In Focus Consumer Credit


Left-right: Marie Moffatt; Matt Washington; Paddy Gilling; Raj Gill; Stuart Sykes >>


responsive and granular digital self- service collections.


There is a real opportunity to make this


the default way for customers to resolve their own arrears in a collaborative way. If you can do that effectively it will be


possible to move from agent to account ratios of hundreds to one to many thousands to one providing a better experience for everyone involved.


LH:We have seen, especially since the start of the pandemic, a significant number of customers choosing to self-serve. When we break this down into the ‘can pays’, ‘can’t pays’, and ‘won’t pays’, we find that all the can pays decided to deal with us digitally, they do not call us anymore, they do not deal with us over the telephone, they use text or e-mail or any of the other omnichannel services that we offer through our online portal to set up payment plans and so on. We find that we spend more time now on the can’t pays – our average call time has gone up and the repayment kept-rate during the pandemic. So we have seen a large increase in consumers paying us, and I think that is largely down to the fact that we have more time now to deal with the can’t pays and won’t pays. So we are certainly looking to improve our digital aspect. I have seen firms out there that really how two or three collectors dealing with such a large book because their digital platforms are brilliant. I think that is the way to move as we look into next year. I know that a few people have said it today, but we do not know what is going to happen and this digital method, the new world we have all moved into, has allowed us to flag the accounts that are struggling with Covid and that will help us to make better decisions once the furlough scheme finishes. I do think that if you do not focus on


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SS: This is where the cohort-change comes in as well. When you look across our customer base, the £2500 maximum that you could get on furlough was nowhere near enough compared to what many people were earning, many were taking a 50% or 60% pay cut by being on furlough. This has a massive knock- on affect in terms of the cohort dynamic of those customers who have never previously been in financial difficulty. If it is over a couple or three months, the


conscientious ones will have that in savings. People have now burnt through that, which means that many people who you would not expect to be anywhere near the collections world are now slipping in. So we do need to look at the high earners who we would never even consider normally and just assume that they will crack on as normal. So we need to start looking at our digital


offerings and the risk-dynamics in our books to say that, where we normally look, we might need to turn our heads somewhere else.


CL: I doubt that a negative interest rate will filter through too much on the consumer side, it is already quite liquid there. The whole issue of consumer confidence is going to be key, and we are all obviously braced for bad circumstances to come. The OBR report said there would be a 4%


fall in consumer spend this year, but they were predicting an 8% rise next year and a 11% rise in 2022, so I thought it was interesting how they profiled things moving forward. If there is an upside to this, it is that there


has been a massive wall of money that the government has dropped on the British economy, at various different levels, and that is quite a positive thing.


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your digital means of collections now, then you are really going to struggle.


If you think about it, it was approaching


£400bn, which is the equivalent of the output of Ireland or Norway that has been dropped into the British economy; plus there is another £150bn of QE. So, in terms of money availability the


money is there, but it is all to do with this consumer confidence question. I think that the psychology of the vaccine is the thing to follow the quickest, and what the pace of recovery will be. I think there is lot of pent-up demand


and I do think that the point made about how people have not been able to use their discretionary spending is a massive thing. The number of people who will want a Summer holiday, once they are inoculated, will be enormous. In terms of debt collection agencies, if we


are talking about the need to understand consumer psychology, then there is a strong case that the personal relationship with the customer is going to be very important, and that is certainly the track record of many firms.


PG: I think that everyone is frustrated from being locked in their houses for nine months and that may be played out as the vaccine becomes available. I think we got a small glimpse of that


with the Eat Out To Help Out scheme, which tapped into a short-term boom where everyone wants to go out and spend because they have not been able to do so. My concern is that this could create a double- dip recession. Things could look better in the short term,


but then they could fall off an even greater cliff and that can that has been kicked down the road by furlough and government relief schemes gets kicked a little further, but the outcome becomes a little bit worse. CCR


January 2021


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