Podcast ¦ Credit Shift: The Job of Generative AI, Deepfakes and Cheapfakes, and Mortgage Arrears and Direct Debit Rejections (DDR’s)

Summary

In this podcast episode, Paul Sweeney and Cormac O’Neill discuss recent news and trends in the credit industry. They touch upon topics such as the rate of delinquencies in January, the increase in demand for debt advice, the rising costs of living, and the adoption of AI in the contact center market. They also highlight the concern of deep fakes and cheap fakes in financial services, as well as the need for organizations to address security and compliance implications when using AI.

Key Points

• January is often perceived as a longer month due to the post-holiday financial strain, but the rate of delinquencies in loans and other financial obligations appears to be better than expected.
• There has been an increase in demand for debt advice, with many individuals seeking assistance with issues such as scams, debt relief orders, and bankruptcy.
• A report by Pepper Advantage shows a significant increase in arrears across residential mortgages, indicating potential financial difficulties for homeowners.
• The cost of living has risen for British families, causing financial concerns and a lack of disposable income at the end of the month.
• Many individuals are unaware of who to speak to about their financial situation or believe that their financial institution cannot assist them, highlighting a need for improved awareness and education.
• The adoption of AI and conversational AI in the contact center market is projected to grow rapidly, with an estimated 14% of interactions being handled by conversational AI by 2027.
• Gartner predicts that 80% of customer service and support organizations will use generative AI technology by 2025, resulting in a 20-30% reduction in customer service agents.
• Deep fakes and cheap fakes are emerging concerns in the financial services industry, with scammers potentially able to mimic customers’ voices and manipulate human agents.
• Financial institutions should conduct regular reviews of their security measures and ensure compliance when using AI technology to protect customers and personal identifiable information.
• A study on collaboration between human and digital employees shows that the use of AI chatbots can enhance service process fluency and satisfaction when there are visible collaboration cues.

Key Statistics

• A 29.5% annual jump in arrears across residential mortgages was observed in Q4 2023.
• Pepper Advantage’s Q4 delinquent to repossessions and arrears ratio (DTRA) grew 30.8% year on year.
• US consumers expressed concern about the potential risks associated with deep fakes and cheap fakes, especially when it comes to banking and personal identifiable information.
• Gartner estimates that around 3% of interactions will be handled by conversational AI in 2023, growing to 14% by 2027.

Key Takeaways

• The rate of delinquencies in loans and financial obligations in January may be better than expected, indicating potential financial resilience or improved financial management by individuals.
• The increase in demand for debt advice suggests that people are seeking assistance with their financial difficulties and looking for strategies to manage their debts.
• Rising costs of living are causing financial worries for British families, with an increasing number of households having little to no disposable income at the end of the month.
• Financial institutions should prioritize educating their customers about available resources for financial assistance and create clear channels for communication regarding financial difficulties.
• The adoption of AI and conversational AI in the contact center market presents opportunities to enhance customer service and improve efficiency by automating FAQs and simple queries.
• Deep fakes and cheap fakes pose risks for financial services, highlighting the importance of security measures and compliance in protecting customers and their personal information.
• Collaboration between human employees and digital assistants, such as AI chatbots, can improve service process fluency and customer satisfaction, especially when there are clear indications of collaboration.