November 13, 2020

Helping customers manage the impact of Covid-19 and financial hardship

The Coronavirus pandemic is presenting organisations with unprecedented challenges, and as unemployment rates continue to rise and thousands of self-employed people struggle to maintain a stable income, there’s been a huge spike in the number of consumers seeking financial help or alternative ways to manage their finances. 

At this year’s Credit Summit our CEO, Colin Brown discussed how the industry can better support consumers with innovative new technology, alongside Kristina Burwood-Ansell, Product Director of Collections & Tracing at Experian. 

Here’s a round-up of the discussion. 

Experian aims to bring data to life and create enhanced opportunities for consumers, businesses and society. Alongside Aryza, who are experienced developers of tried and tested software solutions for financial services and insolvency, the two businesses have developed Experian’s DebtSense, which is part of the Aryza Recover suite of products. 

The tool provides a clear and accurate picture of the user’s affordability, using Open Banking, bureau information and asking the customer simple and easy to follow questions to gain an up to date understanding of their situation. This insight then passes through an intelligent rules engine which automates personalised outcomes for each customer, whether that be extending their payment break, continuing with payments or advising the customer to seek debt help. 

This market leading product has been launched during a turbulent time for consumers, with the impact of Covid-19 forcing millions of people into financial hardship.

Claims for Universal Credit reached 4.2 million in April, 2020, an increase of 40 per cent from March 13, 2020. We’ve also seen an increase in the use of unauthorised overdraft or high cost, short-term loans, which can be detrimental to a person’s financial wellbeing longer term. 

According to the Office of National Statistics, 4.6 million households have an additional £1,076 of arrears and £997 of debt as a result of Covid-19 and collections volumes are set to increase further towards the end of the year.

But what does this mean for the industry?

  • There will certainly be an increase in the number of people seeking help with debt management and it’s likely that we’ll also see a new type of customer emerging. 
  • The industry has a responsibility to identify vulnerable customers and put measures in place to support them. 
  • This is likely to put more pressure on staff and systems and could lead to a heightened risk of fraud. 

What action can lenders and creditors take?

  • Look for tools that help define your forbearance and payment options and identify new types of vulnerability.
  • Amend your credit policies, conduct in-depth I&E assessments and get MI in place to monitor risk. 
  • Adopt new technology to automate analysis and identify worrying trends that require immediate attention early.

As we look ahead to 2021, the ability to respond to these changing market conditions is crucial, with millions of people at risk of falling into debt, it’s likely your collections processes will be put under significant pressure.

Working together, Experian and Aryza hope to reframe the conversation around money management, offering a streamlined, bespoke customer experience that maximises a digital journey.

The Open Banking and bureau driven process reduces application time by up to 80%, taking around 5 minutes to complete, as well as relieving pressure on your contact centre offering digital, SMS and email tools. This also significantly reduces operational overheads by automating much of the process. 

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