We have shared the severity of impact caused by the covid-19 pandemic. From an economic, and financial perspective, its implications have caused immediate, and lasting impact.
Today, a third of UK workers have suffered an income shock, spurred by over 9 million people being ‘furloughed’ – a number that is still climbing, not reducing. The stark reality is the first 10 days of the lockdown created a bigger impact than any single quarter in the 2008-9 crisis.
There have been multiple measures put in place by the British Government in order to mitigate the impact. Furlough schemes, emergency payment holidays, bounce-back loan scheme (BBLs) and other initiatives have provided a vital lifeline to many consumers and businesses. But we are now at a point where forbearance measures are coming to an end.
Until now, the real-impact hasn’t been seen in the credit market – masked by the many support measures. Over the coming months we will start to see the forecasted trends come through in the real data, with many firms predicting a 40% increase in financially vulnerable customers by the end of summer. We are already seeing rising number of customers struggling; higher levels of indebtedness and credit demand increase for already at-risk customers.
From our industry research we can clearly see firms are preparing their processes – and people – for a surge in collections requirements. There is a strong focus on developing short- and long-term strategies to support customers facing financial hardship. However, few have finalised, or implemented strategies yet.
In the following sections we look at the components within a collections journey. We explore the role of automation, and technology, alongside what tools that can enhance both customer insight, and experience.
Enabling simple contact with customers
Think how you would currently contact a customer who is experiencing financial hardship. You’d call them or ask them to call you. You’d discuss their financial situation to conduct a more detailed in-depth assessment of affordability, income and expenditure, asking them to volunteer information to assess their circumstances.
This approach can be effective but can take up to 45 minutes for a contact centre to complete – resources that are already under strain. The customer may not have an accurate view of their finances and feel uncomfortable about discussing them.
What’s the alternative? You can increase staffing, but this is costly and doesn’t help you manage the spikes in demand that are likely in a volatile market. The solution needs to be able to cope now and be sustainable in the longer term.
Move the conversation onto a digital platform
With 63% of customers preferring digital contact to over the telephone, an interactive self-service channel can be an effective alternative. Of course, it also helps you too – as it reduces the need for manual intervention.
The customer can complete the journey at any time, stop, start and replay – taking control of their finances without needing to speak to your staff. The process can be integrated with external data sources including Credit Bureau and Open Banking, with the customer’s consent, to pre-populate much of the information needed and get an accurate understanding of a customer’s financial situation. This data can be combined with your policy rules and strategies, to guide the logic to make data-driven decisions.
It’s quicker and has much less friction for the customer. Customers can review the information they’ve consented to share, and personalised payment plans are created using insight from this data. You can also provide long-term hardship support, such as extend term of loans or mortgages, change tariff, extend term of phone contract or offer new repayment plans, all within an automated workflow.
You can manage the volume of customers requiring assistance, freeing up your contact centre teams to support those who want to engage with you directly or who need more detailed intervention. With personalised and accurate insights, you can identify those who are financially vulnerable and treat every customer fairly and responsibly, finding the right way to support each customer.
Automation means you can support every customer when they need it
Efficiently managing consumer requirements for assistance will be critical for supporting the increasing numbers of customers in hardship. When you automate the capture of income and expenditure you can personalise the insights for more accurate and reliable assessments. Where required, you can also digitally collect affordability evidence you’re your customers, e.g. payslip, before presenting a long-term arrangement. Debt repayment plans are created and owned by the individual digitally, enabling improved customer experience, satisfaction and engagement.
At Experian we can help you create data-driven, automated hardship conversations. Our simple, digital app includes an intuitive customer experience and useful prompts using Chatbots and Virtual Assistance for help. These incorporate the latest in artificial intelligence and decisioning to help you automate the management of customers with short, as well as long-term financial difficulty.
Our data, decisioning and workflow is combined with a range of digital communication channels to ease the reliance on 1-to-1 human interactions and reduce the pressure on your contact centre.
In addition, we can also automate proactive monitoring of customer situations across the hardship period and reach out to them with further communication or offers.
Harnessing data – in real-time
A combination of Experian’s Bureau data and Open Banking services give an accurate and quick view of a customer’s income and expenditure, to drive fair and sustainable outcomes. Alternatively, customer’s can scan and send their documents in the app. All delivered through one digital platform for automating short and long-term financial difficulty management.
In these difficult times it is essential that clients are best prepared with the right data and tools to manage the complex changes in customer circumstances effectively. Let us help you confidently manage unexpected customer demands by automating complex financial difficulty processes by creating data-driven automated hardship conversations.
We’ve just announced that Experian has partnered with BNP Paribas Personal Finance and Aryza to help people who have been left in financial difficulty by the Covid-19 pandemic. Experian’s Open Banking technology is powering the solution, which allows BNP Paribas’ customers to instantly get a clear picture of their financial situation, at any time of day.
Read our collections paper here to learn more.