Collections: What Comes Next?

Nearly I.2 million people in the UK have made use of Payment Holiday options introduced since the outbreak of the Corona-virus in early spring of 2020. UK Finance has found that approximately 70% of people who took Payment Holidays did not need to for Financial reasons and had done so more as a preventative measure. In isolation, that looks like it means they would be able to pay them back easily. The problem is that as we reach the end of the government-backed furlough scheme and the job market has tightened, with many companies finding themselves not in a position to bring back all their staff, many people are just now entering a period of financial hardship. Suddenly paying back what they owe for their three to six months of Payment Holiday is a lot more difficult.

This will shortly begin to have a knock-on effect on lenders and other Financial Services providers. The work of recovering all the money owed is going to be, for many companies, a large scale project, and one that will require a lot of sensitivity and awareness around vulnerable customers. For customers who were previously designated as vulnerable, questions may be raised about whether they should have been granted Payment Holidays knowing they may be less able to meet later repayments. There will also be many customers who were not classed as vulnerable when they made the decision, but who now find themselves falling within that status and who are unhappy about how that effects their treatment and their ability to access products.

So far, some of the UK’s biggest banks have set aside over £6 billion to cover the expected bad debts arising from individuals and companies who can’t repay loans and mortgages. Figures released by HM Treasury show 1.13 million businesses have been supported by finance from lenders because of Coronavirus. While those loans have been backed by the treasury, theoretically removing risk to lenders, some have raised concerns about the damage that could potentially be done to the reputation and standing of commercial lenders who have to pursue struggling small businesses for repayments.

Anyone working on collections and debt recovery over the coming months will need to be empathetic, active listeners who can carefully handle emotional customers in very difficult situations. That’s a difficult task, and it will be harder still to have these interactions in a way that retains these customers as brand loyal for future business. We know the FCA has made Vulnerable Customers a focus area for this year, so businesses are going to need to handle this well or they could be facing intense regulatory scrutiny. In late July the FCA published new guidance to help firms in this area, which identifies four key drivers for establishing vulnerability: health conditions or illnesses that affect the ability to carry out day to day tasks, a low ability to withstand emotional or financial shocks, recently experiencing a major life event such as bereavement or job loss, and low knowledge or understanding of financial matters and related digital and literacy skills. Clearly, in a still-ongoing global pandemic, many more people than before will sadly fit into those first three categories, whether due to being infected themselves, having lost or being consumed with worry about unwell friends and relatives or because they have lost their job and their previously reliable source of stable income.

We may also need to be concerned about staff who are currently working from home. While remote work is an important way of reducing infections, there are downsides to it that become clear in the face of this kind of highly sensitive, complex work. Staff working from home may not be checking in with colleagues and managers as regularly, and it can lead to them unconsciously relaxing their normally stringent work practices and that’s on top of practical distractions like children and pets which aren’t a factor in the office. All of this could be made worse by the stress of the situation – staff know these are high priority complaints that need to be handled correctly to avoid escalation, and they may feel pressured to quickly make decisions without properly considering the full context of a customer’s situation.

It falls to Senior Managers to make sure that teams are not just aware of vulnerable customers, but that an understanding of vulnerability is built into processes and procedures. Firms may feel that technology-led approaches have set them up to succeed here – and while that may be cost-effective, it could be to the detriment of the customer, both in terms of a lower quality customer experience without that human, emphatic element, but also, some vulnerable customers have that status because they don’t have access to or reasonable understanding of technology.

There are questions to be asked across both retail and commercial lending right now: is your collections capacity ready? Kind Consultancy is in contact with clients across the Financial Services space and we know some lending businesses are already dramatically scaling up their Collections capacity, while others are hoping to move in staff from other parts of the business. However, with Complaints also looking to have a spike in the coming months, organisations may find that their staff who are best prepared to deal with customers in debt and in a difficult situation are stretched to breaking point. Others still have recognised that the staff they do have simply do not have the necessary training, knowledge or experience around vulnerable customers, meaning that especially in a high-pressure time, there’s huge scope for complaints-generating interactions.

Kind Consultancy is already working with a number of firms in this area, with our Kind Agile Solutions service, we have a bench of pre-screened contract talent, including a number of Collections professionals. Our KAS team members are regularly re-screened by Kind to make sure their qualifications are up to date, we make sure they have industry-best knowledge and experience and many of them have worked together before so we can install a full team who t already have a strong team working ethic they’ve built up together, enabling them to truly hit the ground running and rapidly get to grips with the Collections situation in your business. These are professionals who have the knowledge and experience that firms need in order to appropriately take care of customers during this very difficult time.

For a confidential discussion about your Collections resource needs, contact Selena Tye on 01216432100 or e-mail

Read more from Selena on – Lending After the Pandemic: The Long Road Ahead or What Are The Long Term Financial Impacts of a Pandemic?

Governance, Risk & Compliance: This Year’s Big Topics?

In the first few months of the year, there’s always a lot of prognostication in the Governance, Risk & Compliance world about what the year’s big Compliance issues will be. The biggest changes are always ones we don’t see coming and don’t already have a plan for, but here are a few of the trends I think we’ll be talking about across 2019.

With the FinTech world continuing to expand at an explosive rate, we’re going to see a lot of businesses looking to automate as much of their AML and KYC process as possible to keep up with their increasing user bases. The businesses that can get automatic on-boarding systems in place that are easy to use for their customers, as well as efficient and accurate for themselves, will have a huge advantage over their competitors.

More generally, technology will continue to be at the frontline of AML – in the FCA’s financial crime report, almost all of the types of frauds that top firms reported as being most prevalent last year were tech-based, including Vishing, Malware, Hacking and Account Takeovers.

Cryptocurrency is still controversial in the finance world, with some believing it’s the future of the industry and others seeing it as a pipe dream that will never fulfil its promise. For now, though, no one can deny that there is an increasing amount of activity involving crypto, and 2019 will see many governments introduce formal regulation around the technology, with the international intergovernmental organisation FATF planning to release a set of AML standards covering cryptocurrency in June.

Just this month we’ve seen a situation showing how unprepared traditional regulation is for some unique aspects of cryptocurrency with the death of QuadrigaCX’s CEO resulting in users of their exchange losing access to millions of pounds worth of bitcoin. At the time of writing it’s unclear if their customers will ever get their money back, a situation which would be unthinkable for a bank or building society. As crypto continues to try to move away from its controversial early image, it will be interesting to see how the sector reacts to efforts that aim to bring it more in line with traditional finance.

Kind Consultancy maintains a database of industry-leading Governance, Risk & Compliance professionals who are ready to join your organisation in permanent or contract positions to help keep your GRC strategy efficient and up to date. Contact us on 121 643 2100 or e-mail for a discussion of how we can help.

Kind Consultancy Announces Major International Project – Bringing Market-Leading Risk & Compliance Talent to Australia

Kind Consultancy is very proud to announce the commencement of a major international project in partnership with a Big Four consultancy. We’re looking for Manager, Associate Director and Director-Level Consulting professionals in the UK with experience of Enterprise Risk Management and the design and implementation of risk frameworks, who are interested in relocating to Australia. We are also interested to hear from Regulatory Advice specialists at Manager through to Director level.

Our client is committed to getting the very best talent for these crucial roles and as such is willing to support visas and assist with relocation costs. The roles will be based in Sydney and Melbourne and will focus primarily on Financial Services projects, with some possible work in local government as well.

Kind Consultancy Director, Lynsey Moore says that this project “represents a truly life-changing opportunity for the very best Risk & Compliance professionals to do exciting work in one of the most desirable locations in the world”

If you match the above description and you’re interested in relocating to Australia to join one of the global leaders in Risk and Compliance consulting, submit an up-to-date CV to with the subject line ‘Australia Project’.

Preventing Financial Crime

For their 2015/16 Business Plan, the FCA have added financial crime to their list of the top seven risks facing the finance industry, replacing house price growth. It’s not particularly surprising, 2014 was a bad year for high profile, high visibility financial crime cases and the industry is under public and media pressure to do more. In January, the Director General of the National Crime Agency described the British financial system as “particularly attractive” for criminals due to “the high transaction volume, developed financial services industry and [the] political stability of the UK” and that “the involvement of a small minority of complicit, negligent or unwitting professionals in the financial, legal and accountancy sectors, also facilitates money laundering – and unfairly damages the reputation of the large majority of professionals in those sectors.”

The ‘negligent’ and ‘unwitting’ are in the FCA’s firing line, with their Business Plan making repeated mention of the need for “systems and controls” to protect against financial crime, and they promise to implement an enhanced anti-money laundering supervision strategy including continuing their Systemic Anti-Money Laundering Programme which assesses AML and ABC controls at major firms. They’ll also continue to visit smaller firms they believe to be at risk of being exposed to financial crime, a strategy that remains important following their report late last year that found “many small banks and commercial insurance intermediaries fail to effectively manage financial crime risk”. They’re also planning to embed better arrangements and support for whistleblowers and to take a more active role in monitoring pension fraud.

Here at Kind, we’ve partnered with a global risk consultancy firm to help provide financial crime prevention solutions for our clients. If you’re concerned about adapting to new regulations or are worried that your processes may make you susceptible to financial crime, contact me or call the office (on 0121 643 2100) for a more detailed conversation on the solutions we offer and how they can be tailored to suit your needs.

[Sources: 1, 2, 3. Photo by Alan Cleaver]

Lynsey Moore
(This article originally appeared on Lynsey’s LinkedIn)

This post is from 2015 but Financial Crime continues to be a key issue – read our most recent piece on the FCA’s plans for this year and beyond

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