Back to school

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This weekend is a key milestone for many of us… yes next week (in many places at least) it’s the Labour day weekend and the following week back to school.

It’s a sure sign of the end of summer, quieter days at the home office and for those without school aged kids, the start of cheaper airfares!

In hot water

Of course, this also means earlier sunsets and with the weather cooling the sinking prospect that I will at some point have to put the heating on.

Just this prospect of ‘putting the heating’ on seems to have put me, and what appears to be most of northern europe into a flat panic this week.

Running through the data on my own smart meter the electricity bill has already doubled and from the price cap communication last week it sounds like it may almost double again – all of this is before increased winter usage too.

We have talked of fuel poverty previously. It is gradually expanding to a larger and larger segment of society.

Yes, we can try to find ways to save energy, but the price is undoubtedly escalating faster than many can cut usage… a £4-5K energy bill is just unmanageable for most folks.

Also my business

But, what really concerned me were the viral images of electricity bills on twitter & here. We have all had our attention focused on consumer prices, but poor old businesses, who are not subject to the price cap, had already seen the dramatic rises in energy costs.

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Cafes, stores with refrigeration, and delivery supply chains, let alone those with industrial use are already hurting. Some businesses have been closing with immediate effect.

Passing costs onto the customer will be inflationary (£12 for a cup of coffee anyone), and closing the business means loss of income for any (ex)employees… all adding to our affordability woes… the reality of what we could be really facing is starting to set in.

Hierarchy of needs and payment

It all feels like the problem is gradually moving up the hierarchy of needs and with food to eat being pretty much at the top there may not be much left for those down the payment hierarchy – and yes this includes us in the consumer finance industry…!

So, a couple of immediate thoughts about what to do.

  • Have a plan and a playbook, support measures, and forbearance plans at the ready
  • Embed flexibility into process design. This was a big learning from the pandemic remember, anything can change and change can happen fast
  • Find scaleable and digital ways to handle increased volumes. Volumes could easily double, get ready now
  • Support your employees.. they may need warmth, food and importantly a job… stay in business by running a good business
  • Use data to tailor customer support and journeys. Remember to look beyond what the data says about today to forecast about the future, combine data across time, look at trends to make more powerful predictions and remember it is always what the data says but sometimes what it does not say that is important… try to identify gaps in what you know as this is where surprises can come from
  • Lastly, try to do the right things for customers… once all of this is over brand loyalty is a fantastic asset… and if you don’t do this proactively, the regulator will force you to do it anyway (Consumer duty – remember first deadline is October!)
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Of course we hope that there will be some support from the government… although hope strikes me as more of an excuse to do nothing rather than any meaningful strategy and we do really need a strategy.

This will all be a large part of the topics for conversation at the Credit Connect Lending Technology think tank event next week… it should be a good and timely conversation for sure.

It is after all a conversation that needs to be had with some urgency… and, after admittedly a somewhat lazy, but great summer, now is the time to prepare.

So apologies somewhat for the downbeat tone this week… To cheer myself up I am off to the shop and pub to help them stay in business I think…

Have a great weekend everyone… do sign up for the session next week 🙂


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