Data in the Debt Sector
The pandemic accelerated digital change in many sectors including debt and finance. GovDebt 2022 will look at how technology and data especially is helping transform debt resolution and helps secure a fair outcome for all.
In this blog, we asked our speakers "How will the increased use of data affect the debt sector?"
Steven Coppard, Group Director of Debt Policy and Strategy, Arum | Just
"It can only improve things. People generally expect their data to be used in ways that makes their lives easier but the critical thing for me is to break down the silos that exist. That starts with the Credit Reference Agencies – I do find it ludicrous that some accounts are reported to one but not the others, but it should go deeper – the invisibility of BNPL should be a wake up call that no form of credit should go unreported – not just to protect lenders from failed accounts, but also to ensure that consumers are getting the cheapest prices when their accounts are managed well. I’d also be keen for the scope of CRAs to be expanded to take account of public sector accounts and debts. The same principle applies – those people who pay their taxes, social rents etc… on time could be missing out on more affordable credit, and conversely, if somebody is missing rent and council tax payments, for example, should they really be extended new lines of interest-bearing credit?
Having true data reciprocity starts to get towards my earlier point insofar as it levels the data playing field."
Russell Hamblin-Boone, Chief Executive Officer, CIVEA
"The technology used by the commercial credit sector is applied routinely in public debt collection with increasingly sophisticated welfare support. Open banking and data sharing, coupled with the Digital Economy Act, present new opportunities for government agencies. Better data leads to more accurate assessment to discern those who can’t pay and those who won’t, which in turn allows targeted and appropriate support for many and responsible enforcement against the few.."
Matthew Hooper, Senior Category Lead, CCS
"We need to remember that we have so much data available to us, and understanding what's out there, and how it can benefit us is sometimes the greatest challenge. We need to look close to home first, ensuring we're really maximising the use of our own data and MI before we get too excited about importing other data sets.
Many organisations already use data to segment consumers, I hope that this will become more dynamic, with creditors being able to identify warning signs from trending data (for example, a consumer who has not previously maximized their credit limits starting to do this, possibly suggesting greater financial stress). This can be used in collaboration with flexible strategies to actively redirect consumers down different treatment paths as their circumstances change. Hopefully we will also see new data sets further opened up as solutions such as Open Banking become more accepted, this would enable genuinely sustainable payment plans with dynamic I & Es being automatically reviewed as your payment is due each month and payments taken accordingly, currently however, this is some way off."
"At our Members' Meetings, speakers often present very hard-hitting data which prompts discussion and understanding around what is happening to household and business finances and in the wider economy. It is vital that policy and decisions are made based on this data and it is becoming increasingly important for our members from all across the debt landscape to utilise this information to inform their work as part of a joined-up approach to tackling the major issues we're currently seeing. Collaboration and data sharing are key to gain the most full and accurate picture and this is something we look to promote and enable."
Join us on 11th October at etc.venues St. Paul's, to hear from industry leaders and finance and debt professionals from across the UK. Purchase your pass today to get special pricing.