Keynote – A Holistic view of Credit Management Across the UK and Europe

Rubio highlighted figures showing that stage two loans – those pre-default – have doubled since 2019 and now account for 40% of the total loans in Europe.

He added that research shows how perilous the situation is for consumers, revealing early figures from the 2023 European Consumer Payment Report. “People are actively missing payments, 50% of European consumers have one month or less of savings, 20% have no savings and 40-50% are taking out new credit to fill the gap,” he said.

I don’t think we’ve even felt the impact of interest rates yet, which will impact mortgages and compound the pressure on consumers. Inflation remains high, the cost of borrowing has doubled and real wages remain flat. We want to deal with impairment but also help avoid loans getting to that stage. Clients are increasingly asking us to get involved in under-performing or ‘unlikely to pay’ accounts pre-collections.

Rubio was optimistic about the opportunity to make a difference. Given the provisioning banks must make for impaired loans, he said reducing the cost of risk by one basis point would generate 1.2bn euro for lenders, and that it is possible to improve performance and reduce costs by outsourcing.

He also welcomed new regulation such as Consumer Duty and the Non- performing Loans (NPL) Directive.

“Almost all of our customers want to pay. They are in a difficult situation and we need to provide them with a way back. 5.2 million customers became debt free with Intrum last year. These are people who were effectively excluded from the financial system and can reintegrate into society. We want to help shape the regulatory environment and help the system function.”

Rubio added that technology will play an increasing role in the collections process in future. Intrum’s recent acquisition of AI business Ophelos is part of that trend. 

Demographics are changing and lots of debt is coming about digitally – we need to reflect this in our activities.