What a year 2022 has been! And who would have thought we could ever be surprised again after experiencing life during a global pandemic?
In this packed year:
- The UK has had three Prime Ministers and four Chancellors
- The Lionesses finally brought football home
- Birmingham hosted the 2022 Commonwealth Games
- Speaking of which, the Head of the Commonwealth, our dear monarch Queen Elizabeth II passed away after 70 years as our Head of State
- Maybe the biggest worry for people has been the rise in energy prices to unprecedented levels
- The Bank of England (BoE) base rate of interest went up 3.25 percentage points (the highest rate since October 2008), and Nationwide’s House Prices Index shows a month on month drop in house prices from March 2022 to present, with the biggest drop since June 2020 (-1.4%) hitting in November 2022. Naturally, the BoE base rate increase has driven an increase in mortgage rates and the nervousness and uncertainty in the private rented sector has driven an average 10% increase in rents.
So, what have been the hot topics within collections and recoveries specifically? Here’s what might have caught your attention this year:
Importance of reinforcing professionalisation and training
In challenging times, and especially in a brave new world of hybrid-working / home-working, it is important to reinforce the basics and build on them, such as the need for professionalisation and training to ensure good outcomes for customers and compliance with regulation.
We’ve seen more great work from the Chartered Institute of Credit Management (CICM) in setting and delivering professional standards, as well as the ongoing benefits of adopting the Credit Services Association’s (CSA) Code of Conduct. Arum also highlighted our own Fair Customer Outcomes training course as a practical way in which our experts can support teams on the frontline.
Benefits of collaboration and partnerships
From integrated income maximisation to regular events sharing best practice in a rapidly changing environment, the benefits of working together have become even more critical this year.
In March, Arum held an event at the House of Commons, hosted by the Baroness Meacher, which saw experts from government come together at the House of Commons to look at the impact of the affordability crisis and how the government’s Debt Resolution Services framework can help public sector organisations, while still delivering good outcomes for people and businesses.
Whilst we are huge advocates of income maximisation as an alternative to forbearance, in the latter part of the year it became clear from industry reports and research that, in isolation, it just isn’t enough. At the Credit Strategy Collections & Vulnerability Summit, we presented a whole raft of other services that can be used to support customers and increase the chances of the client getting paid, including repayment optimisers, rent deposit reducers, admin burden minimisers, and literacy and numeracy improvers.
As energy prices continued to soar amid what was shaping up to be a cold winter, we decided to set up a regular round table discussion with our sister company Just, and Future Leaders. It brings together utility businesses in the UK, to cross-pollinate best practice and give some exposure to leading-edge developments in the sector.
Given the financial pressure on local government, we also looked at how data can help local authorities to collect more council tax and provided some successful case studies, as we launched our Data Science & Analytics service.
Changes to regulation and legislation
With the Statutory Debt Repayment Plan (SDRP) consultation and the preparatory work for the Financial Conduct Authority’s (FCA) Consumer Duty underway this year, there has been a need to delve into regulation and legislation. We published an article on the Consumer Duty along with a webinar, and an article on the Statutory Debt Repayment Plan, alongside a webinar and a whitepaper.
The SDRP responses from different sectors of the industry threw up an interesting schism, with a broad alignment of government and enforcement looking for more controls to be applied to the plans, while many in the FCA-authorised collections space and the debt advice sector were looking for greater flexibility.
To see if we could draw helpful comparisons from across the globe, we broadened our gaze to look at best practice in other territories, notably the way in which Australia and New Zealand approach problem debt, debt advice and debt solutions, and what we can learn from each other.
I think it’s fair to say that we’ve lived through some extraordinary changes in our industry over the last couple of decades, but what we’re seeing now is a significant acceleration in the pace of those changes. It feels like we’re riding the bow wave of the pandemic and that we’re not going to see it subside much for at least a couple of years. All we can do is arm ourselves with enough up to date information to make quick decisions in the face of rapid evolution.
Arum is the UK’s leading independent provider of advisory and professional services within collections and revenue across the public and private sectors. With over 24 years’ experience in over 20 countries, organisations choose Arum to prevent and resolve their problem collections and revenue challenges. If you’d like to speak to me about anything I’ve raised in this blog, I’d love to hear from you and please feel free to contact me directly.
About the author
Steve Coppard
Group Director of Debt Policy & Strategy
Arum & Just
Steve has been in the debt industry since 2001. He spent most of his career working in government, where he started on the phones collecting VAT debt and ended up being responsible for prompting improvements to the management of over £40bn of public sector debt. He joined Just and Arum in May 2022 where he continues to shape the biggest conversations in the debt market, having been recognised as an Influencer on the Credit 500 list for a number of years. Credit Management Magazine recently called him one of the industry’s genuine thought leaders.