The Collections & Recoveries function in many Financial Services business has been working the same way for a long time. When customers find themselves in difficult circumstances, the team reaches out to help them find a way to pay back what they owe. But in 2020, I have been having more and more conversations with Collections professionals that suggest the sector is experiencing a serious shakeup.
We have recently seen a huge increase in requests for Collections Strategy specialists, as companies look to adapt to a difficult Collections landscape. I believe two driving factors are the widespread and ongoing economic impact of the global Coronavirus pandemic and the regulatory focus on the treatment of vulnerable customers. The fallout of the virus has meant many people who would not previously be classified as vulnerable now fall into that status, and customers who were already vulnerable may be in an even more difficult position. Some people will have found their ability to repay loans or pay off credit cards hit by being placed on Furlough and receiving 80% of their usual salary. Others have lost jobs that previously seemed highly secure. Payment holidays have also caused issues – some people took them earlier in the year expecting to return to jobs that have instead let them go.
With the FCA having made vulnerable customers a focus area, organisations need to ensure their Collections approach is treating these customers fairly and not generating complaints. It’s important that Collections Advisors have a very strong understanding of how to work effectively with vulnerable customers, but it’s also crucial that an approach that prioritises and recognises the need of vulnerable customers is embedded throughout the entire Collections & Recoveries division and is part of policies and procedures.
I believe this is why more and more organisations are seeking specialist Collections Strategy talent, to ensure that every part of a business’s Collections process can succeed in the current landscape. They can play a crucial role in translating regulatory requirements and business objectives into working methods for their Collections & Recoveries staff. A dedicated Collections Strategy Manager or Consultant can help to craft a consistent, positive Customer Journey, updating existing operational policies and procedures to make sure the team always delivers the necessary level of service to vulnerable and non-vulnerable customers. This is also a situation where investing in talent now could save a business from much larger problems in future; if mistreatment of vulnerable customers leads to complaints when that topic is under close FCA scrutiny, there’s a risk of damaging repercussions, including Section 166 notices, fines, and the associated deeply harmful negative publicity.
Kind Consultancy has worked with a number of organisations looking for Collections Strategy Managers, on both an interim and permanent basis, to help them meet these challenges. For a confidential conversation about how Kind can assist your Collections function, get in touch on email@example.com or 01216432100.
Lynsey Moore, Director