There’s a perfect storm brewing in the UK, a potent mix of soaring inflation, stagnant wages and growing energy, food and transportation costs – all leading to a cost-of-living crisis that will unleash hardship on millions of households across the country. And the time to act is now.
In his recent Spring Statement, Chancellor of the Exchequer Rishi Sunak announced government measures to support UK families and SMEs with the steep spikes in National Insurance, fuel, energy and housing costs.
The statement paints a bleak picture: ‘Higher than expected global energy and goods prices have already led to an unavoidable increase in the cost of living in the UK…with the long-term consequences not yet clear.’
This means that ordinary people across the earnings spectrum in the UK – working professionals, entrepreneurs, parents, new homeowners, students, young families and pensioners – are anxious about how they’ll make ends meet this year. As a result, they may find themselves resorting to reduced savings, borrowing, payday loans, or simply not knowing how they’ll cope.
An inevitable consequence of the added financial pressures falling on the shoulders of ordinary and even vulnerable people is the downstream demand on your compliance, collections and recoveries teams when it comes to supporting your customers.
Read on to find out how your organisation can tackle this momentum and prepare your teams with tools and smart tech to reassure and serve your customers in the face of the cost-of-living crisis.
Another challenging year ahead
Off the back of the repercussions of the global pandemic, it’s clear that the UK public is in for even more financial pressure and uncertainty: ‘Higher global energy, metals and food prices…pose risks to the outlook for inflation, consumer spending and production. [This] will inevitably have an adverse effect on the UK economy and the cost of living in the short term,’ states the Spring Statement 2022.
And your customers are already feeling the pressure. 95% of UK adults are worried about the increasing cost of living this year, with cost rises in energy, food and phone and internet bills causing the most anxiety, according to a new survey by Royal London.
But despite the government’s support pledges, these policies alone, such as the 5p temporary reduction in fuel tax and the permanent increase in NICs primary threshold, won’t alleviate the financial burden on your customers – particularly the most vulnerable groups.
Barret Kupelian, senior economist at PwC, said: ‘This is not enough given the large terms of trade shock the UK and other economies are facing. Households are under unprecedented pressure. The OBR’s forecasts confirmed that household real disposable income per person is expected to contract at its fastest pace for at least the last 65 years, shrinking by more than 2%.’
And the data tells the same story. Kupelian said: ‘We expect energy prices to continue to drive the inflation story in the coming few months. The latest data shows the energy price cap could be due for an additional one-third increase in October this year after the approximately 50% increase pencilled in for next month.’
What does this mean for your collections and recovery teams?
A staggering 90% of adults plan to make spending changes due to the cost of living crisis. As the financial situation becomes direr for your customers, particularly those most vulnerable, they will struggle to make ends meet and will find themselves in a difficult position to choose between petrol for the car or food on the table. Given the challenges your customers are facing over the next year, how will this impact your organisation, particularly your customer-facing teams?
First of all, you should expect to see a sharp increase in the percentage of customers in financial distress and, consequently, an influx of call volumes and an even higher workload demand on your collections and recoveries teams.
As your support teams are inundated with more customer inquiries, it’s inevitable that maintaining good quality service and compliance will become a risk to the business.
Research has stated: ‘Survey respondents expressed significant concerns about an increased risk of compliance failures as a result of the pandemic. The assessment that the pandemic somewhat increased the risk of failures was shared by 67% of respondents, and another 10% felt it greatly increased.’
How can you prepare?
The good news is that there are a couple of actions you can take to prepare for the imminent cost-of-living crisis and to equip your teams to better serve your struggling customers.
- Choose efficiency over effort
Despite the digital disruption across industries over the past decade, collections and recoveries teams haven’t seen the same level of investment that other areas of your business might have. The ability of machine learning and artificial intelligence to streamline your team’s manual, time-consuming quality checks tasks means that you’ll quickly begin to notice cost savings and higher standards immediately.
Recordsure’s intelligent speech analytics tools can help your compliance team move away from a random sampling methodology – where maybe 3 in every 100 calls reviewed have issues to deal with – to a targeted, risk-based approach that will make them more than 20 times as effective and reviews being more meaningful, with >60 in every 100 calls reviewed identified as calls with potential issues. When it comes to call reviews, the speech analytics tool enables your team to review customer calls in half the time, revolutionising your call review outcomes.
2. Arm your teams with tech-driven training
Lean on smart tech to quickly upskill your staff. Think beyond project management and task coordination tools and use innovative technology to help your teams serve your customers better – with the added benefit of developing their own skills in the process.
Differentiate your business from the rest of the industry by introducing a tool like Recordsure AI Voice, which can transcribe and segment all your customer conversations and risk score them. This smart tech will allow you to zero in on common competency issues through better feedback loops, identify training requirements and respond quickly – enabling your team to provide the best possible customer outcomes, every single time.