Why technology is the critical element when equipping your C&R function to handle the inevitable influx of new calls better
When the ongoing rapid rises in the cost of food, transportation and energy first began early this year, many commentators were quick to warn we’d see an eventual avalanche of individuals struggling with their finances. And six months on, the most recent data suggests that – for an increasing cross-section of UK customers – the squeeze may have finally reached the breaking point.
A new study by consumer organisation Which? has revealed that approximately 2.1 million households reported missing or defaulting on at least one mortgage, rent loan, credit card or bill payment in June. The Office for National Statistics (ONS) also noted that an alarming 88% of UK households experienced a rise in their cost of living during the same month.
It’s no surprise, then, that the consumer confidence is now at its lowest point since early 2020 – a time when the government had just shut down huge swathes of the economy entirely as the pandemic hit British shores. Consumers are becoming more fearful that a recession is around the corner – and with inflation continuing to spiral and fuel costs steadily creeping up, they’d be forgiven for assuming there’s little relief on the horizon.
So, just how concerned should we be about public morale?
The cost-of-living crisis: what do consumers think?
According to Which? research, more than three-quarters (78%) of British consumers are convinced the UK’s economic climate is set to deteriorate further over the coming year, with the number optimistic of a recovery dwindling to just 8%. This amounts to a net confidence rating of -70 for June, a stark decline from the -47 recorded one month prior.
But beyond the big picture, perhaps of even greater concern is the downward trend in the public’s perception of their individual financial security the longer the cost-of-living crisis continues. The latest polling found that confidence in future household finances dipped a full 12 points from May to June alone, dropping from -28 to -40.
In fact, a recent study by Abrdn Financial Fairness Trust and Bristol University estimates that as many as 4.4 million households across the country – around one in every six – could now be facing ‘serious financial difficulties’ as a direct result of the price rises.
The real-world consequences of inflation
In June, a majority of all consumers polled (58%) reported having to adjust their financial decisions due to the increase in prices, including cutting back on essential purchases or breaking into their savings to afford payments. This figure is comparable to the previous two months but represents a significant raise from 40% just one year ago – highlighting how severely the situation has escalated since the new year.
These findings also corroborate with a survey conducted by BBC in May, which indicated that as many as 56% of households are buying fewer groceries and going without basic necessities as the purchasing power of their hard-earned cash weakens on a seemingly weekly basis.
It’s important to note that the cost-of-living difficulties don’t discriminate. Whilst it’s unfortunately true that those on lower incomes are naturally baring more of the brunt – with around two-thirds of those on incomes of £21,000 or lower saying they’ve had to make at least one financial adjustment -consumers across all ages, income levels and regional areas are being impacted.
For example, the majority (57%) of households earning more than £55,000 admitted to making at least one financial adjustment for June. Indeed, if the Abrdn/Bristol research is any indication, the only group currently facing fewer financial difficulties since October 2021 are households with annual incomes greater than £100,000.
Now more than ever, customers need help they can trust
With the stakes now so high for so many, firms simply can’t afford to drop the ball with how they deal with vulnerable consumers. As more and more people turn to financial professionals for help, it goes without saying that the spike in consumers looking for assistance will be most readily felt by the staff with the closest interactions with the public.
As more and more people turn to financial professionals for help, it goes without saying that the spike in consumers looking for assistance will be most readily felt by the staff with the closest interactions with the public.
From your customer service operators to your collections and recovery teams, your entire firm should not only be prepared for a spike in calls and enquiries but also re-familiarise themselves with their regulatory obligations towards ‘at-risk’ individuals.
As always, you should strive to treat consumers with the utmost dignity, compassion and respect as you help them navigate the difficult next steps ahead – whilst providing them with as much information (and as many options) as possible so they can choose the path most suitable for them.
Additionally, you’ll need to ensure you’ve got a robust quality review and assurance processes in place to help root out inefficiencies and pinpoint the root cause of any subpar outcomes at the earliest possible convenience.
Innovative RegTech solutions such as Recordsure’s CoversationReviewAI speech analytics that review, score and offer actionable insights for all customer interactions can play a key role in this regard. The superior RegTech allows you to review and continually optimise your processes by automatically flagging areas of regulatory concern as they arise. Hand in hand with TCC tech-powered case reviews for document reviews and audit trails, these technologies offer unique tools for compliance reviews, risk management and conduct monitoring while achieving greater efficiencies and productivity.
Furthermore, with a comprehensive archive of client interaction recordings and documentation, you’ll benefit from deep MI into both where improvements can be made, and where your resource can be most effectively deployed to assist your consumers when it truly counts.