Strategy, Resilience and uncertainty…

The panel, made up of representatives from Natwest, Virgin Money, Shawbrook and Intrum, said there has been a rise in customers needing support but not yet the flood of cases that many people anticipate.

“There has been a steady increase in the number of customers needing support and a slight increase in roll rates,” said Nick Royston, Senior Collections Strategy Manager for Virgin Money. “We’re anticipating a much longer tail to this, especially as mortgage and rent rises come through.”

“Our DCAs are ready for a tsunami but we haven’t seen that,” said Emma Winter, Natwest Debt Sale and Unsecured Customer Journey Developer. She added that the business has been able to introduce a new product with a slight positive change in risk appetite.

Meanwhile, Leighton Grew, Director of Recoveries and Collections for Shawbrook, agreed that the bank has not seen a big spike in arrears. “Overall it’s still a pretty positive picture. Customers have been resilient.” However, he said:

We’ve spent a lot of time enhancing our early warning indicators to make sure we can identify signs of distress early and in turn provide the right support for our customers. We have seen an increase in the number of customers being late with their payment but in the main they are still managing to make up that payment before the next payment falls due.

Scaling up for increasing collections

Gavin Flynn, Intrum’s Operations Director, said collections teams are always ready for the tsunami, with the ability to scale up or down as needed.

We need to focus on the customer and make sure they’re looked after in the process, but also our employee. Their jobs are becoming tougher and tougher each day.”

The panel discussed forbearance and the need to act at the right time for customers. Royston said when it comes to property it can be difficult for people to understand when to let go. “We need to look at how to support customers to realise that a sale is inevitable or sadly, in some cases, where we will have to repossess,” he said.

Digital approach preferred by younger customers

Winter added that Natwest is looking at the pre and early-arrears process, using self-serve and digital options to complement traditional communications. “We have seen an increase in full and final settlements, average plans and the stick rate of those plans for those using self-serve,” she said. “With a shift in the age of consumers coming into collections, we will see more of that – generation Z generally don’t want to have those conversations on the phone.”

Meanwhile, Grew said the business has invested in resources in anticipation of higher arrears levels on the back of rising interest rates, any spare capacity in the interim is being used to support other areas of the business. He also said outsourcing is an important part of the process.

You need to appreciate what you can do well internally and what others can do better than you. However, what you can’t do is outsource your responsibilities.