In the face of a relentless cost-of-living crisis, consumers' disposable income continues to be stretched. The Bank of England has increased rates 14 times since December 2021, driving up borrowing costs for millions. And with wages trailing behind inflation, the financial strain isn't letting up any time soon. The mortgage arrears statistics paint a grim picture, indicating a concerning rise in homeowner mortgages in arrears. With 800,000 households set to roll off teaser rate deals in the second half of this year, with a further 1.6mn due next year, the impact of higher rate products is set to create more financial pressure. 

Lenders must explore innovative solutions that empower consumers to navigate these challenges more effectively. One such solution is the implementation of customer-centric micro journeys for debt collection.

The need for a new approach

According to a report by, the number of homeowner mortgages in arrears increased by one per cent in the fourth quarter of 2022 compared to the previous year. As the situation intensifies, traditional approaches to debt collection prove less effective, especially given that only a mere 2% of unsolicited outbound calls result in successful customer engagement. There's a pressing need for a self-serve approach that empowers customers to manage their debt while offering relevant and supportive information.

How micro journeys create significant benefits

To address these challenges head-on, we developed a customer-centric, self-serve solution, allowing targeted micro interactions at critical points in the user journey. This approach focuses on engaging customers at the right time, using their current account status as a trigger to send personalised notifications that prompt them to take proactive actions. By facilitating digital engagement, customers can interact according to their preferences while maintaining secure access around the clock.

This flexible approach empowers customers with control over their financial journey and equips them with the information needed to make informed decisions. Additionally, the solution emphasises simplicity, relevance, and customer-driven outcomes, while still offering the option for direct contact if desired.

Key engagement journeys for managing arrears

Implementing micro journeys revolutionises how arrears are managed. These smaller but no less significant elements of the customer journey, which may not traditionally be digital, now become streamlined and accessible. Essential engagement journeys include:

  • Easy ID and Verification: Simplifying the customer identification process.
  • View Account Summary: Providing a comprehensive overview before taking action.
  • Make a Payment: Offering instant one-time payment options.
  • 30 Day Hold: Enabling customers to defer payments if necessary.
  • Assess Affordability and Payment Plans: Helping customers navigate repayment options.

Benefits and strategy alignment

This innovative approach aligns seamlessly with the company's overarching strategy. At Target Group, we focus on delivering exceptional customer experiences that meet regulatory obligations and exceed expectations. By implementing this solution for a key client, we addressed the financial vulnerabilities of customers and the strain placed on colleagues and operations.

Micro journeys empower customers to manage their accounts at their convenience, leading to increased payment rates through proactive interventions. This approach also results in fewer manual interventions, reduced inbound call centre traffic, and the opportunity to divert resources and expertise to where it adds the most significant value.

Measuring success

The implementation of micro journeys is predicted to deliver an impressive 50% success rate in the customer journey and a 35% increase in collected revenue. The cost of processing payment through the new customer flow journey is just 30% of the cost incurred through traditional call-based payments. This demonstrates not only the financial efficacy of the solution but also its ability to enhance the overall customer experience.

Innovation with smarts and heart

In a landscape marked by economic uncertainties and financial vulnerabilities, innovative solutions are crucial to addressing the pressing challenges consumers face. Micro journeys have emerged as a powerful tool in the debt collection arena, allowing customers to navigate their financial obligations with greater ease and flexibility. By aligning with the company's strategic vision, this customer-centric approach drives positive financial outcomes and transforms how customers interact with their financial responsibilities.

At Target Group, we're on a mission to help organisations deliver the best customer outcomes. Creating solutions which exceed expectations and manage risk, all delivered in a slick, cost-efficient way. We'll do this by combining the latest innovation with outstanding people skills, helping to create customer experiences with the smarts to perform and the heart to care.


Homeowners taking 35-year mortgages up 117 per cent - Mortgage Solutions

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Find out how our innovative micro journeys and customer-centric approach can transform your collections strategy.