New tools for new times: I&E transformation – [FULL INTERVIEW]

The full interview with Mark McElvanney from IEHub. Mark discussed what he has seen in the market, how the approach to capturing Income and Expenditure data is becoming increasingly digital and the advantages this has.

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Interview Transcript

So hi everyone. Today I’m here with Mark McElvanny, who’s the director of sales at ie hub. A mark. Nice, nice. Nice to see. So thanks very much for joining us today. So we just want to have a bit of a chat, I suppose interest in just finding out a little about your experience over the last last six months or so it’s been a crazy kind of time, a lot of change. But good to hear, hear what you’ve been seeing really?

Yeah, I think with with I hope, because we have different touch points, we have client contact and direct customer contact, we very much reflect what’s gone on kind of in the wider world of the world of collections, I suppose, in terms of COVID seen some changes, both in terms of customer contacts, and the types of contact that have come through the the pandemic, because it’s driven the industry to accelerate its digital contracts, we’ve kind of been part and parcel of that for lots of different firms across different sectors now, or signing up and joining the community.

And then finding different sectors, different sectors. So whenever they weren’t before, is the sector mix changing.

And I think for us, it’s kind of hard to see in terms of the mix, we are still relatively new as a company. And we very broadly across lots of different sectors. So during the pandemic, we’ve started to work with a bank, a local authority, a collection agency utility provider. So in terms of sectors, we’re not seeing any specific focus, but indeed, the the reaches is very broad. And I think it is probably just again, a reflection of the pandemic and that it is hitting everybody across society. And in every area, whether it’s financial services, utilities, local authorities, housing associations, they’re all feeling it in very much the same way because of the impact that it’s having on their customers and all of us as a community.

I suppose the pandemics kind of hit in several ways as it was from, from your perspective, one of which is, you know, just that, you know, the ability to be able to serve as customers and that sort of like move toward digital. But the other thing is, then that whole piece around affordability right as well, which is, you know, that you have to try and make an assessment, you have to try and understand what’s affordable versus what’s not. And, you know, that’s that’s another way that that that that that was constructed, people are more stressed, I would think.

Yeah, definitely. I think that that’s probably been one of the big changes for us and pandemic is maybe the reason why organisations joined up with IE hope, pre pandemic, we were probably very much a typical collections tool, used to assess customer affordability and the drop out of that would then be forbearance and financial vulnerability. What collections was that that specific driver. With the pandemic, obviously, the focus has changed. And lots of organisations are looking at forbearance. First and foremost, there’s obviously been various guidance from the different regulator as an encouraging, setting that in different ways. But what that meant is the use of IE hope has become kind of that, that sort of sharp edge for the affordability assessment. And particularly within financial services where the FCA prescribed payment deferrals or payment holidays have come to an end, ie hopes being used to look at a customer’s financial position. So move them from that blanket approach into the tailored approach and IE or affordability assessment, then being shared with the credit or they can see specifically what does that customer need? Do they need a continued payment holiday? Or do they need some alternative? Forbearance? Is there a middle ground because ultimately the the longer the payment deferral goes on for and effectively the bigger and steeper the hill it is for the customer the claimant and if the the order to recover the account. But certainly that’s that’s been a specific change within financial services. And similarly with the the water companies as well, they’ve obviously all had social terrorist for a long time, but I hope it’s been used in that position more with with those organisations as well in just identifying where affordability meets the particular water company social tariff criteria.

So I suppose income and expenditure has been an issue for a long time, certainly in financial services or just more generally. And I mean, it’s huge because it just takes so much time. You know, and I think I mean, have you seen Have you seen sort of like change changes in terms of the adoption of blockchain and across the I suppose, different different different industries. I mean, mean how how’s the solution mean, kind of kind of welcomed, really.

Um, it’s, it’s coming in different stages. For different organisations, I think when we look at financial services and probably my background kind of going back many years, the introduction of income and expenditure was really pushed by the FCA as part of regulations. So there are some quite mature processes within financial services. And for some of those bigger organisations, it’s well established where we fit in, started to fit in, particularly with some of the more challenger banks coming through where their affordability assessment maybe isn’t as mature or their understanding of the collections process. So we’ve had some success there. And then other industries where their regulator maybe hasn’t been as prescriptive in terms of affordability, so particularly within water, housing, and local authority, and they’ve all had an affordability assessment of some kind. Maybe that’s been something they’ve developed themselves, or they’ve crib bits from from other industries. But because there isn’t a consistent or mature approach, ie hopes been able to come in, and particularly sort of the last year or so with the introduction of the standard financial statement, and that gone across multiple industries, again, that’s helped us in our approach, and having that consistent income and expenditure assessment that not only works with the mature processes within financial services, but across all of the other industries that I’ve mentioned. And ultimately, from a customer point of view, there’s a there’s a benefit that they can engage as widely as they need to.

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What about what about open banking? So a lot of discussion around open banking? And so where do you kind of feel that that kind of fits in? or what have you? Have you seen a change in that? You know, particularly in terms of it, there’s been quite a lot of discussion around I think, during the lockdown and during the pandemic, but what kind of things have you heard?

I think from an open banking perspective, there’s the sort of two things that are that have influenced us. Obviously, broadly, and UK consumers are becoming more digitally aware, and we are seeing widely an increase in the use of open banking, and sort of some of the last numbers that’s hitting around the 2 million mark, there’s obviously still a long way to go. Because before open banking is commonplace. But we’ve seen that reflected in our open banking use within ie hopes or customer can log in and effectively populate Orion a user Northern Bank. And so we’ve seen a steady increase. The other factor, which influences kind of all it uses is the different partners that we work with. So if a partner is particularly open banking forms themselves, or just has a more technology aware, customer base, then we find that that creates a boost in our bank in you. So over the course of probably the last 10 months, we’ve gone from sort of a few percent of our customer base using Borbon bank in the pocket or irony to on 23%. We are currently and so they’ll that customer login, and I’ll have an IUD within five minutes ready to deliver and to their creditors,

and how much how much does the the open banking take off the time to fill out the irony. So So remember, over the phone rang, and it would typically take between 20 and 40 minutes, depending on depending on the product and the depth and those kind of things. That’s why there’s a big push to online. So you know, how much does open banking save in terms of, you know, completing an IE for the customer.

from a customer’s perspective, it’s probably going to save them 1520 minutes, depending on kind of their level of awareness and ability at the offset. But for now, I’m an advocate of open banking and use it myself within an IE Hobin that makes the completion of the budget, it’s just so much quicker. And the data comes in. And as a user, I can just screen my transactions, make sure I’m happy with how he hopes categorise them against the SFS. And ultimately, that’s the budget populated and it’s ready to go on it it is few minutes to log into the online bank and pull the database in seconds and it’s ready to go.

Well, there’s always quite quite a lot of resistance, I suppose from ayeni in collections in terms of like, you know, people other people really want to do that. I mean, you get 23 percents pretty, pretty, pretty, pretty impressive. And you say is that different by is that different by industry? Or is that different by maybe by type of customer so customers are in like maybe more in arrears versus those that those are the lesson arrays and you see any kind of splits within that or

so we don’t see the customers details specifically than the within ie hobbits. It’s very much customer own data. And what we can see is different in open bank and access depending on specific organisation. So we said one of our partners that we work with within finance services, they’re a digital bank, their customers are therefore far more digitally savvy. The day open banking usage is far above our average. We then look at maybe another organisation, consider local authority and council tax collection, their customer base is going to be more broad. They’re not particularly picking their customers, those that end off in the collections, and some of them are using open banking, but they all follow the law. And the average that we’ve seen within the Naito

it’s quite interesting. I mean, we’ve all had to become much more digitally savvy over the last six months, right. And almost like that itself will drive up open banking usage, as well as like online ironing usage, all sorts of things, I would think. Yeah, I

mean, it’s not an I suppose it’s not sort of a customer exclusive piece where we see customer queries coming through and our customers managed, not other the contact themselves, we’ve got all the FAQ is there, but we do get customers looking for support and the demographic of those customers just when we’re having the individual conversations, Neil, very broad sui Conte sort of you’re over a certain age, then you don’t use all banking, questions about how to access this, what’s the right way to share it from sort of all walks of life in all age groups?

And that’s really a myth. I mean, it seems like who’s more digital savvy and who, which demographics, more digital savvy, is almost like that. I think there’s some myths that are almost like being broken during the whole of the whole of lockdown. It’s, you know, some of the preconceptions we had before really just proven to not be true, really? Mean largely, so it feels like at least anyway, like everyone’s now doing it?

Yeah, definitely. I think the the pandemic, it’s made people question their own preferences. So I think people have had maybe had habits rather than a preference. And it might have been well, I go into my branch, and I like to bank face to face and pandemic’s stopped up and forced people to go down another channel, but actually wants to got there. And they’ve broken away from that habit, they’ve actually been able to see two sides of the customer journey and actually formed, I suppose, a true preference, rather than just this is what I’ve always done.

I like I like that, that we always talk about, like customer preferences, but actually they are customer habits. Yeah. Yeah, I really like that. It’s good.

Yeah, I think a lot of that is just around how people are influenced. So if you think about collections, we might also collections journeys, the preference is telephone contact, what actually, it’s probably been the exclusive contact channel for such a long time. And now that there’s multiple channels, we’re not just talking around about telephone, or digital digital splits off into different aspects. There’s web chat, as you can use email, there’s two different web portals and actually, given now giving people a true choice, will get a better reflection of what preferences and I suppose as organisations, we need to be as broad in those offerings as we possibly can and let the customer make the choice selves.

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What about data sharing, so that was always a bit of a resistance around sharing data across multiple organisations something over the over the longest time, and that’s sort of like stalled efforts around, you know, irony, sort of historically, at least anyway, it sounds like that’s improving quite a bit, and certainly into into new sectors. But how do you feel that that that kind of journey is coming on? Because it makes a lot of

sense? Yeah, I mean, it’s certainly getting better. And we, the more organisations, we work with kind of the less of the the compliance data protection type barriers that we’re coming up against, obviously GDPR is a factor within that and through Oggie, hope, the customer orams and manages and controls their debt or and they’re given consent, and every time they share their information out. So that’s, that’s kind of one of the one of the big keys and that they can they can have it and hold it. And it’s it’s kind of theirs to do as they wish. In terms of the data coming back the other way, I think we were we’re really pleased to see the FCA and corrigin data sharing for firms that have the capability. And if not any organisation is part of it hope as well as having a customer portal, we have a credit portal, so the information can go back the other way. So for credit or invest in completing an IEP, they can share it back with their customer and the customers then got something which they can share with the next creditor. And really, that’s one of the big drivers in terms of what I hope wants to do is make life easier for that customer, give them their ID and let them engage with each of their creditors. So And typically, UK consumers got six unsecured debts, and each of those credit as well have an IEP process of some form. And it’s the I suppose the repetition of that IEP engagement, that we want to try and break down and got everyone our unit They just deliver it to each of those credit as yes, they still have to have a level of engagement. But that engagement isn’t at the level of the kind of the mundane or the intrusive, how much do you spend on x, it’s all been presented as a single, all you need goes out. And the credit app can have a much more concise informed conversation with the customer, ultimately spend their call time on getting to that customer outcome. Not having to interrogate irony data,

or that the bright lights in front of them sort of like you cannot have more of a helpful conversation.

Yeah, it’s definitely helpful. You kind of get I was thinking about it’s the the mastermind chair when you’ve got the customer on the phone. Okay, that question, what do you earn? Okay, what do you spend, when you go to the supermarket, you take all that away, and putting it into a customer led digital journey, I can fill an IUD in at my own time, if I do that manually, or there are US Open banking, but it’s in my gift, I can put the kids to bed, do whatever I need to do for it was a bit of time and the money, send it to the creditor, and then when I’m having a conversation with all those different lenders, it’s kind of that legwork is done, and it’s very chicken, see what I can afford. And this is the arrangement that we’re going to agree on the forbearance which I might need on that particular account time.

So we talked a bit about as a date data sharing, and I suppose irony and forbearance. How how do you how do you guys kind of fit in with the new breathing space rate regulations that are coming out? Like sort of like the start of next year? I mean, what’s what’s going to be the interaction between that as far as and the free debt advice sector, etc? I mean, I mean, how do you see all that kind of working? Because that’s potentially a fairly fairly big change that could kind of happened in terms of dynamics?

Yeah, definitely. I mean, we’re, we’re sort of still waiting to see some of the detail from the insolvency service for IE Holborn, want to play an active part in that right away all my background is within debt advice. So kind of understanding some of the customer challenges as well as the the debt advisor challenges. And what we’ve been really keen to do is use IE hope not just to link customers to credit as calling customers to debt advisors and debt advisors to customers, give you sort of our kits to any free debt advice provider, and completely for free. And what we can then enable the customer do, or the client has the will because share their ID information with a debt advisor. So we can meet the debt advisors job easier, the debt advisor can compare and do their particular role. And they can share their agony back with the customers, the customers got back bored of that advice conversation, the debt advisor can manage the debt solution for them. But what we’re then going to have or development roadmap for probably end of this year and early into next year, is look to see how do we track that journey. So I want to do is then be able to acknowledge within an irony that a debt advisors completed the irony with the customer, the customer has got a debt advisor approved it. And they can then share that with a creditor and within the journey will show the credit about the irony was completed by a debt advisor. So the creditors then got something which they can use to apply some breathing space. But that’s just a single view or something that can mock into the insolvency service piece we have yet to define book, the opportunities there. And certainly just given the debt advice, provide the recognition have done the work. And carrying that through to the credit app gives the credit some confidence as well. I

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quite like the idea of almost like transparency across the process. So you have sort of like the customers entering the DNA data, and everyone can see different spots in terms of like where, where everyone can see different spots where where the where the information, what information is being put in where they currently sit within the journey, those kinds of things. And that sort of transparency from a customer point of view, as much as from each of the businesses or the you know, the creditors point of view is seems quite interesting. It’s interesting concept.

Yeah, I mean, it’s kind of one of the things that I want to try and get across within ie hope is that there aren’t winners and losers or they don’t have to be winners or losers if we have that transparency. Ultimately, the best thing for the customer is the best thing for the credit and credit as can get paid or apply the forbearance where they need it and ultimately retain a customer and have account which eventually recovers. situations aren’t fantastic for everybody. There’ll be some some short term support which needs which is needed all those might be more opt in, but ultimately having that transparency everybody knows exactly where they are. Yeah,

that’s trying to get a win win out of what is a difficult situation for everyone. Really? Yeah, really. Okay, I mean, so So what what do you think the future holds? So it says we’ve just gone back into into another lockdown in England at least anyway. You know, it seems like you know, cases arising in in Europe. I mean, what what you What do you think is going to be the next six months.

And if only I had the crystal ball, I think, for me that the worry with where we are is potentially where we just continue to kick the can down the road. I think the the offer of forbearance there for customers is absolutely fantastic. And the industry’s doing a great job in kind of meeting those challenges and being in the right place for the customer. I think the longer we go on with a with a blanket, the one size fits all forbearance, usually the bigger problem we’re storing up for tomorrow. And certainly a more tailored approach means that there’s the halfway house could be found for some of those customers, if they are able to repay some of their debt for the next three or six months, actually, at the end of that period, the the hill up they’re going to claim isn’t going to be so big. So that is kind of one of my worries. If we extend if lockdown gets extended, or the extended forbearance, I think that the problem is getting bigger, the longer we go on. And then there needs to be some bite point and over for some customers and for businesses as well. That isn’t going to be an easy situation. But I think if we can realise some of those sooner rather than later, then the problem might not be overcome.

Yeah, I mean, it certainly feels from the conversations I’ve been having is, is every single every single lockdown, sort of concentrated that the population so people went on payment holidays, and some people rolled over, some people didn’t. And every single time we go, that population gets smaller, but for those people who need it, the problem gets kicked down the road further, and then it can become worse. Right? And I suppose it’s the question is, I mean, even using like we’re chatting about with you guys, is how’d you get that information and help those people today? Rather than well waiting for it to become sort of, you know, yeah, another six months down the road, right? Because, you know, some people are okay, but some people are going to be I really sort of struggling.

Yeah, that’s the thing. There’s, there’s there’s lots, there’s lots going on out there. There’s lots of forbearance, lots different options, there’s lots of goodwill, I think the the piece that we need to then try and overcome whether it’s at the front end of a payment failed or at the end is how do we get those customers to engage and be self diagnose? To a certain extent and look to see, well, actually the forbearance that we’re putting in, is it the right forbearance? Or is there a point where we need to have almost a moment of truth, whether it’s from a mortgage lenders perspective, seal, and really, the long term prospect isn’t good. And actually, it’s better to have a effectively a controlled or managed exit, and where the outcomes are then more favourable, again, for everybody.

That’s trying to get that trying to get that win win, the best you possibly can. The best outcomes for everyone I suppose is, is really if you can get to it, right. So

yeah, it’s a hard concept, I suppose to to consider if you’re a customer, and if you if he does come to a repossession or something of that nature, it’s really hard to look at that as a win, win. If you compare it to what the alternatives might be, and you could be in a property struggling for the next 12 months worrying about your mortgage? Or do you kind of exit now get something which is more affordable, and you’ve saved yourself all of that stress and anxiety for the next year? And it’s a difficult concept. But actually, for some people that might be the, the right way to go about it.

I suppose that’s where the the densify sector really kind of helps people sort of talk through some of those issues and sort of coaching people through right. Well, Mark, thank you very much for your for your time, I really appreciate it’s great to get a bit of insight into into your world, the world of irony, you know, and everything and everything’s going on. So I think digital has been such a hot topic. And it’s great to find out a little bit more about you know, how you can gradually basically see it starting marching across the industry right and really being adopted so, so really appreciate it. appreciate your insight very much so, so thank you very much. Oh, no, thank you, Chris.

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