Navigating Digital Customer Journeys and Vulnerability – [FULL INTERVIEW]

0:02
Hi, everyone, I’m here with Dan Caldcott. Today who’s from the digital dra. And we’re gonna have a bit of a catch up. So, Dan, how things good to see you. Good to see you too, Chris. I think, yeah, things are going, going well, we’re busy. So I don’t think we can because there’s many complaints from our end. Have you found the market since we last spoke, it must have been probably over a year ago now. And you guys are growing. And we we were coming off the back of the pandemic last time in terms of like digitalization was a big theme and those kind of things, you see much change or? Yeah, so obviously, we launched pretty much as we were coming out of the pandemic. And obviously, back then, digital were a hot topic, everyone turns during the transformation into digital. I think, I think now I think that the hottest topic is the vulnerability side of things. Obviously, we’re seeing a lot more people in vulnerable situations that probably necessarily wouldn’t have been given everything that’s going on cost of living, energy, inflation, all that kind of stuff. So yeah, I think, our shift as focus to now using the tech and the digital journeys and how to better help vulnerable customers. Are you noticing that vulnerability is changing, or has changed over the last year in terms of the types of people you’re seeing coming through? Yeah, so I think

1:20
I can’t I can’t speak for everyone. But I think you will find in more people that that have never interacted with a debt collection agency before. And I think that’s something that it’s important to navigate. So yeah, there’s definitely a lot more people that are struggling than they usually would have been. And it’s for circumstances beyond their control as well.

1:43
Which makes it a little bit a little bit more difficult because people, it’s a little bit unfair. People think it’s unfair, which probably is there’s lots of different pressures on consumers members, because you’ve got I suppose you got cost of living increases, like food prices have gone up? Yes, potentially, I suppose you’ve got energy costs that have gone up. And the other thing in the background, we’ve had recent interest rate increases, as well as just looking at a graph on that’s quite dramatic how that’s increased even over the last six months. Which of those are the ones that that sort of stand out? Do you get different flavours of trends that are coming in without a doubt its energy? Energy? I think that’s the one that’s hit people the most, because that’s the most dramatic increase over the shortest period of time. And then I think what I’m seeing a little bit more on now is the mortgages. Yeah. And we see more of that in the news as well. So I think that’s going to be the next hard hitting thing. I suppose energy over the summer might moderate a little bit, just with the weather improves, right? I’ve had my heating off already. I’m sure people were doing that. Because that will save a little bit. Yeah, definitely these payments over the winter is quite high. And wasn’t it? Yeah.

2:48
And what about income? And this was that’s the thing we always talk about is, you know,

2:53
expenses have been going up? And if you’ve got an income, then you’re covering it. But are you seeing people as more people coming through have lost their income? Or that’s something that doesn’t really seem to have come through, at least in the news? No promises? No, I don’t think I don’t think we have seen an increase in people contacting us to alter the payment arrangement that have previously agreed, which is fine. We’ve done recently done a few updates on his customer portal to allow people to self serve that as well. So they don’t have to speak to us to do it. But yeah, there’s definitely an increase there. But in terms of of people losing their income completely, I wouldn’t, I wouldn’t see there’s not a noticeable increase or spike in that. What we’ve seen anyway,

3:37
I know you’ve had a big focus on digital, you’re still finding the digital approaches are still the same, same success rates that they have been or is that kind of changing a little bit because it feels like there’s a big push around digital, but it feels like that’s been moderating a little bit, maybe a little bit more of a maturity around it. Yeah, so I think I think for us, obviously, we’re, we’re 99% Digital anyway, all our customer journeys are digital. But I think one of the one of the key things I tried to get across here is that just because we’re digital, it doesn’t mean that that you can’t speak to anyone or we’ve lost that complete human touch of in the digital self serve journeys is fine. But then the ability to transfer and speak to an agent in the resolution team makes that that that journey a little bit more seamless. So if there is a point where a customer gets stuck, they can transfer and the straight through to an agent, whether it’s web chat, WhatsApp, whatever that looks like to the customer.

4:35
It there’s still people they’re available to speak to we’re not just saying There you go do it yourself. The digital element is just by digital means it’s not completely self serve. What about from client to client probably a year or so ago were much more demanding around we’ve got to have digital journeys and that’s a big sort of opportunity to put digital journeys in is that sort of changing now as with the vulnerability piece is that you’ve got to do both

5:00
as well as just doing digital, you got to do both because we’re hearing the vulnerability is a bit of a hot topic. Yeah. So I think for us, I don’t think we’ve got any plans to move to, because we do have the calling capability. So if we do identify someone that we need to speak to, we can, it’s not like that channel is completely closed off. But as in integrating that into our overall strategies, that’s not in, in any of the plans short term, at least, I think, what we’ve done, we focus more on utilising external sources of data. So we’ve recently launched a partnership with the vulnerability registration service, for example, we’ve got multiple API’s that are scanning the customers at the point of Lord so we can recognise if they’re in debt respite scheme, before we’ve contacted him, we can recognise if they’re insolvent before we’ve contacted them, we know if they’ve got a non vulnerability before we contact them. And we can tailor strategies to that, rather than so that’s how we’re kind of expanding our digital vulnerable customer journey. So digital strategies seem to be a little bit a blended interaction with customers. Now you think about any changes around people’s interaction? No. And I’m a firm believer that if you are vulnerable, and there’s something going on in your life that you don’t necessarily want to talk to, it’s a lot easier to do it over a digital digital channel, it’s easier to send a whatsapp saying I’m struggling with this, then try to explain someone on the phone. I know, personally, me, I wouldn’t tell someone on the phone. So I’m a firm believer in the digital channels, digital chat tools, open that door a little bit more for obviously, there’s exceptions to the rule. But I’m a firm believer that overall, it opens that door a little bit wider for customers that actually find that true as well, in terms of vulnerability as well, the fact that people can be ashamed to talk to an agent, particularly if they’re in debt has opened the door to actually getting better insights into vulnerability. I think so i think so obviously, I can’t speak for everyone, but from my experience, and what we see, definitely, because the, in terms of the amount, the percentage of people that say, along speak on the phone, and once a week on the phone, I’ve got to speak on the phone to the volume of customers that we serve, via the digital channels, it’s miniscule. Like we’re talking, we’re talking half a percent percent so that if you get those journeys, right, there’s no reason why it won’t work. Because again, from my point of view, the only time I will call someone is if I can’t do it via web chat, or WhatsApp or whatever that looks like. And then if I get stuck in a loop with a bot, that just irritates me, if I’m if I’ve got to wait just as long on web chat than I do on the phone, that’s irritating as well. So it’s those little things where if you tie those loops, it definitely helps when it comes to engaging with customers. And you mentioned earlier and partnering with things like vulnerability, VRS registration service around using that for segmentation. How much are people willing to give away? The fact that they might be vulnerable? And how do you find out that through, say interaction versus using almost like, pre identified or pre identified pretty pretty useful in terms of doing that initial segmentation? But how much are people willing to give away that they might be vulnerable? Or how do you identify that? I think obviously, again, it’s largely down to the customer volunteering a lot of that information. But again, I think from our point of view, we’ve spent a lot of time on on the branding and the language we use to open that door and make the customer feel a little bit more comfortable to talk to us. That that’s the whole resolution NOC collection piece that was the entire premise behind what we were trying to do. We wanted people to feel a lot more comfortable when engaging with us than you would if you think about the corporate traditional look and feel of a debt collection agency. We’ve we’re doing a lot of a lot everything we can really to move away from a move away from that and

9:00
make it a little bit more comfortable for people to engage. Yeah, and I suppose it’s all around engagement and making people feel comfortable, how much you think culture comes around that in terms of like your company culture or intranet? Is that an emphasis and trying to push that through? That thing goes down to the customers as well? Yeah, I think obviously, there’s a lot.

9:20
Obviously the consumer duty and stuff is going to help with a lot of this in terms of focusing on the outcome, but

9:28
we were fortunate that we got authorised as the FCA, a new vessel coming up because I remember the meetings we have with the FCA they were very outcome focused with us anywhere. So we kind of hashed a lot of that out with them already. And with

9:44
what we do and how we do things, it will never about payments. It we’re always about talk to us engage with us and that that that has been like that since there was part of the concern around that has always been so you can go back to the days of TCF

10:00
is, if it’s not about payments, it’s around engaging with us. Does that still revert back in terms of payments? Or are we leaving money on the table? I suppose it’s

10:09
another concern that people kind of voice I think, yeah, and that’s a concern that we talk with clients about, but

10:17
we work on panels with other agencies, and when we’re not underperforming. So I think the focus should be on getting that engagement, having that conversation, and then understanding more about the position that customers in. And then if that results in impairment, then great, but not everyone compare. But by engaging and understanding about the circumstances, it means that they can be helped. So yeah, the only thing that the only thing I can really say there is we work alongside or the DCA is on panels, and the performance isn’t lacking. And we’ve got consumer duty coming up that’s due to go live finally, at the end of July. It’s time is ticking on that and it’s getting the deadlines are getting near. What do you think the readiness is, in terms of what you’ve seen? Obviously, you guys are on one of the path to getting ready as well. But how did that’s going to change fundamentally the industry? I think it’s a big win for the customer. And I think it’s gonna, it puts the pressure on firms to focus on the outcome more so that that whole resolution not collection piece is a lot more important. So yeah, I think for for from a customer point of view, it’s a big win. And it’s not going to happen overnight. Obviously, there’s a lot to do. But yeah, I think it’s a it’s a positive. And how you thinking how you think about evidencing and that’s one of the challenges that that I’ve definitely heard, at least from the creditor sector, at least anyways, is you got to evidence you give leading to better customer outcomes, etc. And the measurement of it is can be quite tricky. What’s been your kind of approach, maybe a little bit of an easiest place because your collections agency and you’ve got more defined outcomes from from from a payment plan point. Yeah. What’s your what’s been your kind of approach around evidencing an MOA? Yeah, so with those, obviously, we’ve got every touchpoint, we store every touch point, whether it’s a click on an SMS, login to the portal, the buttons are clicking on the portal. We also have, I don’t know if you’ve heard a hot jar that tracks a user’s movements on the so we do customer journey audits as well. And it’s about identifying those sticking points. So just because a customer got to a payment arrangement did to get there as easy as account was the journey kind of mapped out for them. So yeah, I think evidence in it from our point of view is a little bit easier, because we’ve got defined outcomes anyway, about about what we’re trying to do, whether that’s flat recognise that the vulnerable offset of payment plan to payment in full, settle the account, whatever that looks like, we’ve got that end outcome data, but we also have everything in between from every link clicked. So we can identify customers easily that that have had longer customer journeys than someone else. So same outcome, but twice as long as that understanding why, yeah, honestly, do you think we’re gonna get to the point where we’re going to be able to look at maybe even the same outcomes, but different channels and directions to get there? And does it lead to different rates of completion as examples? So for example, it might be length of time and a payment arrangement before breaking? Or did it get to completion? It length of time over over an arrangement in total? Those kinds of things? Or payments amounts? Do you think different approaches or different channels are going to lead to different outcomes? Have you seen that, for example, with digital versus non digital? So what?

13:38
I’d say no, not really, I think what the it’s via the, because, of course, a customer can if they were halfway through setting up a payment arrangement, for example, and they wanted to speak to someone, they could start the web chat, and then the agent can talk them through how to do it and generate the completed link to send them. So it’s almost allowing the customer to to skip that part. And the agent will do it and just send the link and then they follow the link and just complete the plan. So that we’ve found that when we introduced that, that has quite a high success rate. And I think that’s the element of they’ve actually spot someone. So yeah, and I think we’re always looking at the touch points and the depth points to to increase that conversion, that conversion rate. And so one of the things you mentioned there is around skipping and I suppose some of the conversations I’ve had been around attention spans and people’s attention span and the attention economy, we might have talked about that. How much of a reality Do you think that is? Because on one hand, you’ve got engagement and I want to talk with a human right and I want to have that engagement and that’s engagement or have you do even if it’s through a chat, and the other one is on push for time, and I just want to get it done as quick as possible. And where’s the sort of balance between the two? Yeah, and again, that’s, that’s down to personal preference or the customer you’ll you’ll always have you’ll always have the customer that

15:00
That can’t be bothered, doesn’t want to do it. So they’ll just say, this is where I’m at. So we can do that. But you’ll also on the flip side, you’ve got, and from our experience, the vast majority of people that that don’t want to talk to someone, they’ll just be like, I can do it myself. I’ll just do it. And that’s it. But yeah, definitely the attention span is critical. It’s got to be a critical thought when you’re planning out your digital journeys, because people can easily get bored, and they will do and you don’t want them dropping out. If they’re halfway through setting a payment plan, you don’t want them leaving to stay in in an unresolved says, it could almost be like a new segmentation, isn’t it? Well, you might segmented by digital versus non digital preference, but it could actually be by by what’s your attention span? Yeah. Am I an impatient person who wants to get it done in, in in 15 seconds, or, you know, in a couple of minutes, versus someone who really wants to have that engagement with someone and feel like they’ve been looked after? I wonder if that seems like a psychological kind of split from a segment? And yeah, and I think also, that kind of brings in the beauty of digital chat tool, like a text message or a WhatsApp is because you can, you could be sorting out a payment plan over a matter of days. Yeah, because it’s not an instant reply. Service, but at least they’re engaging. So it might be a back and forth over over two or three days to get the account under arrangement paid, which is absolutely fine. Because ended there people have got things to do, they might not have time to do it ourselves. I’ll sit on the phone. So yeah, again, that that’s something that we’ve seen quite popular, send us a WhatsApp. And then we’ll get back to it back and forth like that. It’s almost like the analogy between like on YouTube between short videos, we see the short videos coming up now versus and this until the flooding, putting my fi versus long videos, right. And I quite like the long videos, but some a lot of people clearly like the short videos. And so there’s a balance there as part of our role is probably just to adapt to what the customers want. Is that kind of what you think. Yeah. And again, I think it’s a lot down to preference. So if the if the options are ready and available, let the customer choose at that cut that stems down into everything, payment options, the different query options, whatever that looks like. If you’ve got multiple journeys available, let the customer choose which one is best for them.

17:25
And the topic du jour, I suppose the hot topic at the moment is large language models chat GTP. And is it links into things like ticks around Australian chat? And I suppose it and relationships do you think you can ever go along the way just recreating some of that, or we think we’ve really got to go back to making sure you’re talking with someone and that human connection is actually important, even versus what might be quite convincing, but not a human connection? Yeah, so for me, I’ve said this quite quite a few times on LinkedIn and stuff that I’m not a massive fan of chat bots, I’ve I’m not completely switched off to him. It’s not a no, never again, it’s just I have not seen one that’s going to service the customers in the way I want them to do what I’m to be service, that it brings too many knots into the customer journey for me. So for us, what works well, is the seamless transfer through to an agent. And I also look at things that don’t get me wrong, that chat TPTs is pretty cool. It’s very smart. But then from

18:28
getting that into from that into a niche subject like debt and debt resolution, it’s a million miles away from that, I think. So if it caught then I’d consider it because it seems pretty, pretty cool. It’s the controls over it, isn’t it as well, which is if you’re not monitoring, every conversation is just making sure that particularly when it’s a sensitive conversation that they’re saying things that are appropriate. Yeah. And

18:55
I always look at this as well, like, how would I react in that scenario? What do I like? What would I like in that scenario? And I know if I want to talk to Santander or NatWest that hit the box. The first thing I’ve got to speak to is a bot. It’s just the presents a few options. It’s no it’s not that and then you get few more, and it’s not and it drives me insane. And for me, that frustrates me. And I’m talking about a savings account awesome. If I were there to talk about debt, which I don’t want to be there in the first place. I’ve gone out of my way to be there. Now I’m talking to a bot that’s not giving me the answers I need and it’s stalling me so that it doesn’t set the conversation off on the right foot. So far anyway, from what I’m seeing. I’m open minded though, I suppose in terms of trying to get help more help out to customers, particularly what we’ve potentially got coming up for us. Are there areas where you think we’ve got to focus we talked a bit about vulnerabilities within their specific areas of vulnerability.

20:00
are areas where, as an industry we can provide more help, or maybe more detail around support that sort of needs to be done. And I’m particularly thinking around how do we get ahead of what might be more people coming through in terms of financial difficulties? I think for from our so our thinking, my end, we’ve got I don’t know, if you saw we got the dear CEO letter. And in there they made reference to present in more options other than debt advice. So the reference the debt respite scheme, for example, that that is becoming a bit more popular. But I think so there’s that that kind of stuff that we can incorporate and present as an option outside of just your bog standard, speak to peer plan, debt advice. And there’s also the priority services register as well, that I think a lot of these things are potentially great tools, but not that many customers know about. And so I think AWS from our side, if we present that information to a customer, again, it’s about presenting the information and choose what’s best for them. So yeah, I think those kinds of integrations into strategies and presenting that information will definitely help broaden customer knowledge on what’s available. Same with the there’s the call benefits, calculators, we integrated invest, for example, stuff like that, just say outside of yes, we’re resolusi aged say we’ve been asked to contact here on behalf of his client. But there is also a lot of tools and information within here that that will help you outside of this one specific debt. Take a look. It does feel like even some of the other regulators outside of the FCA are starting to make some of the very similar noises. They’ve made them already. But it seems like that being the pressure is being increased to do some of the similar things the FCA has done. And this would be for consumer duty goes in, which is another level beyond those Yeah, feels like it’s there’s quite a lot of alignment that’s going on, at least in the UK. Yeah, definitely. And I think that’s all that all stems back to that people are struggling. And it’s noticeable across every walk of life that if your utility bill doubles in the space of a few months, then you’ve got people that were barely getting through anyway. And then the utility bills doubled again. And it’s tough. So I think,

22:15
obviously, I think from that, by displaying that information and making those solutions known, definitely help because a lot of people don’t know a lot of people don’t know about those kinds of stuff. And I suppose as we sit here today, we talked a bit about the changing nature of the volumes that you see, and how do you feel about the next six months or so it’s both in terms of I suppose in terms of volumes, but also in terms of stress on the customer and you optimistic or you think we might be? Are we past the worst of it? Or do you think we still got more to come? I think we’ve still got a little bit more to come. Because obviously, we’re going to have the lag. So the same way, and you’ve got the lag in the price cap there from prices going up and down. I think you were going to have that lag in terms of people falling falling behind. But then so I think as long as the processes are in place to work with these customers, I think I’m pretty optimistic that it will will drag on for too long. But I think yeah, I do think we’ve got a bit more ahead. Yeah, I think the concern is, if we haven’t really seen unemployment change, but we’re chatting about earlier. Yeah. But if unemployment changes, then that creates a very different kind of crisis, isn’t it? Yeah, definitely. Definitely. And I suppose from an industry point of view, what do you think we go next from here? We talked about vulnerability, we talked about digital digital servicing, all of those have been quite big topics. What’s that? What do you think the next kind of area? It is? What do you think it’s just really around? How do we get through the next sort of six, nine months with economic stress? I think the the vulnerability piece and proactively identifying vulnerabilities is going to be the top topic for the next six to nine months at least. Because set we’re going to find out we’re already seeing but that struggling, that necessarily wouldn’t have been. And it’s struggling for reasons beyond their control, which kind of gives that extra layer of sympathy of we’ve got to we’ve got to go out of his way to help these guys. So yeah, I think that’s definitely I know, that’s where our focus is. And we’ve done a lot already, we’ve got a few more things in the pipeline to help with that. But yeah, that’s where our focus is and will be definitely for the immediate short term six to nine months. And it’s just moving to a bit of a different topic around the collections market and I suppose busyness and those kind of things. A lot of people I’ve been chatting to have been very busy at the start of this year. It feels like there’s been something this year, you know, been a lot of investment almost like in preparation for what might be coming down the pipe. But it feels like this year, it’s very different from the last couple of years and even last year, which was the pandemic was tailing off, but it wasn’t as busy at the start of this year. Have you seen Do you feel the colour? Is that similar? Kind of? Yes. Yeah, yeah, I could agree with that observation. I think as well. On the flip side, we’re going to be in a position where

25:00
If the volumes do spike, it’s going to be more work for almost fewer payments, for example, because there’s it’s alright. So as always, we’re friends and family there are, are you working debt collection, you must be Ramdan. It’s yeah, but it’s a different kind of busy. It’s not it’s not a rammed we’ve got payments flooding in through the door, it’s we’re speaking to people that that are genuinely struggling. So they it’s almost

25:27
I think from a

25:29
agency point of view, I think that’ll be the struggle over the, especially this year as a

25:35
payment. Obviously, a lot of agencies work on a commission on the model. So if you’ve got increased volume, increased costs, but your payment, your average payment amount smaller, there’s a bit of a squeeze there. So I think that’s where from an agency point of view, the struggle or come from, and I suppose the digital processes allow you to do that at a lower cost of certain extent or potentially. What about if you’re sitting in a creditor, though? What about using digital to try and call people early enough? You think, and a few conversations around? Whether we’re calling people early enough? Or we’re getting out in terms of to avoid detriments consumer harm as early as possible. Is that sort of using enough of that going on? Do you think there’s more we can do? I’m a little worried about, particularly around contingent liability on the balance sheet. I’d like people haven’t even gone into collections yet, but are already struggling? Yeah. What do you think of that? I think they’re, I think, because again, it’s a tough one, because you’re very reliant on the customer volunteering that information. So I think,

26:29
for me, what I’d be doing in that position is just making sure customers know what support and helps available. And it’s, I think they’re an example of Barclays. Warren it said, hey, just so you know, these tools are available, talk to us help team here, visit this here. And it’s about it’s worded in a way that I’m not saying, Hey, Chris, I know you might be vulnerable here, look at this, it’s a Chris, these are the options available to you, should you ever need them there. And I think by doing something like that, it definitely again, it goes somewhere to open that door, and make the customer a little bit more likely to engage. It feels like it comes down to that engagement or interpersonal reaction piece as well, which is trying to engage people all sorts of people much, much earlier having that relationship, I suppose, yeah, they’ll come to you for help. And you’ve got to think from a point of view, if someone has never fallen behind on a loan repayment before the first time they do, there’s going to be that element of embarrassment, they’re going to be like, Oh, my God, I can’t believe I can’t believe this. I’ve never missed a payment. So

27:36
they’re probably a little bit less likely to volunteer. They’re the kind of person that that might bury their head in the sand and hope it gets better later down the line, they’re probably a little bit less likely to volunteer that information and say, hey, it’s first time this has ever happened to me, but I’m struggling. So making those a symbol email with the different options available, saying, Hey, if you ever need it, these are the options available to you. makes that a little bit easier for a customer to volunteer that information. And you look at things like tone of voice. So it’s almost like that reassuring tone versus those are the options tone. Does that kind of thing help as well? Yeah, definitely. And that that’s something that again, we focused on from day one was around the tone of voice, that the language we use the way we talk to customers in everything. Because I think the average of the I can’t remember off the top of my head, but it’s young, the average reading age of the of a adult in the UK. It’s something like 11. And I think you see some of these debt collection letters, and you read them. And you think, if I was 11, reading this, what does it mean? Yeah, probably nine times out of 10, it means absolutely nothing. And they’re just a little bit friendlier. Make it a little bit clearer. News, dot you don’t have to be so formal. And I think that definitely goes somewhere in helping customers definitely. And it’s all about your brand as well, I think you I don’t want clients or customers to view the digital era as a corporate debt resolution agency, I want it to be a little bit friendlier, welcoming. And that’s what we’ve tried doing with the name, the branding colours, the language we use, if you go on our customer portal, if you read through there and put it side by side to more of a traditional DCA, you can see the difference. And that was that we’re all part of the planning from day one. We wanted to move away from that. There certainly seems to be consumer duty coming up that the stars have aligned to a certain extent in terms of what’s been asked for us and I suppose yeah, we just have to see how the next sort of few months go economically, don’t we? Yeah, hopefully we’ve got to be there to try and give support to people as much as we can. Yeah, definitely.

29:50
Dan, thanks very much. I was marvelling at the start of it. I just tidy your kitchen is versus my office. It’s not always like that telling you, the kids will trash it. So you

30:00
And,

30:01
but I do appreciate you really joining me today and yeah, as always, it’s great to chat to you so yeah. Thanks, Chris. And we’ll I’m sure we’ll catch up soon. Probably bump into at some event. Yeah, they’re all covering up now. See you soon. Okay. Cheers.