As UK businesses face-up to mammoth post-COVID collections efforts, how prepared are you?
Since the start of the COVID crisis in March 2020, UK Banks have distributed more than £75billion of lending to 1.6 million firms under the guise of several emergency support schemes set up by Chancellor Rishi Sunak.
As the 12-month interest-free period granted to those firms who took out COVID support loans is coming to an end, and unprecedented repayment collections efforts are being launched, how confident are you that your business has the resources required to manage this huge task?
UK Banks and other lending businesses have of course already commenced allocating teams of staff to spearhead the recovery efforts in hopes to start their collection efforts on the front-foot.
Many will be required to use forceful and persistent methods – whilst also being mindful of avoiding a painful repeat of the financial crisis of 2008, when many UK firms faced high-pressure debt collection tactics from lenders.
Striking the right balance and tine will be vital for all lenders in their collection efforts – and that means experienced, empathetic, and skilled resources to carry out these tasks.
The drive for repayment collections, alongside potential fraud or mis-selling investigations will require an army of collections case review, and investigative staff.
Banks and other lenders will simultaneously also need to implement stronger fraud detection models internally and invest in external resource to help conduct investigations of past lending decisions at speed, with efficiency.
Current, largely remote-based, working conditions mean businesses are needing to stand up additional capacity remotely and at speed. But crucially, the sourcing, vetting, and onboarding of even small teams who are capable of being managed remotely has brought new challenges during the pandemic.
Banks and other UK lenders will of course be expected by regulators and ministers alike to empathetically support their clients during this post-COVID period, but governmental pressure to ensure the efficient repayment of state-backed lending will not go away either.
It is a balance that all UK lending businesses must strike carefully, and recruitment of the right personnel in the most impacted business areas is the key to meeting this challenge head-on.
Which business areas are most likely to require additional support?
Recovery of loans – Repayments and collections teams: According to research by Virgin Money, around eight million people have already sought help with their debts during the coronavirus crisis, with UK consumer loans standing at around £220 billion at present. The picture is similar for businesses, with 42% of business owners asking their bank for support. All of which emphasises the need for both effective and yet customer-outcome focussed individuals to lead these repayments collections efforts.
At Momenta, our contingent teams of associates with vast corporate collections department experience are ready to deploy and available to be utilised at short notice in a repayment collections project.
Due Diligence and fraud risk-assessment: With the quick turnaround and processing times for BBL and CBILS lending during much of the pandemic, the risks associated to weaker due diligence, a lack of recorded KYC/AML processes, and the overall quality of data captured could have ramifications for many businesses.
Investigation teams will be needed to ensure AML/KYC and wider customer due diligence processes and systems have been followed as expected in all lending decisions. Banks and other lenders will be expected to be able to evidence to both Government and regulators alike that no fraud or financial crime resulted from the loans processed, and that considered and measured lending decisions were always made to ensure responsible lending was upheld.
We have teams of experienced compliance, case-handler, and investigations professionals available to conduct case-reviews of the due diligence and KYC conducted, as well as lending protocols followed, across a large-scale lending portfolio.
Affordability reviews: Placing affordability testing at the forefront of your organisation’s repayment collections teams, especially when trying to understand the implications of payment holidays and payment postponements, will be key in your overall collection’s efforts.
Customers will understandably be concerned and worried about paying their debts during this unpredictable and challenging time.
Our contingent collection and affordability specialist teams can help in this process by creating a speedy solution, at scale, to help reduce the pressures placed on inbound customer services teams, whilst retaining a focus on fair and balanced business and customer outcomes.
Out teams of affordability review specialists can also place stress-testing at the forefront of your lending review processes, ensuring that applicable business and regulatory lending requirements were followed, as well as ensuring that these are fit for purpose for the future.
Customer and reputational focused outcomes are going to be crucial
Risk awareness to brand and thus reputational damage will also be key during this period, particularly for those businesses who are collecting Government backed COVID related loans.
For many there will be a fine line to tread when avoiding reputational damage and ensuring collections efforts and complaint handling alike are managed empathetically and with great care.
By providing your business with experienced and fully trained compliance, collections and case-handler professionals, our teams of associates will work with you to ensure positive outcomes for your customers which are maximised to ensure regulatory adherence, whilst brand and business reputational integrity is upheld.
What roles should you be looking to fill?
- Collections team members: Carrying out pre-defined business processes to ensure consistent and efficient repayment collections efforts are carried out in a detailed, compassionate, compliant, and effective manner.
- Quality Assurers/Checkers: Performing detailed and thorough end-to-end case reviews, including ongoing QA reviews of compliance functions to ensure controls/standards are met and consistently upheld.
- Operations Managers: Experienced consumer and corporate credit operations professionals with extensive experience of managing large-scale teams and processes involved in the credit collections and wider lending case-handling sectors.
- Case Assessors: Managing and reviewing of all customer accounts under investigation or review. Assessing cases of interactions with and information provided to customers. Collaborating with key stakeholders to work on improvements to the overall risk management framework.
- Risk Assessor: Undertaking in-depth and wide-reaching reviews and assessments of post-lending decisions made to ensure adherence and compliance with internal and regulatory processes and raising issues where necessary.
- Credit Risk Analyst: Overseeing all lending strategy definition, review, and enhancement. Scorecard refinement and affordability revision. Analysing live data versus scorecards and modelling for optimum business outcomes from all lending activities.
- KYC Analysts: Reviewing of all documentation for customer accounts, evaluating high-risk cases and auditing lending decisions versus required policies and procedures.
- AML Analysts: Responsible for opening, amending, reviewing, and exiting clients according to established policies and procedures.
How can momenta help your business?
Momenta specialises in providing small- or large-scale teams of people on demand and at speed for specialised business projects, and we have been doing so for financial services clients in the UK, and across the globe, for over 30-years.
We enable you to provide a cost-effective turnkey solution – or specific elements to -complement your existing capacity and skillsets.
Our associates are experienced, customer-focused professionals who understand how individuals and businesses alike have been impacted by the COVID-19 pandemic.
They are appropriately skilled and experienced to ensure that compliant repayment procedures and plans are agreed with the customer, in a manner that is aligned with both your brand values and wider regulatory requirements.