome in the moment (eg on a call), but also outcomes are created later, in a week, a month or even years later. All experiences are linked and being able to link outcomes back to root causes earlier in the customer lifecycle can be particularly powerful and beneficial.
• Data sharing. There was some consenus that we do not make enough of common data, across multiple elements in the customer journey. Be it technology applications, internal processes and even external companies too. Contact preferences, activity history and gathered data can all be shared, reducing the amount of wasted time and process rework, re-capturing and validating the same information multiple times.
• Information is valuable. However, this information is intrinsically valuable itself. Companies that have spent time, effort (and money) capturing this data, are clearly going to be loathed to give it away. It could result in them losing potential competitive advatanges. It is an interesting dynamic being set up.
• 100% digital automated processes. There was a general consensus was this cannot happen in full and a human is still needed in many processes. Data can (and should) of course be used to segment and triage who does what, but when all else fails a human to human contact is needed. This is a great source of data and also an outlet valve to find out where automated processes are not working too. Removing, without alternatives, could result in complications.
• Think about new and time series data. There has been lots of technology and data introduced recently and indeed we had plenty already too. Data on how we interact with websites, credit bureau details and how this changes over time, across the customer journey, can all be used to identify vulnerability and affordabilities issues.
• Creating points friction. In a world of frictionless journeys, sometime we also need to create points of friction too. This can be to ensure key messages are seen by customers or even to capture new behavioral data.
• The future view. Finally, there was no real consensus around timing for an increase in arrears volumes, nor on the exact details on the next shock or technology we need to prepare for. There was however consensus that we need to make sure processes are flexible, adpatable so should another shock occur we are able to adapt quickly. With all the new technology implementations the last 1-2 years, rather than overlaying more change we need to ensure we we embed and make the most of what we have already too. There is value there.

All in all an interesting couple of days. Have a good weekend everyone.