EQ COVID 19 For Bearance

Using Technology To Support Borrowers In Difficult Times

17 December 2020

By Sam Goodacre, Head of Credit Services IT, EQ Credit Services

At the beginning of the COVID-19 pandemic the Financial Conduct Authority (FCA) moved swiftly to put in place measures to support users of certain consumer credit products. They had an expectation that lenders would move equally as fast in order to protect consumers through these difficult times.

Sam G Sam Goodacre Head of Credit Services IT, EQ Credit Services

In October, the trade association for the UK banking and financial services sector, UK Finance, reported that lenders had not only moved fast but had also provided a lot. Since the start of the pandemic they: had given 2.5 million mortgage payment deferrals, offered 1.13 million payment deferrals on credit card debt and nearly 800,000 deferrals on personal loans.

Encouragingly, initial industry analysis indicates that over three-quarters of customers who chose to defer have now returned to making regular payments but this still leaves a large number of people who are struggling to maintain repayments.

As the ambitions of an effective vaccine become a reality and bring hope that there is light at the end of the tunnel, and a return to a version of normality becomes a possibility, the financial after-shock of the pandemic for many borrows still presents a challenging recovery.

In order to support customers with the financial tools they need, lenders must have a clear strategy for the road ahead. They need to be confident that their technology and service provider can support this.

In 2019, before the pandemic hit, EQ Credit Services (EQ) chose to invest heavily in the functionality of the platform. Knowing that consumers’ digital expectations were continually growing, key aspects were developed: the flexibility of our platform, the self- service functions, and the API integration.

Fast forward to early 2020 and EQ were creating software that already contained the functionality required to support payment holidays and forbearance reschedules. We were quickly able to offer these solutions to clients without the need for software upgrades. Our commitment to supporting our clients continues.

As the regulator places increased focus on lenders to take action on improved customer contact and communications, financial providers need to make contact in good time before the end of a payment deferral. Borrowers need to receive timely information to enable them to understand their position.

That’s why the latest EQ Credit Services software releases have built in additional functionality to help our clients better support their customers. This includes improved communication strategies for borrowers who are in temporary arrangements and have failed to pay on time. We are extending the scope of our APIs to support payment cards being explicitly linked to temporary arrangements and are also recording the customers’ consent against payment card details.

As we all deal with the restrictions placed on us by the regional tiered lockdowns, we can expect more people to come under financial duress. Lenders will continue to need a flexible loan management system that enables them to remain up to date with any regulatory changes. These may be COVID-19 measures or they may be other planned updates such as the changes to the Breathing Space Regulations due to come into force in May 2021.

Either way, lenders need to partner with a technology provider that continues to drive products forward and deliver solutions. We are here to enable our clients to help customers in financial difficulty, guide them in the latest regulations, and help grow their businesses.

Find out more about how to use technology to support borrowers in difficult times

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