DEMSA update: Open Banking / Credit Summit / Digital Debt Resolution / Insolvency Stats / Events / …

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General update

We are approaching Debt Awareness Week from Monday 21 March 2022. I have seen a number of supportive posts in the lead up. Debt Awareness Week is the StepChange annual campaign that aims to put problem debt and debt advice on the agenda. Hugely topical at the moment as the bulletin will reflect from a number of angles.


The Monetary Policy Committee (MPC) voted 8:1 to increase interest rates for the third time in four months. The Bank of England has increased the rate to 0.75% from 0.5%. The intent is to calm the rise in the cost of living. Inflation stands at 5.5%, well above the Bank of England’s 2% target. The Bank expects inflation to exceed 8% in coming months. Developments since the February 2022 Report accentuate both the peak in inflation and the adverse impact on activity by intensifying the squeeze on household incomes.

This is obviously not good news for borrowers with a mortgage, about 2m households will see an immediate increase in their mortgage payments as a result of the rise in rates, according to UK Finance. It is estimated that the increase will add about £26 a month to the cost of a typical tracker mortgage and £16 to the cost of a typical standard variable rate mortgage.

Cumulative £26 increases will take their toll and need to be factored into any forward-looking affordability assessments whether this be for new lending or in respect of arrears management and managed debt solutions. This is multi-dimensional and many of us will have received our new council tax payment schedule this week for FY 2022/23 to add to the water rates schedule. I am still digesting my electricity forecast for FY 2022/23.


The US Federal Reserve has also raised interest rates for the first time since 2018 in an attempt to bring fast-rising prices under control. The US central bank said it was lifting its benchmark rate by 0.25% and warned of further rate rises in the months ahead. The moves come as the global economy faces new uncertainty caused by the Ukraine war and coronavirus outbreaks in China. As in the UK, it is hoped this will cool demand for goods and services, helping to ease price inflation in the US, which hit a new 40-year high of 7.9% last month.

Ofcom calls for telecoms and broadband firms to do more to help customers struggling with bills

Around 1.1m households (5%) are already struggling to afford their broadband and this rises to around 10% for the lowest-income households. Broadband may also be a priority expenditure for those working from home or in a hybrid working arrangement. Many tariffs go up at the end of this month.

Ofcom is inviting views on proposed guidance by 12 May 2022 and intends to publish a final decision in the Autumn. This all sounds too slow unless impacted firms pro-actively respond to the direction of travel and regulator expectations, which shouldn’t be a surprise.


Call for minimum 7% benefits rise

This article from the Child Poverty Action Group (CPAG) appears to have considerable support from the industry in relation to helping low-income households. They state that a second cut to benefits in 6 months is unthinkable. The government should increase benefits by at least 7% in April 2022 to match inflation and ensure support for housing costs increases in line with rents. They are urging the government to use the Spring statement on 23 March 2022 to stop this large gap widening even further.


This comes as MAT has published an article on the cost-of-living crisis and is also urging the government to take action.

Joanna Elson CBE said:

“Millions of households in the UK are already struggling to meet rising costs. With energy prices soaring, inflation rising and tax increases imminent, millions of households are on a collision course with the cost of living crisis.

“At the Spring Statement, the Chancellor has the opportunity to change course and help ease some of this pressure. As a minimum, this should include significantly uprating benefits and introducing further targeted support to help people struggling with the steep increase in their energy bills.”

The findings, published in advance of the Spring Statement and based on a Opinium survey of more than 2,000 UK adults, confirm the narrative around household finances:

  • 19% of adults say they are likely to borrow or use credit in the next 3 months to cover essentials, including food, clothes and bills
  • 22% worry about money every day
  • Only 20% feel prepared to deal with rising costs


The BBC has covered the impact on consumers with prepayment meters.

Prepayment meter price cap graphic


Auriga – emergency fuel vouchers

Auriga is seeing increased demand for emergency payments service from charities, local authorities, utility companies and housing associations. They are a trusted third-party service to get emergency support payments to customers in a crisis.


Energy firms need to use the cost-of-living crisis to rethink their collections model

Welcome to the DEMSA bulletin to Sandy Duckett and Amon Ghaiumy-Gewinany of Ophelos. They have recently posted around the energy crisis and for energy providers to look at new approaches to arrears management and debt resolution. They have rightly reflected that when partnering with a DCA/DRA, energy firms should be looking for agencies that can offer their customers a positive experience and will in turn reflect well on their own reputation and that reduces regulatory risk in the supply chain. The message is a consistent one around data-driven approaches and how AI/ML can be embedded in core processes.

See also  DEMSA update 14/5/2022

Key messages are to improve customer outcomes, detect vulnerable customers and drive customer engagement. Their omni-channel communication strategy is digital-first.


MaPS update

MaPS has contributed to Wagestream’s new State of Financial Wellbeing research report that is based on surveys of 5,000 UK employees and 600 senior HR leaders. This covers the ‘perception gap’ and how this is undermining employer efforts to improve financial wellbeing. 68% of employees will not tell their employer if they are struggling with money, which could be important relative to the broadband debts discussed above.


Lee Healey from IncomeMax posted on a collaboration with MaPS around income optimisation.

MaPS has posted on financial education, which I have seen that Gareth McNab has picked up on.


Only 48% of the UK’s children and young people receive a meaningful financial education.

VRS / Connected Data debt prevention collaboration

The Connected Data and Vulnerability Registration Service (VRS) partnership is designed to enable more firms to understand who their vulnerable customers are and act upon this intelligence. Connected Data has access to multiple data providers in the UK. By bringing their data together and providing actionable insight, the Connected Data team is enabling their customers to quickly and proactively identify those individuals who may be falling into vulnerable circumstances and put in place more appropriate treatment paths.

Kirk Fletcher, CEO of Connected Data, said:

“Vulnerability needs to be at the heart of any data enabled debt management process. We are seeing more organisations beginning to re-evaluate how they approach the growing levels of debt and how they identify the rising number of vulnerable customers because of it. Our access to the widest range of predictive data solutions and the way we present it back to organisations has instantly elevated their insight across their debt and customer management processes. The VRS database will add a vital element to this, giving organisations a clear view on exactly where they must start.”

The Connected Data website opens with ‘data enabled debt prevention’ and that they transform customers’ insight across their debt management process, simplifying the deployment of predictive data, removing data noise and identifying opportunities to prevent & reduce debt across their organisation. 


C & R Software and IE Hub partnership

C&R Software has announced an integration with IE Hub’s online affordability system, creating sustainable payment plans for consumers meeting financial obligations. The partnership is intended to increase engagement and ‘humanise’ collections processes, making it easier for consumers struggling to regain good financial health. As frequently referenced in these bulletins, this comes at a time when personal debt is projected to increase across the UK.

The partnership should be a significant technology enabler, reaching out to a wider audience supporting thousands of families across the UK using a seamless, end-to-end digital process.  C&R Software’s platform is Debt Manager and is deployed in a number of vertical markets including financial services, utilities and government agencies.

Dylan Jones, IE Hub CEO, commented:

“Personal debt has increased significantly across the UK, and projections indicate more families may struggle in 2022. Our system makes consumer affordability assessment easier, and this strategic partnership removes many of the repetitive processes consumers experience today.”

John Mcmahon, VP of EMEA and APAC Operations at C&R Software said:

“Our mission is to support our clients as they help their customers set up sustainable payment plans that can be easily configured to meet circumstances that continually change. This integration comes at a time when credit issuers need a flexible, configurable system to properly support their customers in financial distress. The goal is to give everyone in this situation a clear path to good financial health.” 



Building the right customer journey with debt collection/debt resolution

We have several Arum folk on the distribution list. There is a survey at the end. This seems very topical in relation to the stories above and the wider discussions around strategies for the cost-of-living crisis and evidencing new approaches as we plan for the FCA Consumer Duty policy statement in July 2022. Amongst the headlines is the key topic of ‘when to automate versus when the human touch is needed’.  


Credit Summit 2022

I had my briefing from Credit Strategy yesterday on chairing the Open Banking strand of the Credit Summit, as well as presenting in the afternoon. My thanks already to Faith Reynolds (Amplifi/Open Banking guru), Sarah Lambert (Ecospend), Andrew Alder (Paylink), Ken Doherty (Cerebreon), Sam Manning (Hope Macy), Martin Hickley (UK GDPR guru), Dylan Jones (IE Hub) and Mark Bryant (VRS) for their input to my deck, which I will circulate after the event.

I have tried to include context to our sector and how Open Banking may play a role in debt solutions and the blueprint for Statutory Debt Repayment Plans (SDRPs), where cost efficiency and continuous improvement will be key factors for SDRPs to be viable in the long-term where customer contributions may be variable and reducing for a period of time.

See also  DEMSA special update: FCA activity / ISO 22458 launch / CSA 'wide of the mark' / Events

The speaking post is gathering some traction at over 1,200 views. I am looking forward to catching up with many of you as speakers, exhibitors and delegates on Wednesday 23/3/2022. I may have to limit caffeine intake after agreeing to have a coffee with a number of you already. I should be able to spot Matt Subert, otherwise keep an eye out for me.

Link: – DEMSA post

Link: – Agenda  

Statutory Debt Repayment Plans (SDRPs)

I have been in dialogue with HM Treasury around progress on the Statutory Debt Repayment Plan (SDRP) consultation paper. This looks like it has been delayed because of the Ukraine crisis re-directing HM Treasury resources and priorities. DEMSA blogs and FCA consultation responses have been taken onboard and I have shared the draft Open Banking presentation around how innovation needs to be accounted for in new product development and policy thinking. As ever, we are trying to get a balanced representation of stakeholders that actually have to deliver these regulatory proposals.

Fair Digital Finance

I liked this quote from Faith Reynolds in her post this week:

“Fair digital financial services need to be underpinned by consumer-centric policy and trustworthy systems. The design and delivery of products and services should be informed by consumers and their representatives. The digital finance ecosystem must deliver better value and create financial health and resilience for everyone, no matter where they are.”

This relates to the ‘Fair Digital Finance’ document she circulated at the link below:


The paper covers in more depth some of the future risks that I touch upon next week (mainly from a UK perspective). The report reflects that ‘financial regulatory frameworks’ still lack effective consumer protection mechanisms and appropriate supervision & enforcement capacity. Providers of digital finance must mitigate the risks of leaving consumers exposed to these vulnerabilities. The wider use of FinTech in an increasingly cashless society creates new risks and exacerbates existing ones already present within financial services.

On a related note, The Fair4All Finance website has announced that the UK wide No Interest Loan Scheme (NILS) pilot has received a boost with a new £1.2m commitment from JPMorgan Chase. By offering a way to spread essential or emergency costs, NILS loans are intended to provide a vital financial cushion for people unable to access or afford existing forms of credit, but who can afford to repay small sums.

Fair4All Finance has teamed up with Toynbee Hall and Fair By Design to deliver the NILS pilot. In 2021, they secured £3.8m in funding from HM Treasury.


Growth of BNPL

This TDX Group blog on the growth of BNPL is also timely. I recently spoke with Isobel Crosse, Head of Customer Experience at TDX Group, around the benefits they have found in adopting BS18477 (consumer vulnerability). In this article they look at the importance of being FCA ready.

They have analysed Equifax transaction data acquired through Open Banking and can see that almost 30% of consumers are making BNPL payments, with an average 5.7 transactions a month for £125 in total. A recent Equifax survey discovered that 43% of BNPL users reported missing at least one payment which is a worrying indicator for future indebtedness.

As reflected by many on the distribution list, TDX Group believe that the recovery of debt could be significantly more efficient, effective and fair through the use of more data and analysis. They are focusing on specialisms in vulnerability, digital collections and Open Banking to help their clients choose the right treatment path for every customer, based on individual circumstances.


DebtStream’s poll result have been published around the impact of the FCA Consumer Duty on digital engagement. It is clear that the status quo is not going to be maintained and that transformation programmes are a requirement between now and April 2023.  


Strong Customer Authentication (SCA) requirements now in place – 14/3/2022

I am sure that the FCA Strong Customer Authentication (SCA) requirements will come up on 23/3/2022. SCA is a requirement for authenticating online payments that was introduced in connection to the EU’s revised Payment Services Directive (PSD2).

On 6 October 2021, the FCA wrote to CEOs to reiterate their expectation that firms are fully compliant with SCA requirements by 14 March 2022, taking all reasonable steps to support consumer and merchant readiness.

Any firm that fails to comply with the requirements for SCA from 14/3/2022 may be subject to supervisory or enforcement action. Merchants that aren’t able to fully comply with anti-fraud requirements risk their customers’ online transactions being declined.


I also spotted this post from The Payments Association in association with UK Finance and Latham & Watkins. This highlights how complex the UK payment regulations and oversight are.


The report can be read or downloaded from the link above.

They have referenced Pay.UK developing the New Payments Architecture (NPA). Some new entrants are offering dynamic products like BNPL, available on different ‘payment rails’. The most popular payment rails include Automated Clearing House (ACH), Mastercard and other major credit card providers, PayPal, the RTP Network (for real-time payments) from The Clearing House and blockchain. I will be semi-fluent soon, which leads me into the next bit of important jargon.

The Competition and Markets Authority (CMA) has clarified the definition of ‘Sweeping’ for Variable Recurring Payments (VRP). VRPs are a key topic in my session and the clarification may not be what everyone wants to hear from a consumer benefit perspective in terms of being able to pay third parties. This currently focuses on how consumers and SMEs can make their money work harder with better interest rates and overdraft alternatives by moving money to another account in their name. Sam Manning and others have strongly made the point that this needs to extend to third party variable recurring payments and is not a replacement for direct debit or other established recurring payment methods in its current form.  

See also  DEMSA update: Cost-of-Living / Cyber-attacks / MaPS debt advice 2022 / ISO 22458 / ICO intervention / Complaint stats / VRS event update


Theresa Casey has just been appointed as General Counsel at the Open Banking Implementation Entity (OBIE) and will be critical in embedding and driving forward the considerable changes the OBIE has made to its governance, management, processes and policies. The ESG and operational resilience agendas are impacting firms of all sizes and this is particularly true in the FinTech/PayTech ecosystem, where inclusive design is a critical outcome from the FCA Consumer Duty (implementation April 2023).

Part of the OBIE’s role is evolve the specifications for the Application Programme Interfaces (APIs) that banks and building societies use to securely provide open banking. This is a key aspect of my Credit Summit discussion and some of the practical case studies. Many on the distribution list have an active interest whether using these APIs or providing development tools that enable more innovation.


HMRC and Anglian Water – scaled case studies

Following the success of implementing payment initiation services, HMRC is now looking to maximise the benefits of open banking by exploring the application of account information services. They are keen to continue engagement with the OBIE, Pay.UK and the Bank of England to explore how they can further align our strategic activities.

Billy Helm, Marketing Executive, Ecospend says:

“2022 will be about consolidation and sustaining growth. Ecospend’s partnership with HMRC proves that, where there is consumer demand and an intuitive flow, the technology works well at scale.”

DEMSA agrees with Billy and Sarah Lambert that for open banking to reach its potential, consumer education will be vital. I have also responded today on some of the work that MaPS is doing regarding financial education. 


It was also a significant week for Ecospend’s Pay-by-Bank solution as they moved into the Utility sector, allowing millions of Anglian Water Services customers the opportunity to pay their water bills directly from their bank. This comes after the recent ReachOut/Sigma announcement with Anglian Water that DEMSA has previously covered.


Insolvency Statistics – February 2022

I published (attached) a DEMSA update on the February 2022 insolvency statistics on 16 March 2022, which included the position on the Debt Respite Scheme. 

DROs have nearly climbed to the pre-pandemic levels with the new eligibility criteria from June 2021 and the Breathing Space figure was the second highest after the opening month in May 2021 when there may have been pent up demand and the StepChange Debt Charity figures included digital registrations.

IVA figures are relatively stable at between 6,000-7,000 per month, but we are monitoring closely as the cost-of-living crisis plays out. There is always a lag between financial hardship hitting and the take-up of debt advice. It will be interesting to see if this correlates with an uplift in the use of breathing space in England & Wales.

R3 has published a guide for dealing with debts in Scotland.



My thanks to Jo Howcroft at BSI regarding a recent cyber-security post. Awareness of Cyber-security/resilience is more vital than ever. BSI can help your firms to improve security and resilience through data-driven insight. BSI Connect is an integrated technology solution that is intended to inspire trust in audit, compliance and supply chain activities. Along with wider ESG activities, the link below reflects some of the emerging requirements for regulated firms of all sizes. Cyber-security/resilience sits in the Social Value section of the government tenders and government standards and expectations are reasonably well documented. Proportionality is key and the enterprise RegTech/GRC providers, data platforms and systems integrators will have scaled solutions for more significant ecosystems.

Jo has also shared a post on the benefits of undertaking penetration testing. 


Youtube link: 



Peter Gent of CRS posted regularly during their event on Thursday that I couldn’t attend. This was on the ‘shaping the future of collections’. Pictures available on the link below. CRS has also re-branded to Coeo. I am sure there is a story behind this.


MAT training on vulnerability and inclusive design

Inclusive design for essential services on 29 March and 31 March 2022 delivered by Zoom. Bailey Kursar, Vulnerability and Design Lead, MAT:

“Inclusive design is a toolbox that helps us design products and services that can be accessed by everyone. Instead of designing for a mythical ‘average user’, we design by including the people who use these products, their perspectives, and information about their lives and needs.”



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