The novel coronavirus pandemic started very much as a healthcare crisis, but has evolved over the past six months into an economic crisis. In the UK alone we are seeing millions of jobs at risk, businesses teetering on the edge, and whole industries such as travel on the verge of collapse. This measure, along with other interventions by the government, the FCA and lenders, in response to the Covid-19 crisis, will come to an end much sooner than the wider economic crisis, creating a raft of new challenges for the financial services sector.
Increased numbers of accounts with debt balances
Millions of homeowners are taking a “payment holiday” from their mortgage, typically £755 a month. These high volumes of customers taking payment holidays will lead to increased debt to collect in the coming months and years, and represent a significant percentage of the overall mortgage book, far more than under usual circumstances.
Supporting customers in a range of new circumstances
Outsourcing operational processes from a trusted partner with the skills and experiences to support customers through a disruptive and unexpected period of change, will be key to retaining brand satisfaction, loyalty and contribute to customer retention.
Long-term impacts of short-term Covid-19 measures
Payment holidays are expected to be in place for the next few months but the consequences and impacts of payment holidays will be felt by customers and firms long after. Solutions are required to help firms in the long-term as well as the immediate term.
Increased operational demand
Banks and Building Societies have expressed concerns relating to the need to up-weight existing operational teams to handle increased demand. Recruiting, training, retaining and managing resources across the arrears life-cycle from simple processing to complex arrears, vulnerable customer and litigation matters, will undoubtedly place increased strain on firms.
Short timelines to stand-up solutions
There is a great urgency for such increased operational resource. These solutions require support from partners with rapid delivery models including, where appropriate, low- and no-integration requirements. It is imperative that, along with a speedy response, those solutions deliver good customer outcomes and reduce the risk of future remediation.
Choosing the right arrears and collections partner to help
Lenders will be under pressure to run expedited procurement and supplier selection processes. Near-term challenges will drive firms to look for tactical solutions from trusted partners. Firms need reassurance from suppliers that their needs will be met, for the near term and longer term.
See how Target can help lenders meet additional demand especially with collections and arrears, throughout the Covid-19 crisis and beyond.