How contingent talent can help challenging times ahead for mortgage departments in Australia

All mortgage departments are very aware of the worst spike in interest rates in recent times.  It is estimated that approaching 1 million mortgages are, and are about to be impacted within the Australian market.

Following the ninth meeting in a row, the Reserve Bank again increased interest rates, raising the cash rate goal to its highest level since September 2012. The benchmark rate is now 3.35 percent after the 0.25 percentage point hike, and average variable mortgage rates are already above 6 percent.

The latest hike has increased mortgage costs for a borrower with a $750,000 home loan to $1,362 per month since rates started climbing in May of last year.

In the coming months, individuals who had been considered as marginal risks yet have fallen behind in payments will need to be dealt, and this must be done in an empathetic and personal manner.

Given this, what should collection and mortgage departments focus on in coming weeks and months as tens of thousands of customers face increasingly significant economic strain – and how can the contingent workforce help manage the collection efforts?

Customer and reputational-focused outcomes are going to be crucial for avoiding reputational damage.

Banks face risking significant and generational damage to their brands and reputation if empathetic and skilled collection handlers are not utilised. Ensuring internal teams are equipped with experienced staff will be critical in managing these enterprise risks.

There is no dispute that reputational damage for any business can have serious negative repercussions on the company’s bottom line. This is of course applicable to those within financial services, and in truth, such a situation can be particularly damaging for businesses in this space. It’s reasonable to argue that reputational damage caused by an increase in complaints, or a wider perception of mistreating customers, is more damaging for banks than regulatory fines or wider corporate penalties. The trust and loyalty of customers, especially those who are multi-generational, cannot be corrected nor paid for, and retaining customers’ trust and faith will be key in the months to come.

Collections alone aren’t the only challenge.

A further and prominent risk factor of the collections process is validation of appropriate KYC and AML efforts by the banks at the point when approval decisions were initially made.

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

Why must a focus on collections be your main priority?

Empathetic collection efforts in respect of these approaching mortgage arrears are now an absolute priority for all Australian banks, who will need to embed newfound speed and agility in their operations.

Evaluating responses to the “mortgage cliff” crisis and ensuring that their collection efforts are efficient and effective will be crucial.

Many banks and mortgage writers will unquestionably require additional resources to enable their collection efforts in a fair and timely manner.

Banks will need more resources to assist impacted customers, which is where a contingent workforce can help.

What contingent roles should you be looking to fill?

  • Collections team members: Carrying out pre-defined business processes to ensure that consistent and efficient repayment collections efforts are carried out in a detailed, compassionate, compliant, and effective manner.
  • Quality Assurers: 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 in managing large-scale teams and processes involved in the credit collections and wider lending case-handling sectors.
  • Case Assessors: Managing and reviewing all customer accounts under investigation or review. Assessing cases of interactions with, and information provided to and by bank customers. Collaborating with key stakeholders to work on improvements to the overall risk management framework.
  • Risk Assessors: 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 Analysts: Overseeing all lending strategy definition, review, and enhancement. Scorecard refinement and affordability revision. Analysing live data versus scorecards and modelling for optimal business outcomes from all lending activities.
  • KYC Analysts: Reviewing all documentation for customer accounts, evaluating high-risk cases, and auditing lending decisions.
  • 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- and large-scale teams of people on demand and at speed for specialised business projects, and we have been doing so for financial services clients across the globe, for over 30-years.

We enable our clients with a cost-effective turnkey solution – or specific elements to support and complement your existing capacity and skillsets.

By providing your business with experienced and fully trained compliance, collections and case-handler professionals, our teams will work with you existing resources to ensure positive outcomes for your customers, whilst your brand and business reputational integrity is upheld.

Our teams of resources are experienced, customer-focused professionals who understand how individuals and businesses alike have been impacted by the cost-of-living crisis.

They are appropriately skilled and experienced to ensure compliant repayment procedures and plans are agreed with your clients, and in a manner aligned with your brand values and wider regulatory requirements.

If your business has been impacted by additional  pressures and needs additional staffing support in your collections departments, speak to us to see how we can help in supplying experienced and effective members to your team.