Another great day at the Credit Connect Think Tank… Lots of discussion on the increasing risk of another affordability event coming through and what to do about it… also the CoWork discussion at the end of the day was super interesting (and somewhat intense)… the world is changing fast, great to see and hear so many exciting new ideas.
Key Take Aways
- Firms are operating in a volatile affordability environment, with cost of living, fuel, energy, groceries, inflation, tariffs and geopolitical pressures expected to affect customer resilience.
- Credit and collections strategies need to move upstream, with stronger pre-arrears models, earlier engagement and prevention-led interventions.
- Firms cannot necessarily rely solely on CRA or ONS data because affordability and sustainability indicators are moving too quickly.
- Consumer Duty remains the central regulatory lens, requiring firms to evidence decisions, support, outcomes and rationale.
- Regulation was viewed as increasingly a challenge to manage because definitions can be unclear, retrospective and shaped through enforcement or court outcomes.
- Front-line collections teams face significant pressure from overlapping regulatory, client and sector-specific requirements.
- Customers are increasingly using self-service, apps and portals, partly to avoid difficult conversations.
- Debt stigma remains a core barrier to engagement, particularly for customers experiencing financial difficulty for the first time.
- Utilities and enforcement organisations are seeing more customers under stress, including customers using credit cards to pay essential bills.
- Data sharing between government, utilities, councils and firms is a major opportunity to identify customers who need support before arrears escalate.
- AI is seen as useful for agent support, speech analytics, complaints handling, data analysis and productivity, but risky when used without governance or directly in complex vulnerable customer journeys.
- The future operating model needs flexible systems, better data, tailored engagement, stronger governance and human escalation where empathy or judgement is required.
Innovation
- Digital engagement channels to allow customers to seek help without needing to speak directly to an agent.
- Pre-arrears modelling to identify customers likely to become unaffordable or vulnerable.
- Use of alternative datasets and overlays where traditional affordability data is too slow.
- AI prompts to help agents navigate policy, process, ID&V and regulatory requirements.
- Speech analytics to identify call issues and escalate them quickly to team leaders.
- AI-supported complaints handling to review cases end-to-end and improve final responses.
- Data lakes and reconciliation projects to support Product Sales Data reporting.
- DWP data sharing to identify eligibility and automatically apply water bill reductions.
- Lightning Reach QR codes and referral routes to connect customers with wider support.
- I&E journeys used not only for affordability assessment but also as an engagement tool.
- RCS and button-led messaging to reduce friction and make customer responses easier.
- Behavioural science and personalisation to tailor contact timing, channel and language.
- Portal and app journeys to support self-service while allowing customers to move to human support when needed.
- Use of AI to prompt agents to ask additional vulnerability questions during calls.
- Use of visual timelines and reminders, such as for Breathing Space expiry, to help customers understand next steps.
Key Statistics
- Inflation was discussed as potentially reaching around 6%.
- Diesel was discussed as potentially rising to around £2.30.
- Around 35%–40% of customers were said to self-serve.
- One water-sector organisation supports over 200,000 customers with reduced bills of up to 50%.
- Around a quarter of those surveyed could not meet the cost of essentials in all months of the year.
- One in ten could rarely or never meet the cost of essentials in every month of the year.
- A further 44% were just about managing essentials but had no money left afterwards.
- Together, nearly three quarters of the lower-to-middle-income population had no money left.
- Around 65% of enforcement cases referred involved individuals the organisation had seen before.
- Around 4,000 customers were identified as potentially vulnerable and needing longer-term repayment support.
- Around 140 criteria had previously been reviewed to assess propensity and ability to pay.
- Around 60% of customers enquiring about discounted water products had never missed a payment.
- A SAP study was referenced stating that 98% of people read a text message.
- The same study was referenced as saying 43% respond to linked marketing material within around 72 hours.
Key Discussion Points
- How firms should anticipate financial shocks before customers fall into arrears.
- How to balance financial inclusion with affordability and sustainability of lending.
- Whether prevention should receive more focus than cure in regulatory and collections practice.
- How firms should evidence decisions when outcomes may later be judged retrospectively.
- How financial education could help consumers understand credit, arrears and support options earlier.
- Whether BNPL and short-term credit create additional risks when used for low-value or everyday spending.
- How Consumer Credit Act reform could replace prescriptive requirements with FCA outcomes-based rules.
- How Product Sales Data reporting gives the FCA greater visibility but creates operational and data challenges.
- How water companies, councils and enforcement firms can identify customers who are not yet visibly in arrears.
- How social tariffs, debt write-off and discounted bills can help, while still facing awareness and engagement barriers.
- How affordability assessments should balance robustness, simplicity and customer burden.
- How data sharing between DWP, HMRC, councils and firms could reduce customer friction.
- How to manage customers who use credit to maintain access to essentials or protect credit scores.
- How firms should respond to AI-generated complaints containing irrelevant or excessive legal arguments.
- Where AI should sit in the operating model: agent support, not autonomous decision-making.
- How to prevent AI-on-AI interactions that extend complaints or reduce human understanding.
- How firms can use channel preference, timing and behavioural data to improve engagement.
- Whether mandatory letters should be reduced or simplified as part of regulatory reform.
- How the industry can reduce debt stigma and promote positive engagement stories.
- How many contact channels firms should operate, and whether RCS can replace or improve SMS.
Description
The Credit Connect Technology Think Tank is a multi-panel discussion on credit, collections, affordability, vulnerability, regulation, engagement, data, AI and technology. The discussion moves from macroeconomic risk and regulatory uncertainty into practical customer impacts, including cost-of-living pressure, credit use for essentials, social tariffs, data sharing, income and expenditure assessments, vulnerable customer support, self-service, customer contact channels and the role of AI. The tone is practical and operational, with repeated emphasis on prevention, evidence, flexibility, human judgement and customer outcomes.
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