Over recent years there has been a tendency for the general public to lament the decline in personal interaction within the consumer credit industry that has been afforded by technological advances. People have bemoaned branch closures, increased automation, call centres and what has been seen as a ‘computer says no’ approach to affordability assessments and underwriting. In a similar vein, law firms have traditionally resisted too much change and too much reliance on technology, perhaps through fear of the unknown and fear of artificial intelligence and digital efficiencies impinging on their work and income-streams. But the times they are a-changing’.
Perhaps in the debt management/recovery arena more than any other, customers of every age and socio-economic bracket are embracing the flexibility, convenience and impartiality that technological innovations can offer. Money problems are a highly emotive issue and can cause feelings of sensitivity and even embarrassment, not to mention health, well-being and relationship problems if they are not effectively addressed. Enabling people to get their finances under control in the comfort of their own home; with their documents and data to hand; at a time and via a medium that is convenient and comfortable for them, can be an attractive option for customers who are particularly vulnerable or anxious about dealing with banks and lawyers. This is, therefore, a key area in which technology can afford a valuable and important opportunity – helping customers to help themselves.
To debt management and beyond…
Earlier this year Walker Morris announced its partnership with PayPlan – money advice and debt management experts accredited by the Money Advice Service and authorised/regulated by the Financial Conduct Authority and Insolvency Practitioners Association.
The idea behind partnerships such as Walker Morris/PayPlan is simple – by helping customers to manage their finances, find their way out of debt and take back control of their money and their lives, law firms also ensure a positive outcome for their lender clients. Customer engagement is improved and arrears cases would be handled as sensitively as possible and fully in line with lenders’ Treating Customers Fairly (TCF) objectives. The result would be both an improved customer experience and an effective, efficient arms-length debt management and recovery solution.
But it doesn’t stop there. With demonstrable improvements already evident the next step will be to harness new and exciting technological innovations to further improve the customer experience.
Customers, clients and law firms need to get ‘onboard’
With today’s proliferation of smartphones, tablets, apps and other mobile and digital devices, there is no doubt that customers are embracing technological advances. PayPlan’s Peter Munro explains: “65% of customers now choose to work with us digitally rather than by phone. Debt problems can carry a lot of stigma, so if people can get help without having a painful and sometimes embarrassing conversation, they will.“
Customer preferences, along with security and productivity considerations and governmental/regulatory drivers (including Open Banking), are promoting the increased use of technological solutions at every stage of the customer journey.
One key area in which customers, lenders and law firms together can benefit from harnessing new technology is the onboarding process. Engaging customers and understanding their personal and financial circumstances is critical to a law firm delivering the right outcome for its clients and their customers. Completion of an income and expenditure form (I&E) is a key component of that. Companies like Walker Morris and PayPlan are now taking the next step and using secure digital platforms such as Paylink Embark, which provide several benefits including:
- providing a platform which allows the I&E to be completed either by the law firm or the client on a device they choose such as text, email, website or live chat;
- ‘1 touch’ referral to free debt advice transferring the customer and their data;
- and being underpinned by the CRA data and open banking facilities to improve speed of completion and accuracy.
This new technology has seen 20% more customers engage in the I&E process, increasing the volume of customer rehabilitation outcomes and the application of appropriate forbearance measures. It has also delivered a far more efficient process, particularly as customers can channel hop, self-serve or still complete traditionally over the phone.
Looking ahead, this technology will not only assist with onboarding. It can be used to set up and track payment plan arrangements; complete further reviews; send alerts and documentation to customers, and to enable customers to make payments; and more. It can represent a ‘real-time’ digital financial journey for the customer and offer convenience, confidence, flexibility and enhanced financial management and control on an ongoing basis.
From a lender’s perspective, this improved customer experience and increased engagement, along with the availability of touchpoint opportunities for targeted communications (including sophisticated signposting which can even enable lenders to identify and address areas of vulnerability or sensitivity) is a ‘win:win’. It is entirely compatible with TCF and can only help to build more positive relationships with customers in the future.
Embracing technology together
The advantages for customers are clear. So too are the advantages for lenders, who will benefit both directly and indirectly, and both in the short term and long term, from happier and more solvent customers who have appreciated the enhanced, arm’s length, non-judgmental, efficient and compliant experience that a digital debt management platform can offer.
From the law firms’ perspective, technological advances are inevitable and can be invaluable, in terms of efficiency/profitability and customer/client relationship management benefits. The lawyers of today must embrace, rather than fear, the changes and opportunities that technology can afford. They otherwise risk being seen as a product of the past, rather than a professional partner for the future.
Rob Aberdein and Justin Coley, Walker Morris’ Lender Services