Although businesses are encouraged to start repaying loans as soon as possible, the first compulsory payments are not due until Q1 2021. This gives lenders several months to prepare their teams to undertake collections activities on a scale not experienced before. This volume increase will test the processes, people and systems already in place within their organisation. Smart businesses will want to be sure that they will pass this test or they may find themselves suffering alongside their customers.
For mortgages and consumer credit payment holidays, the FCA has more to say on long term active engagement and support for vulnerable individuals.  Custom, tailored support is expected to be provided to those remaining in, or entering, financial difficulty. This in itself is not new, but the volume of customers expected to fall into difficulty presents a significant challenge to businesses. In order to maintain the quality and accuracy of advice and support required by the FCA, firms should be reviewing their current processes, communication channels and resources to ensure they can meet the expected demand.
As lenders review the challenges they face, they know that being proactive is the only way to weather the storms ahead. They know they are going to have to provide debt management advice and assistance on a scale not previously experienced, and combine that with a sympathetic but effective collections function to enable them to continue as a healthy, responsible business themselves.
So what steps can they take to ensure they have the capacity, capabilities, and expertise in place to meet these dual requirements? Are their technology, processes, people, regulatory understanding and data ready for the challenges ahead?
At EQ, we have full end-to-end capability to support lenders at every stage when helping customers deal with financial difficulties. We can augment their operations in activities from the pre-emptive assessment of customers’ risk through to debt administration, loan rescheduling and collections. EQ can supply skilled resource and/or technology for in-house operations or a regulated fully outsourced solution.
What you need to consider
Can your current processes scale up effectively and efficiently? Are there legacy steps that no longer suit your business? Do you have to include new considerations for COVID-specific situations? How do you incorporate the new regulatory guidance?
Do you have the right skillset and capacity in your workforce? Are your staff flexible? Can you upskill, train or increase capacity quickly?
Do you have a single customer view across your operations? How effective are your data validation and cleansing and tracing operations? Can they quickly increase capacity?
Can your technology platforms carry the load? Do they match your processes and make them more effective? Can you use them to evidence regulatory compliance? Can you get the necessary Management Information (MI) and reporting data from them? Do they support your customer facing staff to do their jobs effectively?
Lending Stream and EQ work together through COVID-19
Both businesses overcame the challenges of lockdown by using Zoom to recruit, as well as train employees for the specific needs of Lending Stream. This was the first time either organisation had handled a project in this way. At the time of writing, employees are already handling email and chat operations and have recently started handling voice calls.