As the fallout commences from the billions of bounce-back and recovery loans issued during the COVID-19 pandemic, why must UK banks act now, and how must they address these challenges with the right resourcing teams?

The stark truth for UK banks is that they are faced with some of their biggest credit collection challenges they will have ever faced in the weeks and months to come.

The pressure to recoup the billions issued via the loan support schemes introduced during the pandemic in an orderly and effective manner, and thus avoiding the risk of triggering government guarantees, will be immense.

According to a recent study by McKinsey & Company, the global banking sector could lose $4.7 trillion in cumulative revenue by 2024 because of these unpaid loans, which is a truly frightening figure, and one worse than even the 2007 financial crisis.

In the UK alone, more than 1.6 million businesses utilised the government’s three main Covid loan schemes over the course of the past year, which between them amounted to total credit being issued worth a combined £75bn.

Why must a focus on collections be your main priority?

Collection efforts in respect of these vast sums of lending must now become a priority for all UK banks and other credit providers, and they will need to embed newfound speed and agility in their operations.

Evaluating their response to the crisis as lenders and ensuring that their collection efforts are efficient and effective will be crucial.

Many UK businesses in this sector will unquestionably have to turn to additional resource to help drive their collection efforts and ensure that loans issued are going to be paid back in a full and fair manner.

Banks could also face risking reputational damage if empathetic and skilled collection handlers are not utilised, so ensuring internal teams are equipped with experienced staff will be vital.

Collections alone aren’t the only challenge

The other prominent risk factor tied to the loans issued during the pandemic is that there needs to be proof of adequate KYC and AML efforts on behalf of the credit providers at the point where lending decisions were initially made.

As a result, investigative and fact-checking teams will be in high demand to ensure that all necessary steps have been taken to avoid fraud, mis-lending, or any type of financial crime.

How can Momenta help your collections and investigations efforts?

As a dedicated provider of specialised teams of resource for over 30-years, Momenta can support in all aspects of your collection and investigation team efforts.

Our people are experienced, empathetic collections professionals who understand how your customers have been impacted by COVID, while having the appropriate skills required to ensure that correct settlement plans are agreed with the customer, in a manner that is compliant with your brand values.

Momenta supplies teams, large or small, of skilled & experienced staff, on demand, to assist with increased lending collections efforts, for a range of businesses, and our teams:

• Are fully interviewed and assessed, with ‘ready to go’ candidates
• Can work from home or from your stipulated location
• Have flexibility to scale up and down as required on demand
• Are fully background screened and checked
• Can be managed by you or by Momenta
• Plus, Momenta can assist with the design and delivery of training if required

Which areas can Momenta teams support?

Corporate lenders:

• Recovery of loans – basic collections: Teams of associates are ready to deploy with collections experience, who can be utilised in a collection remediation project. 
• Due Diligence: Experienced collections professionals and/or compliance staff that can review KYC and due diligence carried out during the lending review process can be deployed.
• Fraud within loan processing: Momenta have vast experience in deploying and setting up projects on behalf of our financial service clients where fraud detection and remediation is required

Retail lenders:

• Affordability testing and QC: Placing affordability testing at the forefront of your organisation’s collections teams, especially when trying to understand the implications of payment holidays and payment postponements will be key in your collection’s efforts. Momenta has many skilled and experienced collections and repayments negotiators ready to deploy across large-scale and ongoing projects.
• Avoiding reputational damage through your collection efforts: We can increase business collections efficiency by putting teams in place to ensure case handling is done empathetically and efficiently.

If you are looking to increase your collections or lending investigations capacity and processes contact us to see how we can ensure your processes and teams are resilient, efficient, and effective.