In Focus Consumer Credit
Left-right: Denise Crossley; Richard Lax; Laurence Venn; Ian Simpson; Phil Basford >>
understanding right through to the back-end of where digital will sit in the collections environment, then it will still be difficult.
The biggest problem, in encouraging the customer to use the digital facilities that we have, is to get them to look for them. It is growing and getting better, but it will take time.
RK: If you are an online retailer, where you are dealing with customers from the very beginning, then encouraging digital engagement early on is easier. If you are like us and are introduced to the customers through a dealer, you immediately have an issue with trying to establish that digital relationship.
I also agree that the customers can become confused; we have a regulator that insists that we must develop many channels to engage with our customers, however they force us to insert a piece of paper with every arrears letter giving a list of other companies or charities that they should contact if they want help.
DC: I think that the work that the regulators are doing with the credit reference agencies around data will help that, because they want to ensure that consumers’ data is correct, particularly around addresses. They have recently been quoted as saying that, when they do that piece of work, they will be pointing out to consumers that they have a responsibility to ensure that their details are updated with their lenders.
RK: We did some research on people’s use of the various apps that we offer and found that, once a customer enters arrears, the usage of digital channels dropped by 70%.
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For people that want to engage, you need to make sure that you have a good, strong and connected strategy throughout their lifetime with you, but you are still left with the large proportion that do not engage or choose to stop engaging when it really matters, that is, when they are having difficulties.
BC: You cannot have this conversation in a binary way. In 10 years’ time, we will be having this conversation and the vast majority of people will be using these channels and will wonder why on earth we are still using telephones. It is progressive, and different at different parts of the cycle.
But a lot of people need to start by understanding that a predictive dialler, one-way SMS, and IVR are not a digital platform – it is certainly not an ominchannel platform and it will not provide the kind of integrated-channel customer experience that they are looking for.
How can you find a balance between responsible lending and achieving return on investment? ER: It is a very difficult balance to strike. Of course, you have the usual pressure from investors, but you have to completely move that to one side and put the interests of the customer first.
It is important to work on a case-by-case basis with each customer and apply the same guidelines, rules and principles to all. For example, if they are trying to exit or if you want to keep them on their existing interest rates and subsequently it turns out they were not honest about an aspect of their application, or they went down a path they maybe should not have, there is a judgement call to be made.
Collections staff have to make, on a daily basis, fairly tough decisions in order to ensure that we treat customers fairly.
It is important to work on a case-by-case basis with each customer and apply the same guidelines, rules and principles to all
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BC: I think that the UK recoveries industry has changed dramatically. I often say to clients that, if they want to see brilliant customer service, they should go and look at a DCA or a debt purchaser. If you want to see some of the most common industries that occupy The Times 100 Best Employers, then go and look at the same companies. The reason there has been a shrinking of panels is that lenders have said that they will not be responsible for any company that cannot overtly tell them that they will be watertight and safe. We have moved a long way and there is a lot of good activity going on. I do think that there may still be changes if we agree that treating customers fairly does not always mean keeping them. When, as a creditor, I need to offload provision because the balance sheet cannot take it, I will want to put them somewhere that has all the low-cost channels because they give me a good price for them, have all the customer protections in place, and will take them on with the solution that the bank has put in place for them. I think that this process will become smarter and the banks will start to have organisations on their panels that are not even DCAs, they are acquirers. CCR
March 2017
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