Consumers turn to humans over digital when facing debt problems

Digital tools are transforming customer service across every sector, but don’t replace the value of human empathy when people face financial difficulties, according to new research from Lowell.

Conducted to mark National Customer Service Week, the research found that 81% of respondents believe it is important to speak to a human when they have a debt-related problem. In comparison, 61% say they would choose a real person over a chatbot – even if the chatbot could answer their questions more quickly.

Email and other digital channels are valued for day-to-day contact while only 8% saw letters as effective for building trust, underlining the need for modernised communication contact.

Responding to the data, Kathryn Morgan, Managing Director of Lowell Financial, said “Debt is deeply personal and often difficult to talk about. Our research shows that while customers appreciate the flexibility and convenience digital tools offer, for more serious problems they want a real person at the end of the phone who listens and understands.

“Digital works brilliantly for the everyday, but when people are struggling, human empathy still matters. At Lowell, we believe technology should support, not replace, that human connection. As financial services continue to digitise, it’s important not to throw the baby out with the bathwater.”

The findings also show that email and other digital channels are the preferred option for day-to-day communication: 85% of respondents said they are likely to respond to emails from debt companies and 72% to app notifications, compared to 68% to letters. When asked about their preferred method of contact, half (50%) said email while only 6% selected letters.

When it comes to building trust, traditional letters ranked lowest. Just 8% of respondents said post was the most effective way to build trust, compared with 16% for in-person conversations, 29% for phone calls and 25% for digital interactions.

Morgan added“Trust is the foundation of any customer relationship – particularly in an industry like ours, which is often misunderstood. Outdated rules under the Consumer Credit Act only erode that trust which is why we’ve been calling for modernisation of the legislation so it reflects how people actually engage today.

“Through our Fairer Debt, Fairer Society campaign, we’ve been advocating for change to drive the best customer outcomes. After extensive engagement with MPs and policymakers, we’re pleased that the Government is now consulting on CCA reform and we look forward to continuing the conversation.”

Jo Causon, CEO of the Institute of Customer Service, said “Customer needs are fast evolving and growing in complexity – particularly for those in vulnerable situations. Organisations who are getting service right understand this and are utilising new technology to streamline their service offering while still making human agents available to handle more challenging queries. It’s this fusion of technology and human, alongside considering the end to end customer journey, that will elevate your service offering and ultimately build trust and loyalty.”