One prediction that everyone should see coming
Marcel le Gouais
As January comes to a close, a spate of articles giving forecasts for trends in financial services and collections in 2017 are, fortunately, thinning out.
There is always a clamour at this time of year to coin a phrase early enough that defines the next 12 months in a particular sector or profession.
I have been inundated with these largely inane proclamations that tell everyone in retail financial services and collections what they already know.
My inbox has been inundated with press releases emitting a clear stench of clickbait: ‘10 ways to ensure technology doesn’t leave your business model behind in 2017’, plus variations on this topic, became swiftly tiresome.
There aren’t many people I have spoken to, if any, whose job function revolves around credit risk and collections, that aren’t aware of consumers’ expectations for convenience, rapid response and ease of use of a product, every day, 24/7.
There are even fewer who aren’t thinking about the digitisation of the customer journey, and the automation of data exchange between creditor and customer, along with how the latter can be streamlined and improved.
But what didn’t feature in the list of predictions I received was the highly likely continual focus on debt and mental health – and how to handle non-disclosure when it occurs.
This challenge continues to emerge in disparate bits of information from various regulatory reports and research on complaints.
In one round-up from the Financial Ombudsman Service, summarising themes through its own handling of high volumes of complaints, the ombudsman said it often has to tell businesses that they can’t simply “refuse to deal with anyone” who’s experienced mental health difficulties.
As part of the same round-up, Chris Fitch, research fellow at the Personal Finance Research Centre, Bristol University, pointed out hidden problem which will doubtless be explored further this year.
He highlighted a study by the Money Advice Trust which suggested that for every person who discloses a mental health problem to a financial business, there are two more potential people who will choose not to say anything.
Fitch will in March publish findings of an industry-wide study he has led into the experience of agents who have worked with customers with mental health problems, and serious illnesses.
For now, it seems the Financial Conduct Authority (FCA) is at least recognising that non-disclosure of vulnerability is a live issue for collection agents.
In general terms, across the FCA’s findings from its review of early arrears management in unsecured lending, mainstream credit card companies and banks came out pretty well.
But there was a mixed picture when it came to vulnerable customers. Two firms for example had sold vulnerable accounts contrary to their policy to exclude such accounts from debt sale.
There were other discrepancies between policy and practice, but improvements to early arrears management have been recognised.
Hanging above all this, is the Prime Minister’s move to put mental health and debt on the agenda for her government. She has pledged a review of charges levied by GPs on patients to fill out forms on their debt and mental health problems.
This is just a first move among others that will cascade to financial services. Now there’s a prediction with some substance.