New data from global analytics software provider FICO reveals that UK consumers found contact with lenders difficult in the early days of the pandemic. Now, as another country-wide lockdown begins and the number of financially vulnerable customers rises, the FICO research highlights the importance of timely, tailored communications with customers in financial stress.
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The data revealed that customers across product lines faced challenges getting in contact with their lenders, including:
- 33 percent of motor finance customers
- 27 percent of credit card customers
- 23 percent of mortgage customers
“As a new lockdown is due to come into force in England this Thursday, the FCA has confirmed an extension to the payment holiday arrangement; government has also extended the furlough scheme for some sectors,” said Bruce Curry, FICO vice president for collections and recovery consulting and sales in Europe, the Middle East and Africa. “This is a turning point for lenders — they must be able to respond faster across multiple channels, or risk losing a big piece of their customer base. Indeed borrowers across every segment said that they are likely to move accounts in the next six months, or when renewing the secured credit, because of their experience during COVID-19.”
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Motor finance customers appeared to be the most likely to move at 53 percent; main current account and credit card provider both at 30 percent and mortgage at 25 percent.
The survey shows that at the start of the pandemic, borrowers were frustrated by long waiting times and an initial lack of information.
“Our research shows that most customers still picked up the phone when attempting to contact credit providers — and this put a huge strain on providers’ systems,” said Curry. “Incredibly in this age of digital transformation 43 percent of mortgage customers, 49 percent of credit card customers and 55 percent of motor finance customers used the phone as their primary communication channel. It was also interesting to see the demand for ‘confirmation of agreement’ from those customers that need something more tangible than just an SMS. Economic victims need additional assurance on implied commitments from lenders.”
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