A time to collect our thoughts

Guest blog by Chantal Constable – Vice President Retail Banking and Payments in CGI’s banking sector business

I’m sure we’ve all become accustomed to hearing the word ‘unprecedented’ since our world changed in March, and life in the UK became unrecognisable. Covid-19 has undoubtedly hit the UK economy hard and fast, and since then the banking industry has been forced to respond. The lack of physical access to a branch network has been a challenge, and moving full call centre teams and infrastructure to a work from home environment (virtually overnight) has caused volume and access issues. Nonetheless, the industry has been responding, and within that response there are green shoots of recovery. This recovery could signal not only a new normal but new possibilities for financial services in the UK. If Steve Jobs was the single person to transform the access to a digital revolution, Covid-19 has driven the real digital usage transformation.

Digital Webchat has lightened the load on customer service phone lines, and contactless payment has enabled cashless transactions. SMEs, start-ups and even the great British pub have all moved to digital sales and delivery offerings, securing customer loyalty. Lenders have been well-positioned to rapidly extend self-service capabilities from a digital perspective, using their underlying technology and cloud adoptions strategies. Financial services providers have been quick to respond by implementing new Covid-19 strategies as ’new normal’ customers enter the collections cycle. Financially astute (previously financially secure) customers are finding themselves furloughed, redundant or in an ever-changing cycle of family care responsibility. In the full knowledge of their future inability to service credit arrangements, these ‘new normal’ customers are proactively contacting lenders to pre-warn them of the likelihood they will enter collections for potentially the first time. This proactive communication has to be fed into the customer contact strategy, and the need for flexibility in managing pre-arrears strategies inside collections applications is coming to the fore.

Having responded to the crisis over the last two months, many banks are now looking toward the future, where in a couple of months ‘responding’ will have become BAU and the strategy for how to ‘rebound’ will start. Operating capacity will be key, and it’s clear that one financial impact of the current crisis will be a continued growth in collections and recoveries. Banks will need to look at operating efficiencies, automation, and decision tooling to enable them to do more, and serve more customers with their current operational teams.

Vulnerability will be critical in the collections treatment strategy set. These ‘new normal’ customers, entering collections for the first time, may well return back to financial health as measures ease, whereas new vulnerabilities due to the pandemic will continue to grow and change. How long will the mortgage holidays last, and how capable will these customers be to start repayments in the near future? Only time will tell…

One thing is for sure, there will be no going back. Instead the industry must move forward. The opportunity to reinvent how we service customers in collections is a crucial part of the banking customer experience. How we treat people during this current crisis is how we will be remembered, and there is nowhere this is more pertinent than in banking. How banks treat those now entering collections has the ability to define customer loyalty and brand reputation, and those banks who get it right at this critical time will reinvent their customer base and service offerings for the future.

For further information, contact [email protected] and quote: Pro-Manchester/CGI